Legal Environment of Business - Literature review Example

?Legal Environment Introduction This paper talks about the legal environment surrounding sale and purchase of goods. In writing this paper, we purpose to advice Winston on the best course of action to take after a second hand car dealer sold him a defective track. We also aim to explain to him all legal matters that surround this issue so that he can be able to make the right decisions concerning the matter. The advice given in this paper would help Winston in knowing the steps to make as well as giving him the precaution which he have to consider in order to obtain justice. According to Crose & Miller (2011), in any legal undertaking it is good to understand about what is legally right and what is legally wrong in any kind of legal issue. Therefore, it is advisable that Winston understand where his rights were infringed and where he might have failed during contract signing so that he can lay out a base for his legal arguments. This would enhance his chances of winning the case and thus enabling him to obtain compensation. As a plaintiff in this case he also need to understand the courts that will be involved if the case reaches litigation stage and the procedures involved in this stage so that he can prepare adequately. This paper plays a very significant role in explaining these issues and thus it would be of great assistance to Winston. Any kind of legal environment or undertaking is influenced by various factors. According to Meiners et al (2011), some of the factors that influence the legal environment are the needs and demands of the business community, consumers, and the government. In this paper, we start by explaining the issues surrounding these factors. These issues are like the difference between express and implied terms, sales of goods act, difference between consumer and non-consumer sales, and process and procedures involved in the litigation stage of a case. We then proceeds to the argument stage where we argue his case on these factors in order to determine the steps he should follow in his search for compensation. Express and implied terms According to Klass (2010), express terms are those terms found in the literal meaning of the words of the parties involved in a contract or in other significant acts. These terms depends mainly on the setting in which a transaction was made and what the interests of both parties were during the transaction. These terms are rigid and cannot change to implied term whatever the case that interpret them. They also do not have further categories and we cannot have very many of them in a contract. However, each contract must have several of those terms clearly understood by both parties before signing. All other terms found in a contract, which are not express term, are regarded as implied terms. Unlike the express terms, these terms are subdivided to those implied primarily by factual circumstances of the agreements and those implied primarily by the law (Klass 2010). Also unlike the express terms, the terms implied by the factual circumstances of the agreement can change to express terms depending on the situation that interpret them. They are also found in larger number in any form of a contract. However, these two terms have one similarity, which is that they have to be included in any form of a contract and each party must read and understand them before signing the contract. According to Klass (2010), when interpreting a contract, a court gives more priorities to express terms as compared to implied terms. This is merely because of their characteristics and their ability to explain the contract and the situation in which the contract was made. The express terms can also reveal some of the factors that made either of the parties to sign the contract. Therefore when signing any form of a contract one should be very careful with the express terms because they can play a very great part in making a case ruled to your advantage in case of any dispute arising from the contract. Sales of goods act The sales of goods act deals mainly with the sales contract between the buyer and the seller. Its main purpose is to protect the interests of the two parties involved and to try resolving any kind of conflict that might arise between the buyer and the seller. This act defines what a sales contract is and gives the definition of other terms involved in such a contract. It also explains formation of such contracts, their effects, and their performance. It also explains the rights of the unpaid seller against the goods and gives action for the breach of the contract and defines the situations in which the terms and conditions of the contract becomes invalid. According to part 2 section 5 subsection (1), a contract of sale can be made in writing, by word of mouth, partly by writing and partly in word of mouth, or it can be implied by the conduct of the parties (Saskatchewan 1997). This act also put it as a requirement for all the contracts to contain terms and conditions. However, it does not allow each of the parties involved in the contract to trick the other party into accepting the terms and conditions of the contract through hiding some of the aspects of the product being sold. It requires that any contract be based on honesty of both parties involved in a transaction. According to part 4, section 8 of this act the buyer has the right to examine the property he is buying and he should be given the right information or else the terms and conditions of the contract becomes null and void (Saskatchewan 1997). This act is designed to protect both the interest of the buyer as well as the interest of the seller. It protects the seller against defaults in payment by giving him the rights of ownership to the goods not fully paid for. However, the most important impact of this act is that it protects the consumer from being tricked by the seller to buy defected products. Therefore, a good understanding of this act by any buyer is very important since it can assist him to realize where the seller of the defected product had tricked him and thus sue the seller for compensation. Consumer and non-consumer sales What distinguishes consumer sales from non-consumer sales is the sales principle involved in each of the two cases. The sellers’ obligation with regard to conformity and remedies is mandatory for consumer sales while they are not mandatory for non-consumer sales (Hondius 2008). This shows that these two kinds of sales are controlled and monitored by different laws. They also differ very much in their characteristics and in the situations in which they are employed. In consumer sales, the consumer is the center of all the activities and they mostly involve products that can cause many losses to the consumers. For non-consumer sales, the activities merely depend on the agreement between the consumer and the seller and in most cases, they involve products that cannot lead to much loss to the consumer in case of any defect. Litigation process of a case The litigation process is the process in which disputes between two parties in conflict are resolved using a court system. The case proceeds to this stage when the defendant pleads not guilty of a crime during the arraignment stage (Carison 2005). When a case proceeds to this stage, a civil court will be required to undertake the trial process in order to determine whether the defendant is guilty or not. This is because the case is civil and it involves a conflict between two parties that have been involved in a contract. It is in the jurisdiction of this court to determine whether to rule the case on the favor of the defendant or the plaintiff depending on the available evidence. When a case gets to this court, first, it is examined and a jury is selected to handle the case before the trial begins. During the trial the plaintiff lawyer, present his side of the case to the jury before the defense side being allowed to present their side of the case. After this, the plaintiff side is required to provide its evidence, witnesses, and exhibits if they are available. After this, the defense is allowed to present its side of the argument that is followed by its evidence, witnesses, and exhibits if they are available. After this process the prosecutor presents his closing argument to the jury which is followed by the defendant’s argument. The prosecutor then provides a reply argument and leaves the final part of the process to the judges in the jury. In the final step of this process the judges in the jury considers the applicable laws and then the jury provides its deliberation and verdict. The verbal negotiations You undertook verbal negotiation very well although you could have asked for a guarantee that the track will be replaced if it showed the defects which you suspected. During the verbal negotiation, your seller refused to give you full details about the track. He refused to disclose some of the defects the track had. He also tricked you by telling you a capacity of the track that was different from its rightful capacity. Although he did this because he was afraid that you might not buy the truck if you knew the truth, it was actually very wrong. He acted dishonestly during the whole transaction mainly out of self-interest. He did this with full knowledge that by the time you discover the defects it will be too late for you to reverse the transactions. By employing dishonesty, he violated the sales of goods act part 4 sections 8, which require him to provide right information to customers about the products he is selling. Although you signed the contract with terms and condition of the transaction, this can make this term and condition invalid. He also forgot that the sale he was making could cause his customer many losses and thus it was a consumer sale. Although the implied terms in the contract disfavors you completely the express terms which depend on the situation in which the transaction was made happen to favor you since it is clear that the seller tricked you into signing the contract with full knowledge that the product he was selling was not of the quality you wanted. You can therefore sue him for violating your rights during the verbal negotiation and ask for compensation. The oil leak and defective clutch Although you did not ask him about the clutch problem, he had the obligation as required by the sales of goods act to disclose that the clutch of this vehicle develops problem from time to time. Even though according to Saskatchewan (1997), these cannot be regarded as a breach of contract since you could have asked to try the vehicle for a certain period, it is a breach of warranty of the contract and thus you can sue the seller. However, according to the sales of goods act even if you win the case you cannot have the vehicle replaced what you can have is compensation for the losses you have incurred. The same happens because of the oil leak issue that the seller decided to give you wrong information although you had asked him about it. Actually this would be the stronghold of your case and thus if you capitalize on it, it can earn you victory. The exclusion clause Like the other clauses of a contract, exclusion clauses seek to define the rights of the parties to a contract (Kelly & Holmes 2002). However, this can play a very important role when the clauses in the contract are tailored to benefit only one of the parties involved in a contract. This clauses are used mostly when one of the parties in the contract, especially the in a position of commercial dominance, imposes terms and conditions to the other party. You should therefore require incorporation of such clauses, which can work to your advantage during the case period. This clause can actually play a very significant role in shielding you against the terms and conditions of the contract that you signed with the seller. Remedies Remedies are actually the compensations for damages you have incurred because of the actions of the sellers. You should undertake a valuation of the damages you have incurred because of the defected van that the seller sold to you. You should do this several dates prior to the actual date of the case so that you can also use it in the argument of the case. As indicated by the sales of goods act you should be compensated for all the losses you have incurred due to the failure of your seller to disclose all the right information about the product he sold to you. The punishment should even be more severe to the seller because he decided to lie to you when you asked him about the oil leak but that is for the court jury to decide. Conclusion Although the terms and conditions given in the contract fails to favor you because they were designed the seller, you can still sue him because of the defective track he sold to you. In suing him you should base the argument of your case on the sales of goods act, especially part 4 sections 8, which says that you should be given adequate and accurate information about a product by the seller when purchasing that product from him. You should also insist on the incorporation of the exclusion clauses to the contract that can act to your favor. Moreover, you should insist on the sale being regarded as a consumer sale because of the risks it was exposing you to and you should undertake a valuation of the losses you have undergo because of the act and use it in the argument of your case. This can actually play a great part in ensuring that you earn victory in the case so that you can get compensation. However, the procedure of the case is long especially if it reaches the litigation stage. You should therefore prepare yourself for the case and you should be ready to wait for the duration it might take the case to be determined. Your argument should be directed towards winning the case since argument from the people involved matter a lot. You should thus expect the ruling be either in your favor or otherwise and plan whether you will accept the verdict in case the case is ruled in the favor of the seller or whether you will file an appeal. Reference Carison, RL, 2005, Criminal Justice Procedure, 7th edn, Riverport: Elsevier. Crose, FB, & Miller, RL 2011, The Legal Environment of Business: Text and Cases: Ethical, Regulatory, Global, and Corporate Issues, 6th edn, Mason: South-Western Cengage Learning. Hondius, EH, 2008, Sales (PELS), Munich: European Laws Publishers. Kelly, D, & Holmes, AEM, 2002, Business Law, 4th edn, London: Cavendish Publishing Limited. Klass, G, 2010, Contract Law in the USA, Alphen aan den Rijn: Kluwer Law International. Meiners, RE, et al. 2011, The Legal Environment of Business, 11th edn, Mason: South-Western Cengage Learning. Saskatchewan, R, 1997, The Sale of Goods Act, Retrieved from: http://www.qp.gov.sk.ca/documents/English/Statutes/Statutes/S1.pdf, on 24 June 2012. Read More