Professional Documents
Culture Documents
Contents
Page no.
Question 1 (Part A)
2
Question 1 (Part B)
Case Laws
Question 2
Question 3
12
Case Laws
19
References
22
Question 1
Part A.
Negotiation is one of the most important skills in business; In fact
there is no other skill which will give better chance of optimising the
success and the organisations success, every time when negotiation
takes place there is always an expectation of an advantage (Gates,
2010). According to Fisher & Ury, 1992 Negotiation is a basic
means of getting what you want from others. It is back and forth
communication designed to reach an agreement when both the
parties shows interest that are shared and others that are opposed
According to Kennedy (1998) When two people meet to reconcile
their different solutions to the same problem, Interaction takes
place, their behaviour takes place also they attempt to change each
others perceptions using various forms of language and finally
settles down on a common solution, this is negotiation
From the definitions above it is quite clear that negotiation requires
compromise from both the parties, there is always something to
loose and something to gain in negotiation.
Negotiation is very important in business world; there is growing
interest in business negotiation which originates from minimum
three perspectives:
There are practitioners, who does negotiation and are also
interested in getting the feedback so that they can improve
their professional communication skills
There are beginners, who does not hold sufficient experience
with negotiations and they need help to become a successful
negotiator.
comfortable
with
or
even
skilled
in,
confrontation.
The basic step in determining the terms of the contract is to find out
what the parties said and wrote. The statements which are made
during the negotiations may be considered as representations or
terms and if someones is wrong, the plaintiffs remedy will rely on
how the statement is described.
A representation is a statement of fact which is made by one party
and that party offers contract to the opposite party. If the contract is
fake or incorrect the innocent party can sue for misrepresentation.
Breach of term of the contract entitles the injured party to claim for
the damages they have got and if he has been underprivileged
significantly to what he asked for then he can also reject the
contract.
If a statement is not a term of a principal contract, it is also possible
that it may be forced as a collateral contract (Law teacher, 2013)
Contract: Terms and Representation
Not everything that is said during the negotiations for a contract end
up being actual terms of the contract, some information only
amounts to a representation. A statement which is classed as a term
will become part of the binding contract, if the statement is not true
the innocent party can sue for damages. A representation however
does not become part of the contract, therefore if a representation
turns out untrue the innocent party has no legal remedy or they
cannot sue (Gillies, 2004. Pp. 66-67).
There are the four main factors which helps us in distinguishing
between terms and representations
Relative knowledge: Does one party have expert knowledge of
their subject? For example if a house dealer tells you something
about the property, its more likely to be a term but if we tell the
dealer something that is a representation (Paliouras et. al. 2011, pp.
56-57)
Dick Bentley Productions V Harold Smith Motors [1965] 1WLR 623
Reliance: Is everything really reliable in the contract? If you
particularly wanted a car with leather seats, if you tell the dealer by
making clear that you are buying the car only because it has leather
seats, which is more likely to be a term of the contract (Wishart,
2012. pp. 19-20)
Bannerman V White ([1861] 10 CBNS 844
Strength of the statement: If the strength of the statement is
strong it is more likely to be a term, for example once a seller said
there is no need to inspect the car, i guarantee its a good car.
This statement seems quite strong and the court held it to be a term
of the contract (Riley, 2012).
Timing: Did the statement immediately proceed? If the seller said
this car has alloy wheels and you straight away say Ill buy it right
now, then the alloy wheels are more likely to be the term of the
contract (Riley, 2012). Therefore longer time is more likely to be a
representation. This standard can contain both an objective and
subjective interpretation depending on the nature of the contract.
Clarity of working is also relevant when distinguishing a term from a
representation. This is because clear and specific statements are
more likely to become terms of a contract where as vague
statements are more likely classed as mere representations.
Schawel V Reade [1913] 2 IR 81
Case Laws
1. Dick Bentley Productions V Harold Smith Motors [1965] 1WLR
623
Held: The statement was a term, Mr Smith as a car dealer had
greater expertise and the claimant relied upon that expertise
(MacDonald & Koffman, 2010)
Individual Comment: Agreed with the judges comment, the car
dealer as being an expert breached the duty of care towards his
claimant.
2. Bannerman V White ([1861] 10 CBNS 844
Held: The statement that the hops had not been treated with
sulphur was a term of the contract rather than a representation as
the claimant had communicated the importance of the term and
relied on the statement, his action for breach of contract was
successful (Stone, 2011. pp. 181-182)
Individual Comment: As in this case the seller is successful in the
breach of contract, the claimant should raise as many legal defences
as possible including Affirmative defences. It is not enough to
simply let go the legal wrong doing and the claimant should respond
with every reasonable argument that justifies that the seller has
cheated.
3. Evans & Sons ltd V Andrea Merzario ltd
Held: It is common ground that the course of dealing was on the
standard conditions of the forwarding trade.........I would allow the
appeal (Rebeiro, 1996. pp. 14-15)
Question 2
According to Murray (2013), Litigation is a process of taking case
through court. The litigation is most common in civil lawsuits. In
litigation there is plaintiff (one who brings the charge) and a
defendant (one against whom the charge is brought).
In litigation, there are quite a few problems that occur and those are
time consumption, the process is considered to be lengthy,
uncertain outcome, high risk, and loss of privacy, personal life is
discussed in public.
Alternative Dispute Resolution
According to Browne et. al. (2013), ADR covers any option where
there is a dispute between two or more parties, that disputes relates
to civil legal rights and the dispute could potentially go to court for
resolution, the process may or may not involve the third party. The
parties to the dispute have a degree of control over the process and
decision taken through agreeing the form the process should take
and in some circumstances the final outcome
In simple terms ADR is a collection of processes which is used for the
purpose
of
resolving
conflict
or
disputes
informally
and
confidentially.
Mediation
According to Leibmann (2000), Mediation is a process by which an
impartial third party helps two (or more) disputants work out how to
resolve a conflict. The disputants, not the mediators, decide the
terms of any agreement reached. Mediation usually focuses on
future rather than past behaviour
The Mediation Process
Mediation process is designed to help mediators identify areas easily
where they need more research or preparation (Smock and Smith,
2008). In the mediation process the parties must enter into an
agreement to mediate and must sign the mediators conditions of
engagement.
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11
12
Characteristics of Arbitrator
As the arbitration process depends on an arbitrator he has to carry
himself in a satisfactory manner which gives the disputing parties
confidence in the integrity of the process (Kelly, 2013). A good
arbitrator is flexible and never burdens the parties with needless
formalities.
The effectiveness of Mediation and Arbitration in power
imbalance disputes
In certain employment disputes, such as those involving sexual
harassment claims, a perceived or real imbalance in the power
relationship between the parties may itself constitute an obstruction
to settlement. Mediation can be used effectively in combination with
other alternative dispute resolution (ADR) procedures, such as factfinding or facilitation to address specific needs in particular
employment disputes (Golann, 2009).
The initial expansion of individual employment rights came with the
enactment of title VII of the civil rights act of 1964, and that has
prohibited discrimination in employment based on race, colour, sex,
religion and national origin (Colvin and Pike, 2012).
Work place resolution has become a central focus in the UK for both
policy makers and employers in light of the increasing cost of
individual employment conflict most recently estimated at 410m
annually (Gibbons, 2007).
Conclusion
Arbitration is a confidential procedure and is considered to be
neutral, most importantly parties are able to select important
elements as the applicable law, language and venue of the
13
Question 3
LAW OF AGENCY
The law of agency is based on contractual principals. Agency is the
consensual relationship which arises when a person called the agent
acts on behalf of another called the principal whereby the latter
becomes answerable for the lawful acts of the former, carried out
within the scope of his authority, as to affect the legal relations
between the principal and the third party (Nwaka, 2013)
TYPES OF AGENCY POWERS
There are four main types of agency powers and they are:
Express Authority
Implied and Actual authority
Apparent or Usual authority
Ratification
14
Authority:
Apparent
authority
means
When
the
15
16
the partner has no authority and the third party is aware about his
authority.
The link between unlimited liability and partnership is where a
partner acts as an agent for an unlimited partnership he acts both in
the name of the partnership as well as the other partners. Therefore
if a partner is negligent both the assets of the partnership as well as
the assets of the partners are at risk.
DUTIES OF AN AGENT
There are few major duties of an Agent to the principal under the
common law and they are:
17
18
19
members
To exercise independent judgement
To exercise reasonable care, skill and diligence
To avoid conflict of interest
To avoid benefits from the third parties
To show an interest in a proposed transaction
(Wragge
&
co.
2013)
Directors may incur personal liability both civil and criminal for their
acts or omissions in directing the company (Institute of directors,
2010)
Under the Co.s act 2006 directors also have the following specific
powers:
Right to inspect company books: All the directors have the
right to inspect companys history, accounts and records
Power to make provision for employees: Under the section 247
CA 2006, directors have full power to make provision for the
better of the employees.
Power to call general meetings of the company: Under the
section 302 CA 2006, directors have full authority to call the
general meetings
(Davies,
2007)
Under the law until the enactment of the Companys Act 2006 the
duties which are obligatory on company director are:
Fiduciary Duty
The duty of skill and care
The statutory duties
20
remuneration
To act within authority
Duty to assign interest
Every partner is liable for all the acts of the firm done while he is a
partner. Because of the liability, the creditor of the firm can sue all
the partners.
If there is any loss which is caused to the third party because of the
partner, the firm is also liable for the wrongful behaviour of the
partner. If there is an incoming partner, he is also liable for the debts
and acts of the firm from the date of his admission to the firm
(Kumar, 2012)
According to the partnership act 1890, every partner in the firm is
liable jointly with other partners. In Scotland many times for all
debts and obligations of the firm incurred while he is a partner and
after his death the estate is also liable in a due course of
administration for the debts and obligations (HM Revenue &
Customs, 2013)
Conclusion:
It is worthy to note that there is a fiduciary relationship between the
principal and the agent; this is because the principal has a trust on
agent and he lets him work on his behalf. The agents authority
21
includes all the powers of the principal. We have also talked about
the duties of an agent to the principal, thus due to this relationship
principal owes high duty of care for his agents. The principals
power to furnish instructions to the agent is the fundamental
mechanism through which the principal exercises control over the
agent, a requisite for an agency relationship. The company director
also plays an important role as they initialise the legal relationship
with the third parties. However directors also have some responsible
duties and specific powers.
Case Laws
1. Beasley v Buckinghamshire CC [1997] QBD
Held: Cs complaint concerned not the policy decision whether to
use her services, but the practical manner in which the council had
acted, they had not supplied proper training and equipment
(Mandelstam, 1999 pp. 547-548)
Individual Comment: There is a tort of negligence as the council
owes a very high duty of care towards the foster parent. There is
also a damage which is caused to the foster parent and thus is a tort
of negligence.
2. Langley v Dray (1998) CA
Held: D owed a duty of care, he knew to have known that the
police were in pursuit and should not have gone fast on ice, and he
had a duty not to create such risk (Scribd, 2014)
Individual Comment: There is a tort of negligence, D was driving a
stolen car, and he being a road use owes a duty of care to other
road users as they may get harm due to his rough driving.
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23
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