According to Vago (2015), the law is an essential component in the society that provides rules and regulations to govern how individuals interact with business. Although the law maintains a harmonious relationship between business organizations and the community, Schaffer (2011) notes that the laws affect primary operations of businesses. Schaffer also mentions that businesses have a duty to observe and follow the laws concerning their activities to enhance their success, avoid unnecessary losses and fines. In fact, some business law scholars proclaim that success in business is determined by the ability of the businesses to make healthy choices as far as legal and statutory frameworks are concerned. With this in mind, this paper seeks to discuss the various implications of business law to the operation of firms with respect to two case studies. Worth mentionable, the paper is divided into two sections. The first section discusses the various implications of different business laws to the operation of a restaurant, The Great Catch. The second section seeks to discuss the various legal implications involved in the purchase as well as in advertising products with respect to The Perfect Dominica Company.
Case study 1
Legal implications for running The Great Catch, a seafood restaurant
There are specific statutory requirements that all businesses in Australia must pay particular attention to if they are to operate with minimal interruptions from the government. These primary areas of focus that businesses should pay particular attention to so as to avoid litigations include the sale of goods, consumer protection and property law. Important mentioning, such areas would be critical to the operation and success of the newly formed Great Catch restaurant.
Sale of goods
As noted by Bridge (2012), the sale of goods is the most common type of contract that businesses should pay particular attention to. The sale of goods in Australia is governed by the sale of goods act established in the year 1954. The Act sets out several rules as well as the terms and conditions that are to be followed during the sale of goods. Some of the critical areas of focus that are relevant to our business include:
Passing of property
The part 2, division 1 of the sales of goods act outlines specific laws regarding passing of property established under the sales agreement. Noteworthy to mention, passing of property occurs when ownership or the specific designation of goods is conveyed from the buyer to the seller.
From the mere fact that purchase occurs when customers order products from The Great Catch Restaurant, then legal requirements established by the sale of goods act are significant and must be followed. Some legal obligations and implications that might be of critical interest to the restaurant may include, breach of purchase contract between the customers and the restaurant, the risks for selling defective or damaged goods to clients and the approval and acceptance terms of the customers. The organizations should strive to ensure that these areas are adequately addressed to ensure that the restaurant doesn’t find itself on the wrong side of the law as this may attract significant fines from the authorities.
Contractual obligations
As outlined by the part 2 Division 2.4, all sellers have several contractual obligations that they are supposed to meet during trade. Specifically, this division describes various conditions and warranties that are subject to any agreement between the seller and the buyer. Important to mention, breach of particular conditions, either by the vendor or the customer, gives the injured party the right to renounce further obligations from the contract. On the other hand, breaching a particular warranty makes it possible for the injured party to recover damages. Given that our business has specific warranties, then particular attention must be given to the contractual obligations.
Correspondingly, the statutes in the division mentioned earlier outlines several requirements that a seller is supposed to concur to. To begin with, the act states that the goods that are to be sold should conform to the description given. With this, the specific foods served by the restaurant should be consistent with the description outlined on the restaurant’s menu. Also, the goods sold should be fit for purpose and therefore in case that the buyer lacks adequate knowledge about the goods, then the seller should give the correct description, one that is suitable for the buyer’s intended purpose. Returning to our example, the person dispensing the food should provide the accurate description of the food in question to a customer who needs clarifications to help the customer make the correct decision.
Consumer protection
The Australian business law points out various principal areas of consumer protection. Critical areas that would be significant for our business areas include; Advertising and quality dimensions, nature of conducting business and pricing.
Advertising and quality dimension
In the advertising domain, the Australian law under section 18(1) prohibits sellers from giving advertising misrepresentations about the quality of their products as well as the specified warranties of the product they sell. With this, certain aspects of advertising such as double ticketing, using customer’s testimonials without their knowledge, referral selling and pyramid selling, are considered by the law offensive. Also, an omission of some relevant information regarding a product can be regarded as misleading or deceiving and consequently, such event is perceived as an offense. With this in mind, the restaurant should tailor every advertisement effort to conform to the requirements of the law.
Nature of conducting business
The Australian law also cautions business individuals against engaging in unconscionable business conducts. Though unconscionable behaviors are uncommon in the Australian law courts, they do happen. Unconscionable conducts often occur during supply of commodities to other persons or in business transactions involving acquisition and supply of products to relevant parties. Since our restaurant is actively involved in the increased delivery of foodstuff to clients, it is notable that cases of unacceptable behavior may occur. As such, the business representatives need to be cautious of such practices and take relevant precautionary measures.
Pricing
The Australian Consumer Law under Section 3-1, Division 4 proclaims the need for business organizations to apply proper and fair pricing methods for their products. Notably, the section notes two important provisions that relate to pricing of commodities. The first provision mentions that, if double Stickering (where multiple prices are used to connote goods) occurs, the particular goods must be sold at the lowest quoted price. Translating this law into practice, the management of the restaurant needs to take great consideration in pricing their goods as this may have serious legal implications if not properly addressed.
Correspondingly, another provision regarding pricing necessitates business organizations to include a single price for goods and not the just a component of the entire price. In other words, a single price should be displayed conspicuously just as the other elements of the price. With the above law, it would be necessary for the company to include a single price for the foods served at the hotel rather than including just part of the entire price.
Case study 2
Part 1
Contracting in business is governed by common law in Australia. As defined by Lipshaw (2011), a contract is an agreement that is legally binding. For an agreement to be deemed legally binding, several requirements must be met. To begin with, the law of contract requires there be a concluded agreement between the participants of the contract which means acceptance of an offer to both parties. Secondly, both parties entering into contract must have the capacity to enter into agreement. Thirdly, the parties involved must have the intention to validate their contractual terms as legally binding. Also, a consideration must be given to either party of the contract in exchange for a promise to carry out a particular activity. With the fact that the above considerations were met during the purchase of the Oven by Manny and Bella, then the purchase of the oven can be regarded as subject to the law of contract.
It is worth mentioning that a contract is subject to expressed and implied terms. A contact that is characterized by oral agreement is subject to expressed set out during the contractual agreement. Moreover, if the contract is written, then the contract is subject to the expressed terms in written document.
Correspondingly, a contract may be subject to implied terms and major implied conditions in a contract encompass quality as well as fitness for purpose domains. Under the quality domain, implied terms necessitate that the goods sold should be of relatively good quality and free from harm. The fitness for purpose domain, on the other hand, requires that in case there is an imbalance of knowledge about a product on the client’s side, it is then assumed that the seller should rely on the client’s pre-contractual requirements to decide what the client wants.
With the fact that Manny and Bella had limited knowledge about the equipment they need and gave pre-contractual statements concerning the type of equipment they want then the fitness for purpose principle applies. Specifically, Manny and Bella explained to Tuscan Oven Pty. Ltd that they required a high-performing machine that could cook 15 pizzas every hour for 16 hours each day. However, upon purchase, they realized that the oven was unreliable and could only cook 12 Pizzas. With this, the quality and fitness for purpose domains were infringed.
Applying the principle of contract, Manny and Bella have the right to take legal action against the Tuscan Ovens Pty. Ltd for not honoring the implied contractual terms (quality and fitness domains). Upon litigation, the court can grant Manny and Bella the right to reject the goods and obtain a replacement or a refund. Alternatively, the court can also pursue the Tuscan Oven company to compensate Manny and Bella for the losses caused by the failure of their product.
Part 2
In the second instance where Manny and Bella changed the name of the oven from New Tuscan XX commercial oven to MB oven, the laws concerning patent were infringed.
As noted by McKeough, Stewart & Griffith (2004), the Australian law gives exclusive rights to intellectual property through the Australian patent law established under Patents Act 1990. The Act creates various legislations that govern the temporary monopoly use of a particular innovation as well as free use of innovations after a specified duration of time. Noteworthy, the law outlines three types of patent namely, the standard patents, innovative patents and also the patents of addition.
It is certain that the Tuscan XX commercial oven was patented especially with the fact that it represented the brand name for one of the products of a big company, The Tuscan’s Ovens Pty. Ltd. As such, manipulating the name of this product is against the laws established under the Patent Act. With this, the fact that Manny and Bella manipulated the name of the oven to MB oven could render the Tuscan XX commercial company taking a legal action against the latter due to the infringement of its patent rights.
Litigation of Manny and Bella by the Tuscan company would attract remedies at the option of the plaintiff with respect to the damages incurred. Also, the court the court may also decide on giving additional amount depending on the flagrancy of infringement of patent rights.
In summary, the law is essential to the society since it helps maintain harmonious relationships between businesses and individuals. Businesses should ensure active compliance with the law to enhance the effectiveness and efficiency of their operations and also avoid any unnecessary losses and fines. Some of the relevant legislation that businesses should pay particular attention as far as their activities are concerned includes laws to do with the sale of goods, consumer protection, contract laws as well as the patent laws. Compliance with such laws would help keep businesses from the wrong side of the law.
References
Bridge, M. G. 2012. Benjamin’s sale of goods. Sweet & Maxwell.
Lipshaw, J. M. 2011. Metaphors, Models, and Meaning in Contract Law.Penn St. L. Rev., 116, 987.
McKeough, J., Stewart, A., & Griffith, P. 2004. Intellectual property in Australia. LexisNexis Butterworths.
Schaffer, R., Agusti, F., Dhooge, L., & Earle, B. 2011. International business law and its environment. Cengage learning.
Vago, S. 2015. Law and society. Routledge.
