Business Law
- Summarize distinguishing roles between an employee, an independent contractor and an agent
To identify an employee, an independent contractor, and an agent, it is important to understand their meanings and roles. An employee is a person who is in the service of an organization or employer under any agreement of hire, articulate or indirect, oral or written (Holmstrom & Milgrom, 1991). In an organization, the human resources perform diverse activities on the behalf of others or themselves. The employees are rewarded through salaries or commissions. The rewards are act as the scorecard for defining the level of commitment that has been significant towards the achievement of the set goals and objectives of the business. Employees have the duty to uphold the diligence and ethics required within the workplace to safeguard their jobs and then expect to benefit based on the work that has been done and level of performance.
The independent directors are in the exercise of an autonomous employment or contracts to do a piece of work according to his methods and are subject to his employer’s control only as to the end product or final result of his work. The independent directors are entitled to the right of controlling and giving directions to the individuals who carry out the services according to the details by which that result could be accomplished.
An agent on the other hand is defined as the party who has been assigned the articulate responsibility by the principal to act on his behalf when making permissible transactions in a business. In dealing with contracts that relate to the provision of supplies and services, it is significant that the agent is held liable in indemnifying any burden that is suffered by the person and compensates them accordingly. Some of the responsibilities assigned to the agent by the principal are under the legal concept of evident authority (Holmstrom & Milgrom, 1991).
- What factors will a court take into consideration when determining compensation in a wrongful dismissal action? Indicate the various types of remedies that may be available to the plaintiff
One of the obligations of the courts is to consider the indemnities that originate from unlawful removal from work place such as salaries, wages and the contract duration. The wrongful dismissal suits brought before the courts should be derived from the major trends that originated from the originally signed agreements. When calculating the damages suffered by employees as a result of unlawful removal from office, it could be calculated based on the fixed term contracts. The benefits and wages are the basis for counting the damages that are brought upon the employees because of wrongful dismissal. For fixed-term contracts, courts could even grant unemployment benefits to the beneficiaries (August, Mayer & Bixby, 2009).
In case an employee is removed from office, it is important that the courts understand that the dismissal follow the programmed opinion of an agreement written in existence of an onlooker or a lawyer representing the company. The employers should always adhere to the legal procedures governing the employment and be ready to follow the disadvantage that comes as a result of failing to follow the stipulated laws (Holmstrom & Milgrom, 1991).
- Distinguish amid an agent’s actual, implied, and apparent authority. Explain why this distinction can be important from the agent’s point of view.
An apparent authority is defined as that power in which an agent appears to own but which the principal has not yet granted. It may be that an agency relationship already exists between principal and agent based on a restricted grant of actual authority, and the question is whether the agent has authority to act beyond those express limits (August, Mayer & Bixby, 2009). It is a legal requirement that all the third parties be served with an actual and constructive notice with which the agent had prior dealings before concluding an agent’s apparent authority.
Implied authority refers to where an agent has been assigned the responsibility to perform anything necessary towards the achievement of his articulate power. For the principal to avoid improbability, it is sensible for him to go into extensive detail when spelling out the scope of his agent’s authority (Schaffer, Agusti, Dhooge & Earle, 2011). In actual authority, it is the authority bestowed on an agent by the principal. The actual authority can be classified as either express or implied. In an express authority, the agent has the power to transact on behalf of the principal, and it is given by words spoken or written. Wherever the unrelated lawful requirements do not exist, a legitimate endowment of definite authority may be made by oral accord.
To ensure that the agent know the duties that they are expected to play within various authorities, the segregation plays an important role. The disparity is essential in ensuring that the individual agents participate in their duties without overlying in the authorization that they are expected to perform. The agent’s authority thus guides and determines the relationship between the parties who are involved within different agreement (Schaffer, Agusti, Dhooge & Earle, 2011).
- Set out the nature of the duties owed by a director of a corporation. To whom are these duties owed? Who else in the corporate organization owes similar duties?
It is a legal requirement that the directors be charged with the fundamental obligation of supervising the management of the business entity and the corporation’s affairs. Due to the increasing growth rate of different corporations, directors are required to monitor closely the activities carried out by the management as opposed to performing the managerial duties. Furthermore, the have to be stewards of the company and need to manage the affairs of the corporation except for certain specific powers that will boost relations within the company (August, Mayer & Bixby, 2009).
The directors have a fiduciary duty of ensuring that the organization runs smoothly to guarantee the realization of the company’s set goals and objectives. This will ensure that the directors perform their responsibilities in the corporation’s best interest and not their personal interests. The duty of care owed to the company by the directors requires them to act carefully and on an informed basis and to demonstrate the thoroughness and skill that a rational, discreet person would exercise in comparable circumstances (August, Mayer & Bixby, 2009).
- Distinguish among a derivative action, dissent, and oppression.
A derivative action is a claim brought by a shareholder of a company in the name of the company where the directors are not willing to pursue itself for the benefit of the company. For a derivative action to be taken there must be some wrong committed to the firm. The dissent refers publicly disagreeing with an official decision based on the prevailing facts. Dissent means where the company’s providers of share capital publicly disagree with some decisions made by directors where they feel that their opinions would be essential in bringing an overall change to the company (Holmstrom & Milgrom, 1991). On the other hand, oppression means suppression of different ideas of the company’s board members when making certain decisions. It is aimed at ensuring that the company conducts its operations smoothly.
- What is meant by a restrictive covenant? Under what circumstances will such a covenant be binding on subsequent landowners? How does this relate to a building scheme?
A restrictive covenant is a type of agreement that that requires the buyer of a product or property to either take or abstain from a specific action. Restrictive covenants are requisite lawful requirements written into the deed of a property by the seller of a real estate. Restrictive law acts to ensure that there is a regulated use of a given parcel of land and management on how it is used in different contexts and areas within a particular jurisdiction (Holmstrom & Milgrom, 1991). Succeeding proprietors are indebted to guarantee that they performed following the required restraining covenants. This is especially vital in cases where such covenants are complex and the agreement period is long. Where the lawful subject in question runs for a very long time, it is expected that the landowners have the knowledge about what is expected of them in different contexts (Schaffer, Agusti, Dhooge, & Earle, 2011).
- Contrast a tenancy in common with a joint tenancy, and indicate how one can be changed to another. Why is the distinction important?
Tenancy in common refers to a shared tenancy in which each holder has a distinct or separately transferable interest. A tenant in common has the right to deed their interest without seeking the consent of the other co-tenants. Guided by the stipulations of tenants’ will or that of their lawful beneficiaries, the tenants their interests transferred to other parties. On the other hand, joint tenancy is where two or more individuals are joined and obtain equal rights over the property (Holmstrom & Milgrom, 1991). In joint tenancy, the interest of a joint tenant is passed by operation of law to the other surviving joint tenants.
To change one tenancy to another, it is important to secure the agreement of each tenant and feel out the updated deed. The parties have to prepare all the necessary supporting documents and send to the land registry’s citizen center. The distinction allows for easier understanding on how the ownership of the property is made enhancing regulated practice on how benefits that accrue from the property are to be divided (Schaffer, Agusti, Dhooge & Earle, 2011).
- List the concerns for employers arising from computer misuse by employees in the workplace. What steps can employers take to minimize the risk of vicarious liability?
The introduction of computers has significantly eased increased efficiency and effectiveness of service delivery. However, the computers have come with many challenges for the employers, this is because, and the computers are left in the hands of the employees who use them during production hours (August, Mayer & Bixby, 2009). Employers are concerned by the possibility of decreased productivity and loss of machine hours which results from the employees engaging in non productive tasks like internet and social networking during the production hours.
Furthermore, the misuse of computers could lead to copyright theft. The employers must be concerned by this because the music copyright corporation could trace the internet source which would mean legal actions taken against the employer. The employers are also concerned about the possession of inappropriate software. While some of these have legitimate use in network administration, the presence of such software at the very least raises concerns about the possibility that they may be used for hacking because it is not usual for antivirus software to detect network scanning software on user computer (Schaffer, Agusti, Dhooge, & Earle, 2011). Besides, some of this software is rigged by its writers to load backdoors and other malicious software to the computers it is installed on. The presence can represent a significant legal threat to the organization that permits it.
Computer misuse is so common that organizations should really have some plan in place to respond to it. Many organizations have HR procedures for dealing with misconduct by staff. It is also important that the employers monitor closely internet surfing of employees by blocking unused sites during working hours (Holmstrom & Milgrom, 1991). This will ensure that the employees only access the permitted sites by the employer. Also, the employers can introduce employee training programs aimed at equipping the employees with knowledge on computer usage best practices. This can reduces cases of breakages and use computer forensic techniques to secure and analyze evidence in misuse cases.
- The Sale of Goods Act imposes terms relating to goods matching samples or descriptions, and meeting standards of fitness, quality and title. Explain the nature of these implied terms and their effect on the parties. Indicate which terms are conditions and which are warranties. Explain the significance of the distinction.
Upon the implementation, the Sale of Goods Act of 1979 laid down the business transaction best practices and standards. The Act defines a buyer as a person who under an agreement buys goods. The seller on the other hand is defined as a person who agrees to sell goods to the willing buyers. Besides, the business involves legal transactions within both the public and private entities. The term goods refer to materials that satisfy the human want and have utility. It also includes emblements and industrially grown crops among others attached to or forming part of the land, which is salable (Schaffer, Agusti, Dhooge, & Earle, 2011).
The terms include important aspects of goods including durability, safety and their state. They also highlight the purpose for which the goods are manufactured and their condition. These factors must be considered during the manufacture and subsequent sale of the goods. Warranties include issues of the sale of products that when malfunctioned, they can be returned to the manufacturer and replaced or repaired (Fixing, & Case, 2009). It is through these warranties that individuals legally have the right to recheck the products and ascertain their condition. This step is also vital in customer satisfaction. This ensures that consumers purchase quality and durable products that are environmentally friendly (August, Mayer & Bixby, 2009).
- How does the Bulk Sales Act protect creditors when a business is selling all, or almost all, of its assets?
The Bulk Sales Act protects creditors whose assets are being auctioned or their liabilities are being transferred by the businesses they are indebted to. The creditors of the business can sue the buyer to collect their debts, even if the buyer did not agree in the purchase agreement to assume the debts if the terms do not comply (August, Mayer & Bixby, 2009). The Act requires the seller to furnish the buyer vital information regarding the business creditors, amount each creditor is owed and their addresses.
The bulk sales act operates in these circumstances to protect the creditors. The purchaser must obtain a list of creditors, notify them of the sale, and pay the proceeds directly to them, if they so wish. Great care must be taken to comply with the legislative requirements. Failure to comply will make the sale void as against the creditors, requiring the purchaser to account the creditors for the value of the goods.
Case and Discussion Questions
Chapter 10, Case 2, p 342: Evans v Teamsters Local Union No 31;
The case involved Evans who was employed for over 23 years as a business agent by Teamsters local union. He was dismissed unlawfully after the election of a new union executive. Evans through his lawyer accepted a 24-month notice. However, after 4 months he turned down the Union’s employment and was given a 24-month notice.
In the meantime, the union continued to pay Evans his salary and benefits. Evans stated during this period that he wanted a settlement which would see him retire and his wife replace him as the union’s business agent. Evans also became aware that other union employees who had been fired on the same day and in the same way had been reinstated, either with working notice or unconditionally (August, Mayer & Bixby, 2009). The union later requested Evans to return to that he return to his employment to serve out the balance of his notice period of 24 months and stating that, if he refused to return, the union would treat that refusal as just cause, and formally terminate him without notice. According to (August, Mayer & Bixby, 2009), that was not fair to the employee. First, the union withdrew the dismissal and wanted Evans to have four more month’s employment. After Evans saw the letter, he was upset for missing out on the 23-month employment position. Since his employment period had elapsed by 4 months, Evans only needed to work 8 months to be paid. However, he was asked by the Union to return to his employment to top the balance of the 24-month notice period.
Chapter 11, Case 2, p 384: Ocean City Realty V A & M Holdings
Mrs. Forbes, a representative of the Ocean City Holdings, assisted Mr. Holm of V A & M Holdings to purchase a commercial building located in Victoria area. Mrs. Forbes acted as the agent for Mr. Holm during the transaction. However, during payment requested by Mrs. Forbes, Mr. Holm directed V A & M Holdings to make a reduced payment Mrs. Forbes despite the fact that the latter acting on behalf of Ocean City Holdings (Fixing, & Case, 2009). After the transaction was complete, it was evident that Forbes did not involve Ocean City Company in the transaction and thus could not receive the commission concerning the agency laws and fees (August, Mayer, & Bixby, 2009).
The company might claim that during the negotiations, Forbes might have forced prices down to let purchaser to be satisfied and therefore Forbes could be able to get her injured negligence. This could be achieved by carrying out a fiduciary duty of accounting for the funds. Most importantly, it is not possible, under the law to delegate the agent. In addition, Forbes had to disclose all the material information (August, Mayer & Bixby, 2009). Forbes and Ocean City can counter argue that Halbauer cannot be paid half of the commission. Evidently, Mrs. Forbes forced the commission due and if such argument is validated, she might be forced to forgo the commission and pay it to A&M holding LTD.
Chapter 12, Case 5, p 420: Salesco Limited v Lee Paige
The case involved a joint share that was owned by the two groups and had been running a business together where Paige and Morra had intended to sell out the property that had a common tenancy in common without involving Salesco Limited (Fixing, & Case, 2009). The two acquired Old Spray-Pak. Capobianco was also seeking compensation for damages caused regarding the intentional sale of the property and loss of business time and profits that were expected (Fixing, & Case, 2009). An analysis of their relationship showed that Capobianco and Paige only operated as partners; they had no signatory rights for any transaction they made.
The final judgment awarded them only 40% of the shares. However, Paige and Morra misappropriated the funds and misused their privilege. Salesco Company had been entitled to 60% of the company’s shares (Fixing, & Case, 2009). The directors also oppressed Salesco Company.
Chapter 15, Case 1, p 535: Resch v Canadian Tire Corporation
This was the case of a young boy who was seriously injured in a bicycle accident and decided to sue the manufacturer and the vendor of the bicycle. According to the ruling of the superior court justice, it was held that the sale of goods act did not apply to the case since the boy was not the one who purchased the bicycle and therefore did not qualify as a buyer under the act. The court argued that there was a possibility of negligence on the part of the buyer. This was because there was no agreement relating to the intended users of the bicycle. Therefore, this warranted no suit on the part of the injured since the boy was claimed to be under age in experiencing the usage of the bicycle (Fixing, & Case, 2009). The court concluded that the Sale of Goods Act did not apply to the case.
Chapter 16, Case 4, p 568: Bank of Montreal v Canada (Attorney General)
The case was between the Attorney general who was acting on behalf of the government of Canada, sued the Bank of Montreal claiming some amount of cheque which had been forged and debited in the government’s account. The government upon learning of the forgery, waited for about four years before giving a notice to the bank to claim the reimbursement of the same amount. The bank refused to refund the amount claiming that they were not indebted to the government (Fixing, & Case, 2009). This was because the government had waited for more than one year upon learning of the forgery before claiming which is a requirement according to the Bills of Exchange Act. The government on the other hand, invoked the prerogatives of the Crown and the most senior Courts declared that the claim was well founded hence the appeal.
It was then held that the appeal be allowed as the lower courts were wrong in their ruling to consider the matter as to the extent the matter was bound to the crown (Schaffer, Agusti, Dhooge & Earle, 2011). Besides, the governments claim against the Bank of Montreal was based on the contract and the government was entitled to comply with the terms of the agreement. And since it had failed to honor the terms of the agreement, it had no right to claim against the bank.
References
August, R., Mayer, D. & Bixby, M. (2009). International Business Law: text, cases and readings. Upper Saddle River, NJ: Pearson Education.
Fixing, D. H. P. & Case, B. O. W. (2009). Craig M. Newmark. Readings in Applied Microeconomics: The Power of the Market, 334.
Holmstrom, B. & Milgrom, P. (1991). Multitask principal-agent analyses: Incentive contracts, asset ownership, and job design. Journal of Law, Economics & Organization, 7, 24-52.
Schaffer, R., Agusti, F., Dhooge, L. J. & Earle, B. (2011). International business law and its environment. Boston, MA: Cengage Learning.