238CLS Law and Business Organisations

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 Introduction

The assignment is based upon discussing various legal concepts and principles for developing a valid contract that clarifies all the requirements that can drive the business. Case study of Boris has been selected who has been focusing towards planning his own talent show of “Future Dancers”. He has been looking forward to the host of his show and his Jeremy came for this post because Boris promised him when he was drunk. This assignment has covered all the essential elements that are associated with the formation of a valid contract by clarifying the position of the advert.

Fourelements needed to form valid contract

Valid contract refers to the agreement that keeps all the parties of businesses legally bound to the contract for a specified period of time. The four main elements that are required to form a valid contract are “Capacity”, “Offer”, “Acceptance” and “Legality” (Clarke and Scurry, 2020).  These four elements have been described below.

238CLS Law and Business Organisations

Figure 1: Elements of valid contract

(Source: Developed by author)

Capacity

Capacity of contract is also defined as the contractual competence that helps in describing the individual’s capability to enter into a forcible contract.  There are different classes of individuals who are not capable of entering into valid contract (Earn.g2.com, 2021). These different classes include individuals who are mentally disabled, intoxicated and of minor age. For instance, Jeremy is not eligible to be part of the contract according to this element because he belongs to the minority category.  Individuals lacking contractual capacity do not remain bound to the contract and they have the right to leave the contract anytime. The individuals influenced under the drug or alcohol is not considered to possess the capacity to enter into a valid contract because the court puts certain contractual obligations on them.

Offer

Offer is the other element of a viable contract that is defined as the statement of conditions and terms on which the individual remains bound to the contract. Offers in valid contract help in representing the promise of acting or not acting in a particular way (Yonjan, 2019). The courts offer “pre-offer” negotiations on the actual offers that are based on intent of contracts.  In this element of contract advertisements are considered as the part of discussions that are based upon the preliminary offers and negotiations. The business organizations have made any kind of advertisement then they become bound to the individuals who read that advertisement. As in the case of Boris, he has also made advertisements for recruiting hosts for his show and his friend came to him after reading that advertisement. According to the offer element of a viable contract Boris has already developed a contract with Jeremy.

Acceptance

The acceptance element of the viable contract is based upon accepting the offer by the individuals and their willingness to abide vital conditions and terms of the contract. An offer needs to be accepted in such a way that it can be seen reasonable for the particular situation (Gambo, 2020).  The acceptance comprises the unilateral and bilateral contracts that have to be done by the individuals in every business sector.  Unilateral contract is based upon a promise that is offered and performed by a single party whereas a bilateral contract is based upon the promises that need to be performed by both the parties. The majority members of the court say that acceptance is official for the contractors whereas   minority individuals claim that acceptance is a point of reception.

Legality

The legality element of the vital contract helps in displaying whether the terms and conditions of the contract are in accordance with the legal rules and regulations or not.  Legality states that if the subject matter of agreement is not legal then the contract remains invalid (Boukalas, 2017).  Contracts are developed for legal purposes only. For instance, Boris can form a contract displaying that Jeremy or any other host appointed will be provided fair pay for their work. Both the contractor and dealer needs to hold up the deal effectively with the contract that is legally protected by effective laws.

Clarification on position of advert

The case study depicted that Boris has put an advertisement on the newspaper that stated “Future Dancers is looking for a TV host, £10000 per episode”. After reading this advertisement Jeremy approached Boris for the job by reminding him of his promise. Boris argued that he had made the promise when he was drunk. According to the capacity element of the viable contract Jeremy is minor and Boris was intoxcible so they were both not eligible to develop a viable contract. On the contrary, Boris has put advertisements on the newspaper so he has developed an agreement with every individual who reads the advertisement according to the court rules and offers an element of a viable contract. Boris needed to have provided clarification of the position that has been mentioned in the advertisement with clear description of age and salary. Clear description of the post and time period displayed on the advertisement helps in providing complete clarification of the job to the individuals like Jeremy.

Possible issues associated with the case

The issues associated with the case are of minority and invincibility that stops Boris from making a viable contract with Jeremy. On the contrary, Jeremy can put a court case on Boris for not continuing proper details in the advertisement. An individual belonging to a minority age has the right to become a TV host if he/she is having effective communication and interactive skills (Bourne, 2019). Boris must not make promises to Jeremy while drunk he need to have considered all the legal regulations and rules for developing an appropriate contract for the individual who has to be selected for TV host.

Legal concepts and principles relevant to business

The legal concepts and principles need to be relevant for the business organisation as these can help in establishing an appropriate standard for the business according to which various tasks can be executed. The “Entertainment law” of the United Kingdom includes “Right  of publicity”, “Copyright” and “Trademark” (Westminster.ac.uk, 2021). These entertainment laws can help in providing legal protection to the entertainment show that has to be started by Boris.  The “trademark” rights gets provided to businesses if they want to launch their show on national television and this is done by filing trademark applications in the court.

Application of relevant laws to problem scenarios

The legal authority of the United Kingdom provides different entertainment laws for the individuals who are presented in the business of television shows.  According to these laws only Boris will be able to set his show effectively and efficiently on the television for attaining publicity.  Main legal requirement for every business is to develop an appropriate compliance plan for executing business successfully, legally and ethically (Akhtar, 2018). Boris needs a host for his show but he has to consider all the legal implications and ethical issues before appointing any host. He needs to emphasize upon appointing a well experienced host who can remain in the show until the contract gets completed. Jeremy cannot be appointed the host because he belongs to a minority age and he is not eligible for contractual capacity and he has the right to leave the show whenever he wants.  If Jeremy gets appointed as the host of Boris’s show and he leaves the show before completion of contract, then it will become difficult for Boris to search for a new host.

Distinguishing essential characteristics of common business vehicles

Essential characters of the common business vehicles have been described below.

Sole trader

Sole trader is the simplest and the easiest type of business vehicle that requires only a single individual to register for business (Bruwer, 2019).

Partnership

Partnership involves two or more individuals to register for a business and share profits, losses, costs, risks and responsibilities of the business organization.

Limited liability partnership

The limited liability partnership states that the business partner’s liability is limited to and depends upon the money they invest in their businesses.

Limited company

Limited company business vehicle is privately owned and managed business that is mainly owned by shareholders and managed by the directors (Schirmer, 2017). These types of businesses have their own legal rules and regulations.  

Requirements for common business vehicles

Boris needs to follow the “Sole trader” type of business vehicle because this type of business vehicle requires only a single individual to register for business. Sole tradership business structure helps the individual to form business constitution, manage administration and financing sectors of the business (Dudekula and Reddy, 2018). This type of business structure can help Boris to manage all his business and financial processes effectively.  On the contrary, the negative impact of solve leadership in Boris’s business is that alone he will not be able to manage his business processes effectively. He needs to do partnership with other individuals or groups of individuals so that he can effectively execute his business legally.

Rights and liabilities of shareholders

Shareholders are the individuals who are focused towards achieving common shared vision of the business. Shareholders possess various rights and liabilities that help in executing all the business processes efficiently.  According to the “Companies act of 2006” the role of shareholders within the business organisation gets defined (Legislation.gov.uk, 2021).  General meeting of the business gets organised and coordinated by the shareholders only.  Shareholders have the right to receive essential documents of the business organisation and make certain modifications in it.  Shareholders have the right to attain shares from the whole business profits according to “Companies act of 2006”.  Rules and regulations of the organisation are set by shareholders only.  Shareholders of the business organisations possess shares of limited liability only.  These individuals are not liable for the omissions and acts of the company. Shareholders possessing limited liabilities contributed in distributing equal amounts of profits (Kevorkova et al. 2019).  The main shareholders for Boris dance show will be the judges, host, contestants, investors and the audience. These people will help in enhancing the TRP of the show and Boris can attain huge profits. If Boris selects Jeremy as host of his show then he needs to follow the minority protection act of the United Kingdom.  The minority protection act is based upon developing guardianship relations with adults and minors.

Conclusion

At last it can be concluded that every individual who is going to start his/her business needs to emphasize on following various rules and regulations of that particular country. The assignment is based on analysing the main elements that are required for developing a viable contract with the other individuals. It is essential for Boris to make a contract with the TV host so that the selected host remains committed or bound to the show for the desired period of time.  The offer can be rejected by the individual only when they have mentioned complete detail regarding the post in the advertisement.

Reference List

Akhtar, Z., (2018). Legal Privilege and Third Party Disclosure: A Comparative Analysis of UK and the US Rules. International Commentary on Evidence, 16(1).

Boukalas, C., (2017). UK Counterterrorism Law, Pre-Emption, and Politics: Toward “Authoritarian Legality”?. New Criminal Law Review, 20(3), pp.355-390.

Bourne, S., (2019). Playing gay in the golden age of British TV. The History Press.

Bruwer, J.P., (2019). Critical innovation skills required of sole trader Small, Medium and Micro Enterprise (SMME) management and its influence on perceived business profitability.

Clarke, M. and Scurry, T., (2020). The role of the psychological contract in shaping graduate experiences: a study of public sector talent management programmes in the UK and Australia. The International Journal of Human Resource Management, 31(8), pp.965-991.

Dudekula, P. and Reddy, S.S., (2018). The Role of Women Entrepreneurs in India: A Study on Micro, Small and Medium Enterprises in Andhra Pradesh. IUP Journal of Entrepreneurship Development, 15(2).

Earn.g2.com (2021) “These 6 Elements Make a Contract Legally Binding” Available from <https://learn.g2.com/elements-of-a-contract.> [18 February 2021]

Gambo, I.Y., (2020). Mistake as Vitiating Element of A Contract: A Comparative Analysis Between Sharia and Contemporary Laws.

Kevorkova, Z.A., Petrov, A.M. and Savina, N.V., (2019). Towards liabilities of corporate systems. International Journal of Civil Engineering and Technology, 10(2), pp.1582-1593.

Legislation.gov.uk (2021) “Companies Act 2006” Available from <https://www.legislation.gov.uk/ukpga/2006/46/contents> [16 February 2021]

Schirmer, J.E., (2017). Why not have a Go with an East African Limited Company? What Company Law can contribute to the Integration Process in East Africa. RiA Recht in Afrika| Law in Africa| Droit en Afrique, 19(2), pp.162-172.

Westminster.ac.uk (2021) “Entertainment Law” Available from <https://www.westminster.ac.uk/law-courses/2021-22/september/full-time/entertainment-law-llm> [17 February 2021]

Yonjan, Y.K., (2019). An Analysis on Major Elements of a Valid Contract Under Muluki Civil Code, 2074. Available at SSRN 3437233.

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