Draft Submission

Student name:

University Name:
 
Module Name: Business Law

Report: LO01/LO02/LO03 and LO04

  
Date: 26 April 2022

Word Count: 3549

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Table of Contents
Scenario 01........................................................................................................................1

Different Sources of Law................................................................................................1

Laws that Organizations Must Comply With..................................................................1

Role of Government in Law-Making and How Statutory and Common Law Is Applied
in Justice Courts.............................................................................................................3

Scenario 02........................................................................................................................5

Potential Implications of Law on a Business..................................................................5

Hypothetical Business Problems and Application of UK and Sri Lankan Legal

Frameworks....................................................................................................................7

Reference List..................................................................................................................10

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 Scenario 01

Different Sources of Law

There are three primary sources of law in the UK: Statutes or legislative legislation, common law
(case law), and the European Union law. Though it is categorized as the third in the hierarchy, it
is subjected to criticism and hence comes in last place in the hierarchy of primary sources.

Normally, the sovereign of a nation drafts the country's laws. Legislation in the United Kingdom
is referred to as Parliamentary legislation. The real issue, however, is the delegation of authority
that occurs as a result of the actions of parliament (Philip, 2022). For purposes of this source of
legislation, it is appropriate to use the invented terms "enacted" or "consolidated". Statutes are
based on the idea that legislation is always evolving. Due to this, it is necessary to stay up with
the statute's provisions while discussing them. Therefore, students and researchers are
responsible for keeping up with the latest scholarly commentary and any suggested legislative
websites such as Legislative.gov, Lawtel and JustisOne (Macintyre, 2018). Then, the primary
source would be case law or common law, sometimes known as judge produced law. Common
law has several theoretical notions, such as the theory of precedents and the rule of law
(Macintyre, 2018). A law report is essentially a compilation of common law or case law. All of
the case law's final judgements are included in these summaries (ICLR, 2018). This remained a
hierarchy of legal reports in a hierarchical fashion. Those are the weekly law reports and the all-
England law reports, respectively. Specialty law reports detail a number of specific instances not
included in the general law report (Macintyre, 2018). If a case does not fit into one of the broad
series, it will be referred to in these reports. In the legal lexicon, there are still a number of
undefined situations that need to be classified into appropriate law reports. These notions are
enshrined as legislation in UK case law therefore; researchers looking for relevant precedents
online should consult current resources like i-law, Justice One, and Bailli (Philip, 2022).

Laws that Organizations Must Comply With

When going back to the subject matter the law is basically defined as the set of rules that
manages moral conduct in a society and various obligations. Laws come in place to act as a
deterrent feature and develop moral values on the legal background of a country. It slightly
depends on the religious, philosophical or political interventions but not all at the same time. The
sources as described before will be categorized as primary or secondary set of sources of law.

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Primary sources would include legislations, case laws and secondary legislation would rather
belong to books, journal articles and websites, online pdfs, decisions of the courts or foreign
jurisdictions mostly which are usually treated as persuasive in nature but not bound always in
the realm of legal framework (ICLR, 2018). Certain distinctions need to be made in certain
regimes of principle sources of law. First would be the distinctions of common law and statute.
Common law is outcasted by judges which are derived through precedent basically, also
through consumers as well. This method was originated from the ancient legal reforms of King
Henry in which the word common came in to use gradually. The word precedent was latinized
as stare decisis in which the court is bound by the principles of previous cases by the senior
courts. The common law basis includes substantive set of rules where criminal offences like
murder, duress, etc. will include. This proves the fact that such criminalized state of offences
has been dominated by the common law stance than the statutory purview in the legal
jurisdiction (ICLR, 2018). This objectively needs to be amended and overridden by the
legislation of the parliament. This concept of overriding is called trumping. Certain other criminal
offences like theft which were governed in the common law framework, now being governed in
the perception of the Theft Act 1998 which is the legislative regime (Samms, 2016). Murder
which was a common law offence is now intervened by the Homicide Act 1957.But there is a
limit into which common law jurisdictions can reform the current persisting law which is basically
common law to statutory interpreting. This is a step-by-step process in which the law
commission should look to review and propose and reform the way it should be matching the
moral perceptions of the society (ICLR, 2018). The relationship between common law and
equity would be in a slight distinguishing manner (Samms, 2016). As discussed previously
common law derived from the very past decades which was administered by the king’s court
and then equity was developed in a very slightly different manner where this system was mainly
based on discretionary remedies administered by a Lord Chancellor. This was happening when
injustices do really occur through common law. There are certain equitable concepts such as
trusts which are generally dealt within the part of the business of the chancery division. After the
emergence of the judicature act the law and equity seems to be running fused together and both
factors equity add common law is being taken into practical application in courts. The
organizations which are mainly dealt in these actions would be three branches mainly which is
parliament, executive and the judiciary (Samms, 2016). Then the secondary department would
be handling the secondary roles of law making to suit the requirement that would be the
provincial councils, public departments etc (Samms, 2016). There would be stages in the
process where the executive or the government intervenes in law making. This can be

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shortened as stages for easy reference. Stage 1 would be that the provided policies on major
conferences are made through debating and discussions. These conferences are particularly
discussed and the party requiring the law to be outcast should convey the necessary visionary
standards, goals and the necessary directions of the issue. Stage 2 would be ministers drawing
up the policy on the issue. This stage is commenced on national level in which the ruling party
converts the national government policy by the relevant constituting. The ministerial attempt is
to develop new legal criteria to bring in those provisions in to effect. However, though it is simply
said, it comparatively difficult task. There should be negotiations made with the relevant parties
and debates when criticism occurs during parliament. Stage 3 would be finalizing the policy
created. When all the discussions are finalized by the departments and the ministers in
parliament, they will proceed on to the final publishing procedure which is the publishing of the
white paper. The white paper refers to the statement of intention and the relevant policy
requirement plan intended. However, it will be again debated by the parliament and proved by
the cabinet (Samms, 2016). Stage 4 will be the passing of the law. Every time after the
publishing of the white paper it is considered as the ordinary legislation or the fetal stage law
making.it is up to the ministers and the relevant department of the law which is created to
achieve objectives and subject it to drafting the new law. Prior to receiving of the royal assent,
the relevant law is termed as the draft bill. The Stage 5 of the law-making. Stage 5 which is the
last stage is the subordinate law-making departments implementing the law and policy. After
passage of law from the parliament it will become published, and the ministers are to be
responsible for the implementing elsewhere suiting the requirement of the public (Samms,
2016).

Role of Government in Law-Making and How Statutory and Common

Law Is Applied in Justice Courts

Next is the application of the law created in the courts. This is basically termed as interpretation.
Judges would interpret the legislation in specific ways to it the material facts of the case. They
would be adopting the easiest way, or the literal interpretation as adopted in the Fisher v Bell
[1961] QB 394 and next they take is the original meaning of the statute and alter the meaning of
it to avoid the absurdity caused when interpreting. This is termed as the golden rule of
interpretation as adopted in cases like Greg v Pearson [1960] 1 WLR 830 (QBD) where Lord
Wensleydale states that ‘in constituting will and indeed statues ,and all written instruments, the
grammatical and ordinary sense of the words is to be adhered to unless that would lead to some

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absurdity ,or some repugnance or inconsistency’ .The next way of interpretation would be
mischief rule which was emerged from the Haydon’s case where 4 rules were assessed, they
are accordingly what was the law passed before the act was passed, next is what mischief of
defect is the act attempting to remedy and it is what the remedy that parliament had decided on
and next is what is the time of the remedy. If the rules are surpassed the mischief can be well in
accordance interpreted in court. The final way of interpretation is the purposive approach which
is one of the latest forms of interpreting adopted by the courts. This underlines the fact that the
purpose which comes out of the provision is underlined in the facts if the case and decides to
follow in accordance. This rule is said to be an extension of the mischief rule. These rules
basically have interconnections with the EU provisions when interpreting where the court takes
the EU standards into consideration and also domestic law as well. This was clearly seen in the
case of Pepper (Inspector of Taxes) v Hart [1993] AC 593.

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 Scenario 02

Potential Implications of Law on a Business

Certain other legislations which arises form secondary legislations such as regulations,
directives, orders etc. also make significant impact on different parts of law. This is basically the
rule of law as explained by A.V Dicey in how law plays a subsequent role in manifesting certain
modules such as contract, employment, and company law (Marr, 2017). On assessing how
company law plays a significant role in business, the concept of rule of law gives allowance to
understand what the relevant personnel of a business does in their own capacity and what sort
of outcome is expected out of it. Especially during the transactions and different activities that
are carried on in a business dealing (Marr, 2017). Additionally, the government restrains other
individuals from creating disputes which is the rule of law basically when handling such an
environment. For example, when internal complaints are made against some party in a
business, the internal dispute resolution should be responsible in making a neutral decision; this
is basically the rule of law in a particular workplace (Department for Business, Energy &
Business Strategy, 2020). Next is how contract law plays a significant role in legal business
upliftment. Contract law is basically the obligations which are enforced between two or more
parties which are basically legally enforceable as well. The rights pertaining only belong to the
parties who are privy to the contract. Improving oneself in uplifting or developing the motive in
contract law is up to the standards that person can intervene in a business activity of a product
or a service. Therefore, contract law is being to any purchase, selling, reselling, or even
rendering purpose as well (Department for Business, Energy & Business Strategy, 2020). These
are subjected to terms and conditions which pertain to some transactions between business and
clients; this ultimately defines the essence of the business and its functions. Basically, a
contract affects businesses in every aspect where either provision of a service or if they are
providing a product which basically must purchase, sell, resell, or render it. In each of these
actions there is some sort of a transaction taking place. Each transaction persists of a term and
condition. When giving basic evaluation on these three regimes of employment, contract and
company law intervening in a legal business concept. The Companies Act 2006 is the most
important source of law available. It is the longest act which is formulated in the current context
in UK for the company law which is comparatively lengthy when read. It was later superseded
by the corporation tax act 2009 as well. The main visionary behind this is simplifying the
company law, creating the procedural law for the duties of director, uplifting corporate

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governance faculties, granting beneficiaries for stakeholders, simplifying the burden which is
carried by the organizations of the UK. It is maintained in the section 171 to 177 of the Company
Act which sets the roles of the duties. This is basically the fiduciary duties vested on an
individual. This is also proven in the Football Club Ltd v Cabra Estates PLC [1994] 1 BCLC
363.

Employment law is important to safeguard the rights of the followers of a company who are the
employment team (employers and the employees).it provides responsibilities and duties to
employees. Several other faculties within the employment law are giving certain rights such as
maternity, paternity (Painter and Holmes, 2015). The Employment Tribunals Act 1965 adopts
employment law to make certain statutory procedure of various employment disputes. In
addition, it makes an impact to the employment rights Act 1996 in which they would make
changes in regard to fixed wages and working hours. The mandatory procedure when engaging
with contract law activities is that it formulates in legally binding the contract during the moment
when recruitment takes place. The contract as usual constitutes the terms and conditions which
are equally important to the party’s privy to the contract (Mckendrick, 2020). These conditions
will relate to the working hours, duties, employment tenure, different responsibilities, and
different conditions to expel. Also persist various penalties in case of breach of contract during
contract transactions. It is a known fact that businesses are very intricate and do consist of
various regulatory restrictions on different actions which are committed on business activities.
Each organization revolves around the three branches which are regulation, standard and
legislation. Regulations are mainly followed by a company as policies where each employer,
employee should adhere into. They momentarily are challenging and create obligations of
different sort but finally aid in development (Painter and Holmes, 2015). The government usually
develops legislation after a legislative session. In the legal process, legislation formation is a
phase. The form and functioning of a company are influenced by legislation. To provide a
healthy and safe workplace, firms must conduct a risk assessment. The defenses of the
company against future disparities are also strengthened and improved as a result of this. When
it comes to ensuring a stable working environment for employees, the law provides a clear path
to follow. Enterprises, especially small businesses, benefit greatly from the basic contrast
between the three expressions. If used over a short period of time, they may raise operating
expenses. As a long-term benefit, they may be useful to the company. According to Painter and
Holmes, regulations have been seen as a double-edged sword (2015). These have the potential
to have both good and detrimental effects on the business. According to the type and scale of

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the company, they help to minimize the risk of future litigation (Department for Business, Energy
& Business Strategy, 2020).

Hypothetical Business Problems and Application of UK and Sri

Lankan Legal Frameworks

Main impact which had been suffered by most of the businesses is the subrogation of the
pandemic since the past two years of the Covid-19. Certain individuals in the business are
seeking to engage in activities of the business but Covid-19 plays a big role in hindering the
actions which are taken place in a commercial business. This gradually made the businesses to
rise to different risks and negated opportunities. Threats and complaints against the business
started rising day by day in the UK which almost doubled in the years 2019 to the 2021.Certain
companies which never faced any legal actions had to face such consequences suddenly.
However, in the past five years the businesses were suffering from accusations, claims or
allegations due to unforeseen circumstances of the Covid-19. Many of the consequences where
legal actions were taken against them. The GT advisory is the personnel who look at the types
of claims which is available to any dispute in whatever breach of contract taking place, any
unfair prejudicial terms if imposed or corporate governance failure. However, in breached
instances of contractual obligation, the legal personnel would check as to whether this breach
was caused due to any misrepresentation or any fraudulent circumstances etc. and bring
necessary legal remedies on to it. Such legal remedies were common law remedies like
bringing in damages, specific injunctions and UCTA could be considered mainly. When
discussing about the unfair prejudice petitions which are brought up the Companies Act 2006
plays a major role in protecting the mismanagements that happens to shareholders in the way
of unfair prejudice petitions in the Companies Act s.994, a company shareholder may issue a
petition to savior the company’s actions on conduct basis. To obtain relief, the petition
shareholder should prove that the unfair prejudicial conduct matches with the company’s affair
such as the strategies followed and the company’s management decisions. This should affect
the employee interest and their roles vested with the company, this test is objective and is
checked with the assessing of how a sober or a reasonable person would have acted on such a
situation based on unfair prejudicial actions. Activities which are considered unfair prejudicial
are provision of remuneration or bonuses to the shareholders without reasonable justification.
Provisions of excessive opportunities to other businesses where the stakeholders and
shareholders must keep hold of their interest, allocating excessive shares to shareholders to

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lighten up the share capital, prevention of different shareholders from intervening to the
management of the company which are basically transparency issues. Once the petitioner who
is involved in the case establishes the conditions for unfair prejudicial terms, the court has the
entire discretion to make the order as it thinks suitable to the case in order to provide relief to
the matter which was complained of as in the section 996(1) of the CA 2006.This includes,
amending the articles of association of the company which is the constitution of the company,
next is the forging of the company to carry out a provision which was initially omitted in
exercising, Next is the exercising of the civil proceedings being brought against the company.
Mainly due to the pandemic the directors and shareholders of the company have been taking
deceptive steps to relieve from the economic pressure of the company. This led onto unfair
advantage of their shareholders. For example, the discretion as to whether paying of dividends
or maintaining directors’ salaries during the pandemic is secretly disclosed by the shareholders.
Terminating dividends left, will also affect the return which to be returned to the shareholders,
however equally remunerating director pay will lead to arriving of an unfair prejudicial practice.

When assessing the Sri Lankan framework, it is basically the effect of the Companies Act 2007
which is also based on the flow and does not have much of a differentiating feature to the UK
law but do constitute of slight changes to the legal anatomy. Contracts can be made orally,
through conduct, or through a formal agreement. Contracts are sometimes entered into with the
intention of defining the parameters of the parties' rights and obligations; regrettably, things
don't always go as planned. Breach of contract allegations range from anticipatory breaches
(when one party anticipates the other party will not comply with the contract and takes action) to
minor breaches (when a party fails to perform a term within the contract but the remainder of the
contract can still be performed as expected) to fundamental breaches (when a party fails to
perform a term within the contract but the remainder of the contract can still be performed as
expected) (when the breach is severe and either prevents the other party from performing the
contract or defeats the purpose of the contract).Contract breaches can take many forms,
ranging from late delivery of a service or product to product faults and non-payment for services.
The injured party must prove the existence of a contract to establish a breach of contract claim.
The aggrieved party must then show that the other party caused the breach of contract, which
resulted in a loss. Litigation should not be a reflex reaction, especially in business interactions.
The application of contractual dispute-resolution clauses may aid in the narrowing of concerns
or conflicts while maintaining commercial partnerships. There are also several steps that may
be taken to avoid the possibility of a lengthy legal process, which would result in increased legal
bills and the loss of critical management time. This necessitates a proactive strategy, which may

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include uncomfortable internal discussions and deliberate initiatives in relation to third parties.
Comprehensive risk assessments should be conducted and implemented in relation to
customers, workers, and external third parties, with such assessments being evaluated on a
regular basis. Businesses should also double-check that they have appropriate insurance
coverage for the types of claims they might encounter or want to pursue. Therefore, remedies
should be readily available during litigation for such breaches and disputes which momentarily
arise during the initial stages and end stages of a business.

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 Reference List

Companies Act 2006.[online] Available at:

https://www.legislation.gov.uk/ukpga/2006/46/contents [Accessed 24 Apr. 2022].

Department for Business, Energy & Business Strategy (2020). Challenges businesses face
when complying with regulation. [online] Available at:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/
file/944520/challenges-businesses-face-when-complying-with-regulations.pdf [Accessed 24 Apr.
2022].

Fisher v Bell [1961] QB 394 (Divisional Court).

Football Club Ltd v Cabra Estates PLC [1994] 1 BCLC 363 (England and Wales).

Greg v Pearson [1960] 1 WLR 830 (QBD) (England and Wales).

ICLR (2018). The English legal system - ICLR. [online] ICLR. Available at:
https://www.iclr.co.uk/knowledge/topics/the-english-legal-system/ [Accessed 24 Apr. 2022].

Macintyre, E. (2018). Business law. 9th ed. Harlow, Essex, United Kingdom ; New York:
Pearson.

Marr, B. (2017). The 10 biggest challenges businesses face today (and need consultants for) -
Hiscox Business Blog. [online] www.hiscox.co.uk. Available at:
https://www.hiscox.co.uk/business-blog/the-10-biggest-challenges-businesses-face-today-and-
need-consultants-for [Accessed 24 Apr. 2022].

Mckendrick, E. (2020). CONTRACT LAW : text, cases, and materials. S.L.: Oxford Univ Press.

Painter, R.W. and Holmes, A.E.M. (2015). Cases and materials on employment law. Oxford:
Oxford University Press.

Pepper (Inspector of Taxes) v Hart [1993] AC 593 (House of Lords).

Philip, M. (2022). Subject Guides: Law: UK Law. [online] subjectguides.york.ac.uk. Available at:

https://subjectguides.york.ac.uk/law/uk-law#:~:text=Primary%20legal%20sources%20can
%20be [Accessed 24 Apr. 2022].

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Samms, C. (2016). LEARNING OUTCOME TWO: Illustrate the Potential Impact of the Law on a
Business. [online] Colbourne College. Available at: https://colbournecollege.weebly.com/unit-7-
business-law/learning-outcome-two-illustrate-the-potential-impact-of-the-law-on-a-business
[Accessed 24 Apr. 2022].

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