MacIntyre_ppr 02/08/2005 11:27 AM Page EWAN MACINTYRE second edition The second edition of this major text continues to provide an exciting and challenging introduction to the study of business law It covers a wide variety of business law topics in considerable depth and at a high academic standard whilst maintaining an easily readable style The content of the book is more comprehensive than is generally found in books of this nature It includes: the English legal system and dispute resolution; the law of contract; sale of goods and the supply of services; agency; the law of torts; consumer credit; company and partnership law; employment law; intellectual property; trade descriptions; misleading prices, and product safety The integrated approach taken emphasises the policy behind the law and how different areas of law are interconnected Business Law is a complete teaching package with many student-friendly pedagogic features and superb lecturer support, including a companion website and an innovative annotated Lecturer’s Guide Key features • A new chapter on the law of torts • Recent decisions and case law developments, including those arising as a result of the Human Rights Act 1998 • In the area of consumer rights and protection, changes to the Sale of Goods Act, the Supply of Goods and Services Act, the Supply of Goods (Implied Terms) Act and the Unfair Contract Terms Act • Major changes in the areas of bankruptcy and corporate insolvency under the Enterprise Act 2002 • In the area of employment law, new cases and legislative developments, including the Employment Act 2002 and the new raft of anti-discrimination regulations • Detailed consideration of the Limited Liability Partnership Act 2000 • The Electronic Commerce Regulations and the Computer Misuse Act • Comprehensive – the subject coverage of the book is wide enough for this to be the only law book that most business students will need • Easy to read – the style of the text is straightforward and accessible • Clear structure – the text in each chapter is detailed but contains frequent headings, test your understanding questions and key points to keep the reader firmly focused and constantly aware of the context and structure of the material • Additional support for lecturers and students – in the form of a Lecturer's Guide, and a companion website with student and lecturer access, providing regular updates on changes to the law that affect the book • A huge number of multiple-choice and summary questions – designed to be intellectually demanding and to give the reader the chance to apply the law contained in each chapter to problem situations Answers are given in the Lecturer's Guide and on the lecturer part of the website Ewan MacIntyre LL.B Cert Ed is a Senior Lecturer at Nottingham Law School He is an experienced educational writer in the field of business law and has taught the subject for many years Free updating service for this book at www.booksites.net/macintyre www.booksites.net/macintyre EWAN MACINTYRE second edition MACINTYRE New to this edition www.booksites.net Business Law Business Law www.pearson-books.com second edition Free updating service for this book at www.booksites.net/macintyre www.booksites.net/macintyre BUSL_A01.QXD 28/10/2005 12:35 PM Page i BUSINESS LAW BUSL_A01.QXD 28/10/2005 12:35 PM Page ii We work with leading authors to develop the strongest educational materials in law, bringing cutting-edge thinking and best learning practice to a global market Under a range of well-known imprints, including Longman, we craft high quality print and electronic publications which help readers to understand and apply their content, whether studying or at work To find out more about the complete range of our publishing please visit us on the World Wide Web at: www.pearsoned.co.uk BUSL_A01.QXD 28/10/2005 12:35 PM Page iii BUSINESS LAW Second edition Ewan MacIntyre BUSL_A01.QXD 28/10/2005 12:35 PM Page iv Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at www.pearsoned.co.uk First published in Great Britain in 2001 Second edition published 2005 © Pearson Education Limited 2001, 2005 The right of Ewan MacIntyre to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988 All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1T 4LP ISBN-10: 0-582-89422-0 ISBN-13: 978-0-582-89422-8 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data MacIntyre, Ewan Business law / Ewan MacIntyre — 2nd ed p cm Includes bibliographical references and index ISBN 0-582-89422-0 (pbk) Commercial law — Wales Commercial — England Title KD1629.M33 2005 346.4207 — dc22 10 10 09 08 07 06 05 Typeset in 10 12 pt Sabon by 30 Printed and bound by Mateu Cromo, Spain The publisher’s policy is to use paper manufactured from sustainable forests 2004048630 BUSL_A02.QXD 11/6/04 1:18 pm Page v CONTENTS Preface Table of Cases Table of Statutes Table of Statutory Instruments Table of EU Legislation The legal system Introduction 1.1 Features of the English legal system 1.2 Classification of English law 1.3 Sources of English law 1.4 European Community law 1.5 The European Convention on Human Rights Key points Summary questions Multiple choice questions Task The courts and legal personnel Introduction 2.1 The civil courts 2.2 The criminal courts 2.3 Procedure in the civil courts 2.4 Alternative dispute resolution 2.5 The legal profession 2.6 The judiciary 2.7 Juries 2.8 Law reform 2.9 Law reporting Key points Summary questions Multiple choice questions Task Formation of contracts – offer and acceptance Introduction 3.1 Offer 3.2 Acceptance 3.3 Certainty 3.4 Offer and acceptance when dealing with machines 3.5 Acceptance of an offer of a unilateral contract 3.6 Termination of offers 3.7 Battle of the forms Key points Summary questions Multiple choice questions Task xii xv xxxii xli xliii 1 22 32 38 40 41 42 43 43 43 49 53 58 62 64 66 67 67 69 70 71 71 72 72 72 77 83 85 87 88 92 93 94 95 97 BUSL_A02.QXD 11/6/04 1:18 pm Page vi vi CONTENTS Other requirements of a contract – intention to create legal relations – consideration – formalities – capacity Introduction 4.1 Intention to create legal relations 4.2 Consideration 4.3 Formalities 4.4 Capacity Key points Summary questions Multiple choice questions Task Contractual terms Introduction 5.1 Nature of contractual terms 5.2 Express terms distinguished from representations 5.3 Implied terms 5.4 Types of terms 5.5 Exclusion clauses 5.6 The Unfair Contract Terms Act 1977 5.7 The Unfair Terms in Consumer Contracts Regulations 1999 5.8 Consumer guarantees Key points Summary questions Multiple choice questions Task Misrepresentation – mistake – duress and undue influence – illegality Introduction 6.1 Misrepresentation 6.2 Mistake 6.3 Duress and undue influence 6.4 Illegal and void contracts 6.5 Competition law Key points Summary questions Multiple choice questions Task Discharge of liability – remedies for breach of contract Introduction 7.1 Discharge of liability 7.2 Remedies for breach of contract Key points Summary questions Multiple choice questions Task Terms implied by statute Introduction 98 98 98 103 117 119 121 122 124 125 126 126 126 126 132 135 137 141 147 149 150 152 153 154 155 155 155 167 175 183 187 192 194 195 197 198 198 198 214 227 228 229 231 232 232 BUSL_A02.QXD 11/6/04 1:18 pm Page vii CONTENTS 8.1 The Sale of Goods Act 1979 8.2 The terms implied by the Sale of Goods Act 1979 8.3 Sale by sample (s.15(2)) 8.4 Implied terms in contracts other than sales of goods 8.5 Exclusion of the statutory implied terms Key points Summary questions Multiple choice questions Task Sale of goods – the passing of ownership Introduction 9.1 The passing of the property and the risk 9.2 Reservation of title clauses 9.3 Sale by a person who is not the owner Key points Summary questions Multiple choice questions Task 10 Sale of goods – duties of the parties remedies international sales Introduction 10.1 Duties of the seller 10.2 Duties of the buyer 10.3 Remedies of the seller 10.4 Remedies of the buyer 10.5 International sales Key points Summary questions Multiple choice questions Task 10 11 Agency Introduction 11.1 The concept of agency 11.2 Creation of agency 11.3 Liability on contracts made by agents 11.4 Duties of the agent 11.5 The rights of the agent 11.6 Termination of agency Key points Summary questions Multiple choice questions Task 11 12 The law of torts Introduction 12.1 Nature of tortious liability 12.2 Negligence 232 234 251 253 259 261 262 264 265 266 266 266 278 281 289 290 292 294 295 295 295 300 301 306 315 320 322 323 324 325 325 325 326 332 335 339 340 344 345 347 348 350 350 350 351 vii BUSL_A02.QXD 11/6/04 1:18 pm Page viii viii CONTENTS 12.3 Negligent misstatement 12.4 The Consumer Protection Act 1987 Part I 12.5 The Occupier’s Liability Acts 1957 and 1984 12.6 Time limits Key points Summary questions Multiple choice questions Task 12 13 The law of torts Introduction 13.1 Private nuisance 13.2 Public nuisance 13.3 Strict liability (the rule in Rylands v Fletcher) 13.4 Trespass to land 13.5 Trespass to the person 13.6 Trespass to goods 13.7 Defamation 13.8 Vicarious liability 13.9 The tort of breach of statutory duty 13.10 Economic torts Key points Summary questions Multiple choice questions Task 13 14 Credit transactions Introduction 14.1 The Consumer Credit Act 1974 14.2 Types of credit transactions 14.3 Interest on trade debts Key points Summary questions Multiple choice questions Task 14 15 Partnership Introduction 15.1 The nature of partnership 15.2 The definition of a partnership 15.3 Specific indications as to whether or not a partnership exists 15.4 The partnership agreement 15.5 Partners’ relationship with each other 15.6 Partnership property 15.7 Partners’ fiduciary duties to each other 15.8 Partners’ relationship with outsiders 15.9 Dissolution and winding up 15.10 Limited partners Key points 366 367 370 372 374 375 376 377 378 378 378 381 382 384 384 384 386 388 392 393 394 395 396 397 398 398 398 427 431 432 434 435 436 437 437 437 438 441 443 451 453 454 458 464 468 470 BUSL_A02.QXD 11/6/04 1:18 pm Page ix CONTENTS Summary questions Multiple choice questions Task 15 16 The nature of a company and formation of a company Introduction 16.1 The nature of a company 16.2 The corporate veil 16.3 Classification of companies 16.4 Formation of registered companies 16.5 Contracts made before the company is formed 16.6 The company name 16.7 The Registrar of Companies Key points Summary questions Multiple choice questions Task 16 17 The management of a company Introduction 17.1 Directors 17.2 The company secretary 17.3 The auditor 17.4 Company registers 17.5 The annual return 17.6 Accounts and accounting records Key points Summary questions Multiple choice questions Task 17 18 Shareholders resolutions maintenance of capital minority protection debentures Introduction 18.1 Shareholders 18.2 The nature of shares 18.3 Company meetings 18.4 Resolutions 18.5 The legal effect of the articles and memorandum 18.6 Maintenance of capital 18.7 Protection of minority shareholders 18.8 Loan capital Key points Summary questions Multiple choice questions Task 18 471 472 474 475 475 475 479 482 488 494 495 497 498 500 500 502 503 503 503 520 522 525 527 528 530 531 532 534 535 535 535 536 542 544 548 551 557 564 568 570 571 573 ix ... variety of students who study Business Law; for example: n n n n Undergraduates who study one or more law modules as part of their accountancy, business studies or business- related degrees Students... a comprehensive treatment of business law in a way which is both interesting and easily understood The text covers most areas which could be classified as business law in an academically rigorous... 1.1 Features of the English legal system 1.2 Classification of English law 1.3 Sources of English law 1.4 European Community law 1.5 The European Convention on Human Rights Key points Summary questions