商务契约关系outcome3.doc

Case 1Q1：Maggie 没受伤，她是否有权利起诉SELLER；商品是in a sale,是否影响MAGGIE的权利？（买方和卖方的关系）A1：1，Yes, she can do that.2，The basic law is the seller violation the Implied Terms of SOGA 1979. It is include four terms.a)Section 12 SOGA 1979 Implied Terms of Titleb)Section 13 SOGA 1979 Sale by Descriptionc)Section 14 SOGA 1979 Satisfactory Quality and ReasonableFitness for Purpose.d)Section 15 SOGA 1979 Sale by SampleThis case was violation Section 14 SOGA 1979.Section 14 implied two terms: Satisfactory Quality and Reasonable Fitness for the Purpose. The major violation of this case is Satisfactory Quality.⑴The standard of Section 14 of SOGA 1979 is “that a reasonable person would regard as satisfactory taking account of any description of the goods, the price (i f relevant)and all other relevant circumstances”.⑵There are factors that are listed in Section 14 of SOGA 1979 as potentially relevant in appropriate cases:☉Fitness for the purpose for which goods of the kind inquestion are commonly supplied.☉Appearance and finish☉Freedom from minor defects☉Safety and☉Durability⑶In this case, the tumble dryer is lack of safety and durability. Maggie just bought it two months, so it still a new tumble dryer. It was caught fire. Clearly, it is lack of durability. The tumble is a latent defect in the wiring that lead to detonate. So we said it is lack of safety.3,Maggie bought the tumble dryer in a sale, but it does not diminish the buyer’s rights unless they are classed as “seconds” etc or a particular defect is brought to the attention of the buyer as being the reason for the reduction in price. Maggie did not know the bug of the tumble dryer before she buy it. So Maggie’ s rights should not be diminished.4,◎The cited case is Thomson v J Sears ＆Co(1926), the pursuer purchased boots for himself and suffered periostosis of the foot as a result of the insole having crumpled up and become knotted and nodular. It should be obvious that the boots were going to be worn as footwear.◎In the case of Priest V Last(1903),a buyer was scalded after using a hot water bottle and was successful in suing the seller onthe basis that the bottle was unfit for the purpose.Strict liability also applies and it is no defence that the seller has done all that is reasonable to avoid breach of the provision.(nao)◎In the case of Frost V Aylesbury Dairy CO ltd(1905),where the plaintiff’s wife died from consuming milk containing germs of typhoid fever and the dairy could not defend the action on the basis that they could not reasonably have discovered the presence of the virus in the milk.(pao)Q2:Charlie受伤，MAGGIE该怎么办？（the injury of Charlie）A2:1, Charlie can not impaled the seller. Because that he is not the buyer.Charlie no contractual relationship with the seller. The provisions of SOGA 1979 only apply to the buyer, not to any other people or party. He has no claim against the seller under the Act.2,There is a case that Donoghue V Sterenson 1932,Mrs Donoghue drunk some of mixture and her friend then lifted the bottle and was pouring out the remainder into a tumbler when a decomposed snail floated out of he bottle and into her drink. Mrs Donoghue suffered shock and illness as a result. She claimed damages against the manufacturer. The House of Lords ruled that the manufacturer would have to pay Mrs Donoghue damages as he owed a duty of care to anyone using his product. He had failed in that duty of care.3,Accroding to the Consumer Protection Act 1987 that the seller hasto return both the purchase price and compensate for any damage.The buyer does not have to prove negligence on the part of the seller. To the dangerous products causing damages or injury, manufacturer should assume the strict liability. Just presume fault of manufacturer.4In this case, Charlie should according to the Consumer Protection Act 1987 to implead. The process should not prove the fault of manufacturer, just mention Charlie was injury.Q3:Seller说是厂商的责任，零售商是否可以就此免责。

Unit Title:Behavioural Skills for BusinessAssessor Name:Submission Date: 03/11/2014Outcome 1-3Candidate Name:Candidate ID:Course Group: Business with AccountingCandidate Grade: 2012Word Count: 2486ContentsQ1: Manage role theory (2)Q2: Behaviours Skills (4)Q3: Conflicts (10)Q4: Metting and Briefings (12)Q5: Time Management (14)Q6: Stress management (15)Q7:Problem Solving (16)References (17)Q1: Manage role theoryHenry Mintzberg’s research,the manage role consists of interpersonal role,informational role and decisional role. In this case, Jess as the role of a leader. Jess and the relationship between the employee is not good, but jess must establish a friendly relationship with them. Then she should lead the team to achieve organizational goals, also need to help and encourage the team to achieve the company's goal to complete the task of decision-makers.Interpersonal role:A manager’s interpersonal roles are the result of the position he or she holds in management.There are three roles below:Figurehead role:Duties may be involved in daily affairs, almost does not include a serious communication or important decision-making, however, they can be smoothly is very important to an organization, managers cannot be ignored.The top level manager represents the company legally and socially to those outside the organization.Liaison role:the highly manager according to communication with external environment, which get the favors and information for the organization. The top level manager uses the liaison role to gain favours and information. The supervisor uses management to maintain the routine flow of work.Leader role:Manager manages the organization, he is responsible for the members of the group work, make up the role of the leader on this point. These actions have some directly related to leadership, for example, in most organizations, managers are usually responsible for hiring and training staff. In addition, there are also some action is indirectly to exercise leadership.play a leadership to encourage, mobilization and communication between the manager and subordinate relationshipInformational role:The informational roles link all managerial work together; there are three roles about that:Monitor role:To seek and obtain some various in specific information for company. Disseminator role:The manager transmits special information into the organization. Jess should receive and transmit more information from people outside the organization than the supervisor.Spokesperson role:The manager disseminates the organization’s information into its environment. the top level manager is seen as an industry expert, while the supervisor is seen as a unit or departmental expert.In this case, Jess is a monitor role as a new manager, and she should monitor the behavior of staff and transmit important information to the company.Decisional role: The decisional roles make significant use of the information, there are four roles about that:Entrepreneurs:the role of manager can reformation the project and make decision.Disturbance handler:the manager is responsible for the remedial action when the company face the trouble. Resource-allocator:the manager is responsible for distribution the resource for each department. Negotiator:the manager as a representative for organization in the primary negotiates meet.In this case, Jess is the resource allocator as a manager. He's In a new team, the team has not yet been assigned. As the role of the resource allocator, Jess to unite the whole team. Fully allocated tasks, better communicate with other departments. Department at the same time a good task allocation can strengthen the team's ability to handle problems.Leadership theoryLeadership is just one of the many assets a successful manager must possess, some of approaches to leadership can be used for Jess. There are some approaches to leadership, which includes the trait approach, the functional approach, the behavioral approach, the style approach, the situational/contingency approach and the transformational approach.The trait approach: some trait should be possessed by a leader, which they should have the spirits about adaptable, ambitious and achievement-oriented, tolerant of stress and cooperative ect.The functional approach:John Adair argues that the effectiveness of the leader depends upon their ability to meet three overlapping areas of need of the group being led. Team needs maintaining morale, developing cohesiveness, maintaining orders, ensuring effective communication within the group. Task needs defining objectives, planning the work, allocating resources and so on. Individual needs personal issue，and dealing with conflict between group needs and individuals needs.The behavioral approach: Ohio State University studies and Michigan studies has the same result of study, they aim to employee-concerned and production-concerned. The style approach: the leadership Grid presents two axe vertical axis measure concern for people (similar to consideration or employee-concerned); the horizontal axis measures concern for task (similar to initiating structure or production concerned)The situational approach:Fiedler’s model of management,the contingency model,s uggests that a manager should choose task or employee orientation according to the interaction of three situational variables leader-member relation task structure,and lead er position powerThe transformational approach:intellectual stimulation, the extent to which the leader encourages free thinking and emphasizes reasoning before action and taken The functional approach. This approach focuses on the specific behaviours the leader uses their followers and this leadership is an aspect of the function, not of a particular person.Task need, Jess can put forward new requirements, this requirement can be a specific target. His team to finish on time according to the requirements. Team needs, Jess should ensure effective communication in the meeting. Individual needs, Jess method should be taken to improve oneself, let oneself more attractive. So let him have micro letter more. The team more cohesivedTransformational leadership use styles and techniques to your the desired. Charisma:Jess can attend some courses to improve yourself.Individual consideration:The degree to which the leader treats the followers on their own merit and develop them through coaching. Jess can be more merits to its ehrs staff like Abda and encourage the staff like Richard. Jess can encourage everyone team freely express their views before you make a decision.The behavioural approach which consists of consideration behaviour and behaviour associated with initiating structure. Thus Jess should improve the cohesion among the team by promote the motivation of Russell and relationship between him. Behaviour associated with initiating structure towards defining what needed to be done and how it should done in order to achieve the organization’s goals. Therefore, Jess should make a plan and try both her and her team to achieve this objective.there are some differences between the manager and leadership.Manager uses formal, rational methods to get things dones, while the leader uses passion and stirs emotions.Managers are responsible for controlling and problem tackling. But for leadership, its functions are mainly inspiring and motivating staffs to finish the work.The characteristic of effective managers was their ability to do the right things, rather than doing things right.The main function of manager is planning objectives and budgeting for company. However, leadership is just one important component to operate the manager’s function and establish direction. So the position of manager is higher than leadership. For staff, the decision of managers must be obeyed. But a leader who people can just follow their choices naturally.In this case, Russell was appointed as Jess as a manager. Russell has many followers. Thus Jess should best deal with the relationship with Russell and his followers. In addition, Jess can communicate more with them, to understand the needs of the employees and ideas. It can make jess and the relationship between the employees better. Carol's character is too radical. Jess should get the conflicts with Carol. When Carol got trouble with others, Jess should try her best to mediate the conflicts.Q2: Behaviours Skills1.AssertivenessThe definition of AssertivenessThe most used definition is by Ken and Kate Back, in 1982 they define assertiveness as:Standing up for your own rights in such a way that you do not violate another person’s rights--Expressing your needs, wants, opinions, feelings and beliefs in direct, honest and appropriate waysBill of right:I have the right to express my views and ideas.I have the right to ask for what I need.I have the right to say 'No' to unreasonable requests.I have the right to make mistakes sometimes (after all I have to learn). Assertiveness techniques have different kinds.1.Basic or empathetic assertion:It includes three steps:The step 1 is active listening.The step 2 is say what you think and feel in a direct way.The step3 is say clearly what you want to happen.The important point is to show that you have tried to take on board what the other person is saying first.2.Broken record:This technique is used in when you repeatedly make your point until the other person hears it. You can use this when refusing unreasonable requests, when saying ‘no’, and especially when the other person won’t listen.The key point is that your body language matches your verbal message.e of silenceSilence can be a particularly powerful form of nonverbal communication.4.Saying No is necessary, notice your immediate reaction and trust it.5. Foggingstep1: you don’t argue back directly or they will have something to hit out at.step2: you should continue fogging until the other person stops nagging.6. Disarming Angerstep1: Acknowledge the other person’s anger by saying something.step2: let the other person know that you what to solve the problem activity.step3: get the angry person to lower their voice and to sit down, using a normal voice and calming approach.step4: use active listening to hear all the complaints before moving onto problem solving.7.Negative assertionUse this to cope differently and to keep your dignity when you are being criticized for a mistake that there is no doubt you have made.In this case,Jess should create more opportunities and team communication. He should hold a meeting once a week. He should let the employees are active in the meeting. Everyone can express company's thoughts and discuss the best way to tackle the problems, which is helpful to build authority of leadership. At the same time, strengthen the team's trust.2. Influence:Influence is the power to swift other people to one’s will or views. There are a wide variety of strategies that can be adopted to influence. Some use power (power-push strategies), while others seek to bring about change without resort to coercion or use of position (influence-pull strategies).Influence Pull Strategies:Reason: Providing a logical argument to support a request.Friendliness: Developing the relationship between parties.Bargaining: Negotiation and being able to provide benefits in exchange for what you want.Assertiveness- Being firm about what you are requesting.CoalitionPower-push strategiesImage Building-From Referent PowerSelective information-From position powerScapegoatingFormal Alliances-becoming associated with those in more powerful positionNetwork-make many friends with influential peopleCompromise-giving in an issue that is unimportant so that you heighten chances of getting what you want later.Rule ManipulationOthersMethods: reasoning, assertion, exchange of beliefs, coercion favor, partnership.In this case, Jess can use the balance of power in team. In the new team, Jack and Russell are also respected member of staff. Jess can give a certain power to Jack and Russell. Through these way, they can help Jess better in the work. Jess also can using the the skills of courting favor. Elspeth has shown condsiderable ambition but she is poorly qualified, Jess can courting favor her focus on her weakness to influence. Jess can share her work experience and knowledge to attract Elspeth. Jess can promise some benefits to Elspeth so that influence her and attract her join her campaign.3. Negotiation:Negotiation is concerned with creating a situation with the aim of seeking agreement from opposing sides. The nature of negotiation includes interdependence, mutual adjustment and conflict and coordinating.Negotiation is an important tool to be used when avoiding conflict situations. Resolving conflict does not just mean simply winning. Effective negotiation results in satisfying the interests of all concerned in a win-win outcome.The process of negotiations:1.Preparing for negotiation-what do we want?2.Debate/argue/discuss-what do they want?3.Signal –giving an indication of willingness to move from a currently stated position.4.Propose- what “wants could we trade”5.Package-put proposals together6.Negotiating/bargaining-gain and give up7.Close-make final offers and decide to stop trading8.AgreeNegotiation skills include win-win situation, asking questions, testing understand, summarizing counter proposals.In this case, Elspeth is poorly qualified and her work is not of a particularly high standard. Jess can make a summarizing and counter proposals to her. This behavior not only help Elspeth can work well, but also attract a alliance. Russel and Jack have enough strength so that they are not obey Jess. Jess can use the negotiation skills such as win-win situation to attract them and create alliances, so that they can help Jess finish work well.Q3: ConflictsHyzinski& Buchanan gives the definition of the conflicts: Conflict is process which begins when one party perceives that another party has negatively affected, or is about to negatively affect, something the first party cares about. The conflict may cause by any factors: differences between individual and organizational goals; differences between departments or groups; differences between formal and informal organizations; between manager and managed; between the individual and the job; between individuals.1.Differences between individual and organization goal:Since the organization is relatively large, so the views and methods are also quite different, and these differences are the main cause of conflicts and disagreements occur.2.Differences between individuals:Because of the different living environment, such as education background, age, and culture, causes the differences on values. These differences lead to thedifficulty in communication.There have two types of conflicts:1. Interpersonal-this could be due to the relationship between individuals2. Structural-this is conflict that may result from particular ways in which organizations are structured and the roles that individuals have within structure.Effect:conflict owns positive effects and negative effects.The positive role of conflictFirst of all, the conflict resolution process is likely to inspire positive change in the organization.People in order to eliminate the conflict, to seek the path of change the existing way and method.To seek ways to resolve the conflict, not only can lead to innovation and change, and may make changes more easily accepted by subordinates, and even hoped for employees.Conflict may form a competitive atmosphere, encourage employee morale, work harder.The negative effect of conflictFirst of all, the conflict may be dispersed resources.Second, the conflict detrimental to the mental health of employees.With the passage of time, the existence of the conflict could lead to a mutual support, mutual trust relationship is difficult to establish and maintain.Third, require internal competition conflict, may cause adverse effects on the group efficiency.Internal competition could cause conflict may be due to the pursuit of local interests, conflict in competition for funds, personnel and other aspects, if not handled properly, it may have bad effect on the company as a whole.There are different approaches to dealing with conflict:1. Competing: try to get ones way2. Collaboration: working with the other party for a win-win situation3. Avoiding: ignoring the issue4. Accommodating: seeking to adjust to meet the needs of the other party5. Compromising: trying to find a middle groundIn this case, Carol is a man's lack of communication skills. So Jess can avoid approaches to get conflict with guests. For Russell, he has a lot of followers, and they all support Russell. So Jess can use Collaboration method to difference more rights to Russell to complete a job, to persuade question to work together with Jess, together to complete the job to reduce conflict.Q4: Metting and BriefingsMeeting are held of many reasons within organisations,there are exchange information, planning, decision making, team development, staff development, ideas generation and examining progress and so on.Different types:Giving information, gathering information and problem.The chairperson needs to ensure some items:for example, ensure the purpose of the meeting is clear and is communicated effectively to those attending and the time is managed effectively. They deal with conflict in a positive way, keep the focus, and they are classified and summarized point group keep progressing, follow-up actions from the meeting clearly defined. And decisions are made on who should do what the and bu the when, All of salient point are recorded in the minutes.As we known, the rules of a metting is important, so we should obey the rules. For example, attive and finish on time or stick to agenda under discussion. And thers is only one person talks at a time and everyone participates- be prepared to participate. Important point is be honest and don’t use sarcastic or cynical remarks. As well as, should pay attention-listen and try to understand others and no personal chit chat.Last , the ideas belong to yhe group and not the individual.For Jess, he should be the effective organization conference, first of all to obey the rules of the meeting, Jess to encourage his employees to express their views. Combined with some special skills let staff actively participate. Carol, have many opinions and in the past, he can said more. But have abrasive style and tends to rub people up the wrong way. So Carol was quite outspoken at the initial team meetings but recently hasn’t appeared interested. So Jess can use some skills to encourage Carol to say opinion again.Q5: Time ManagementEff’ words: Effective — having a definite or desired effect; Efficient — productive with minimum waste or effort; Effortless — seemingly without effort, natural, easy); setting objectives — work goals and life goals.If jess could be more effective time management, team management and will become more effective.Priority Setting:Divide the thing from important, non-important, urgent, and non-urgent. Then select the urgent thing first to do. Sure the non-urgent also shouldn’t be ignoring. It may important for the future. The important thing is also must do, the non-important can put behind.Planning and Scheduling Time:Let she have a clear aim to what time should do what, and other time have other thing to do. Can reduce the post- it notes on her desk, for her save time. Do more things.The Peak time: she can do the important thing at her peak time. Make sure have more effectiveness.Five Minutes Rules: this is a simple technique is particular useful when she have a large number of thing to do.In this case, Jess need to concern too much every day, distraction affect efficiency. Jess should face the problem to him to arrange order. The important things first. Jess can use the skills of the planning and scheduling time. Jess can make a plan which prompts her what time should do what, and other time have other thing to do. And using these way, Jess not only makes her clearer about my obligations, but also can save much time to do more things.Q6: Stress managementIn psychology, stress is a feeling of strain and pressure. Small amounts of stress may be desired, beneficial, and even healthy. Positive stress helps improve athletic performance. It also plays factor in motivation, adaptation, and reaction to the environment. Excessive amounts of stress however, may lead to many problems in the body that could be harmful. There are some behavioral symptoms. The stress response is a process. It is build up over time until we can’t cope. It is most effective to intervene early in the process rather than later.There are a variety of mechanisms that can be used to manage stress.1.Avoidance of stressors: try to identify what particular stressors we are affected byand seek to remove or avoid them.2.Adaptive behaviors: learn techniques such as time management and assertiveness.3.Adaptive physical responses: improve our diet, take more exercise or try to relax.4.Adaptive thinking and emotional responses: change how we view a situation bypositive thinking and changing our ‘self talk’.There also has some informal way to relieving stress:1.Changing you attitude and perceptions: Access to social support, in order toreduce loneliness; a sense of humor; Talk to friends, a balance between work and play.2.Changing physical quality: enough sleeping and rest; appropriate nutrition; heathcare plan.3.Changing environment: giving up some activities; changing job or residence;stating new job in other areas.4.Changing relationship between you and environment: confidence; improving skillin target and time managementIn the case, Jess of personal‘s stress has following: he cannot effectively communicate with subordinates and she could not effective control her own work time. Jess can go to fitness center exercise to relax or he also can go to see a musical or a movie to get enjoyment and relaxation of body and mind. The method of releasing others’ stress: Jess should recognize the reason why others feel stress and try her best to help others to solve the problem together. When others have stress, Jess can provide some personal suggestion and thoughts which may help others a lot. e.g.Carol can try to communicate with others, by the opinions of others to get to know her own shortcomings and to change and to relax.Q7: Problem SolvingThere are two types of problems and decisions, it is includes Programmed decisions and Nonprogrammer decisions.The problem solving process has six steps; as following, 1. Defining the problem;2.Developing potential alternatives;3.Evaluating the alternatives;4.Selecting the best alternatives;5. Implement the decision;6. Controlling and evaluating.Problem solving technique (such as substitute, combine and so on); managerial actions to solve problems (recognizing the existence of problem, acknowledging the problem, involving other party, understanding each other’s position, enlisting their co-operation, discussing possible solutions, planning action, resolving the problem in a mutually acceptable way).In this case the core problem is lack of effective communication.Jess as the manager of the company does not take action management activities of the organization, coordination and command. She also did not act well in the manager roles of figurehead, liaison and resource allocator. And she also has problem in giving authority to subordinates. The key factor leaded to his problem is that he didn’t have sufficient and effective communication with his staff and workmates.Jess should be according to the different tasks of different employees assigned to them, those distinct personality that is suitable for the employees, this will depend on how and employees jess subordinate communication can do that. He should solve the conflict between the staff immediately and its also should take care of keeping good relationship with other department and the when commanding works, He should express clearly what should be done. In addition, He also want to timely feedback the information to the organization.A lack of communication because jess. He will have a lot of pressure at work. It is largely affected jess's work efficiency. In addition, he in relatively poor time management skills. When Jess allocated work, the Elspeth got problem in work, she should immediately feedback to leader and not continue working. However, it is result in she continually fails to meet deadlines and often has to put in extra hours to cope.So this will influence the time management. And the Jess working longer hours than necessary. So the Jess must communication with well the Elspeth and improve the time management skills.ReferencesBook:F711/B394/2005Behavioural skills for business - Scottish Qualifications Authority.F279.23292/6Study on the mechanism of corporate culture power from the view of strategic human resource management- Yang HaoWeb:/wiki/Portal/subview/84918/8049943.htm#viewPageContent。

Case Study 1◆Questions:1. List the main business organizations recognized by Scots Law.2. Given the fact that Lisa will be running the business herself and, for the time being, she is unlikely to be employing anyone, how would you classify her b usiness?3. Identify two advantages and two disadvantages of the type of business organization run by Lisa.◆KeyQuestion 1The main business organizations recognized by Scots Law are:Sole trader, Partnership, Limited partnerships, Limited liability partnerships, Private companies, Public companies.Question 2①Lisa is running a very small business, so the most appropriate form oforganization is sole trader.②According to the Companies Regulation 1992, Lisa’s organization form does notfit for the condition of private company; such a private company is limited by shares or by guarantee and need only have on member.③As a result, we can judge that the organization form of Lisa’s company is soletrader.Question 3Advantages:①very basic legal requirements to comply with②Total control over his/her business and does not have to take into account the opinions of any shareholders.③It is the simplest form of business organization recognized by Scots Law④ A sole trader is to all intents and purposes to be regarded as a self-employed person.Disadvantages:① A sole trader may find it difficult to fund an expansion of the business because she/he can not offer shares to other parties in order to raise funds.(筹集资金)②If the business fail, the sole trader is said to have unlimited liability for any debts or obligations owed to third parties.③The inclusion of new partners would force a change in the nature of business, operation by converting it into a partnership or some other form of corporate body.④(in any case), A business expansion requiring a major injection of capital might entail a loss of control over the business because new members who are a source of new finance will almost certainly demand a say in the running of the business.以上优、缺点各选两个答即可Case Study 2Question 1What are the main differences between a traditional partnership and a limited liability partnership (LLP)?PartnershipUnincorporated bodyPartners have unlimited liability in respect of partnership debtsNo need to be registered with registrar of companies and no need to supply formal documentsRegulated by Partnership Act 1890LLPCorporate bodyMembers enjoy limited liability in respect of LLP debtsMust be registered with the registrar of companies and certain documents must be suppliedRegulated by LLP Act 2000Question 2◆What are the main advantages for an existing partnership when it changes to alimited liability partnership?①The reason why many traditional partnerships try to translate to LLP is that the members can enjoy the limited responsibilities.②Further more, under the conditions of losing of privacy and greatering external regulation for the members, lots of traditional partnerships definitely hope to translate to LLP.(because of LLP…)Question 3◆What is the nature of the legal relationship between partners in firm and membersof a LLP?①There exist a fiduciary relationship in law relationship between company and partners.②举例说明公司与成员之间的忠实关系Pillans Brothers v Pillans [1908]③According to Limited Liability Partnerships Act 2000, section 6 regulations, there should be recognized to an agent’s relationship between members and LLP.④The general rule of the law agency that an agent (member) must always act in the best interest of his principal (LLP).⑤ A member is not an agent of his fellow members.Case Study 3Question 1◆What is a company’s objects clause?①Object clause 是存在于Memorandum of Association 之中的。

Case 1Question 1●General principles of the law of delictThe law of Delict, like the law of contract, is a part of the law of obligations. A delict has been defined as: “a civil wrong committed by a person in deliberate or negligent breach of a legal duty, from which liability to make reparation for any consequential loss or injury may arise”. Delict is also known as the law of (ivi)wrongs‟ and applies to much of the same area of law as the English law of …tort‟.General principles of delictual liability is that a loss or injury, such as physical or personal injury, the loss of earnings, nervous shock, distress, damage to a reputation; caused by a legal wrong; caused by culpa on the part of the wrongdoer.Two exceptions will be discussed is that vicarious liability, where the defender is liable for the actions of another; and strict liability, where liability can arise without fault through statutory provision. Liability is transferred to the person benefiting or gaining by the actions of the wrongdoer and they are more likely to be able to pay and/or be covered by insurance. Vicarious liability is an example of joint and several liability as the injured party can sue both the employee and the employer.●Negligence and the duty of careNegligence is the most common delict and an action in delict arise where harm is caused carelessly or inadvertently. The law of negligence has developed to protect individuals from physical harm to the person and to property. Financial interests are only protected where the financial loss is consequential to the harm of the person or property. For a claim to arise in negligence, the following points must be considered: duty of care owed; breach of the duty of care; caused and causation and remote. And this is judged on what the reasonable man would or would not have done had he been in the defender‟s position to eliminate the risk which in the exercise of his reasonable foresee ability he had identified. In the case of Scott V London and St Katherine Dock Co (1861). Six bags of sugar fell on a custom house officer as he was passing under a warehouse loading bay.The bag were being lowered to the ground by a crane and there was no explanation for the accident. In the absence of an explanation the presumption was that the accident arose from the defender‟s negligence. And in the case of Smith v Leech Brain and Co Ltd (1961), a man was burnt on his lip by a splash of molten metal and his employer was held negligent in not providing adequate protection for the employee. This led to cancer although there was already a premalignant condition in his ;op tissue. The employers were held liable for his subsequent death.Question 2●Standard of careThe standard of care varies according to the particular circumstances, in this case Mrs McGregor was seriously injured in a car crash because her brakesfailed.Danny feels dreadful about this he should have spent more time working on Mrs McGregor‟s car. In the case of Hughes v Lord Advocate(1963) and Muir v Glasgow Corporation illustrates this point.●Breach of the duty of care◆Contributory negligence. Where the defender has been negligent but thepursuer‟s actions have partly contributed. The burden of proof is with thedefender. (Sayer V. Harlow urban Council (1958).◆Consent and volenti nofit injuria (one consenting no wrong can be done).When the pursuer freely and voluntarily with full knowledge of the riskinvolved agrees to take the risk no delict (Morris V. Murray (1991)).◆Damnum fatale. An act of God and would be outside the control of man.Example is cyclone, hurricane, and earthquake.In this case Danny feels dreadful about this he have spent more time working on Mrs McGregor‟s car. After listening to Danny‟s worries, Tom, the garage owner, has reassured him that he did everything that could be expected of a reasonably competent mechanic.Case 2Question 1●Liability applies to the keeper of an animalThe duty of care:There is no liability for a failure to take due care unless there was a duty to take care in the first place. A duty of care is imposed by both the common law and by statutory law. There is a breach of the duty of care. This indged on what the reasonable man would or would not have done had he been in the defender’s position to eliminate the risk he had defined. For example, the provision of the Health&Safety At work Act 1974.The burden of proof:The burden of proof is the obligation on a party to establish the facts in issue in a case to the required degree of certainty (the standard of proof) in order to prove their case. There is a rule of evidence known as res ipsa loquitur or the …facts speak for themselves‟ and here the burden of proof shifts to the defender. There are three conditions necessary for res ipsa loquitur to apply: the offending …thing‟must have been under the control or management of the defender or his employees such accidents do not normally happen where due care is taken there is an absence of explanation for the accident.Vicarious (in place of another) Liability: Someone can be liable for another‟s delictual act. This can come as a result of agency, partnership and employment.Liability is transferred to the person benefiting or gaining by the actions of the wrongdoer. Vicarious Liability of the employer for his employee‟s Actions Vicarious liability is an example of joint and several liability as the injured party can sue both the employee and the employer. To bring an action against the employer the pursuer must prove: That the wrongdoer was an employee of thedefender, and that the delict (wrongful act) was committed within the scope or course of his employment. If the employer is sued and found liable, then the insurance company can sue the employee for the amount that has been paid in damages which is unusual unless conduct has been willful, it is illustrated by the case of Lister V Romford Ice and Cold Storage Co (1957).Strict liability: The liability Where can arise without fault through statutory provision.The principle of no liability for pure economic loss has been qualified by some development in case law where there is financial loss caused by negligent misstatement and where financial loss is caused by careless acts in limited circumstances. In the case of Hedley Byrne & Co v Heller & Pareners(1964)In the case of Smith v Eric Bush (1989), the House of Lords held that such disclaimers could not exclude the liability of surveyor for negligent report as under the Unfair Contract Terms Act 1977it was not fair or reasonable to expect the purchaser to take the risk for losses arising form the incompetence of a surveyor.Question 2●DefencesThe following defences are available when concerned with liability in relation to both dangerous and non-dangerous species:Contributory NegligenceWhere the damage caused is due wholly to the fault of the person suffering itis said to be a defence under Section 5 of the Animals Act 1971.ViolentV oluntary assumption of the risk is a defence under Section 5 of the AnimalsAct 1971 but not if this risk is ordinarily incidental to that personsemployment. An example of this would be someone working as a lion tamersassistant.TrespasserUnder Section 5 of the Animals Act 1971 there will be no liability where thekeeper can prove that the animal was not deliberately kept to protect personsor property from trespassers of if it was that this protection was notunreasonable.In the case, the employer can use contributory negligence, consent and volenti non fit injuria and damnum fatale. In the case of Lister v Romford Ice and Cold Storage Co (1957), and in the case of Morris v Murray (1991),The defence of volenti was successful.Question 3Careless ActsThis is also known as the junior books liability after the leading case of Junior Books v V eitchi & Co(1982). That pure economic loss is generally irrecoverable, unless there are exceptional circumstances such as negligent misstatement or a special relationship akin to contract as in junior book. In addition, it should be noted that the junior book decision has been criticlsed in many subsequent court cases and should be read with caution.Case 3Question 1There are various defences available to a claim in delict and specifically covers the following: contributory negligence; consent and volenti non fit injuria; damnum fatale; immunity and prescription.There are many defenses available to be argued by a defender to an action. For example, defender could claim a defense on point of low. The defender could also claim that the pursuer‟s case was factually incorrect, i.e. A defense on point of fact.In the case(a), the Rap can use contributory negligence, consent and volenti non fit injuria and damnum fatale. In the case (b), the Margaret can use contributory negligence. In the case (c), He wants to use immunity to escape his liability.Question 2In the case(a), Jamesie intends to sue Rab for the injuries that he suffered as a result of his dangerous driving. the Rap can use contributory negligence, consent and volenti non fit injuria and damnum fatale to escape liability.In the case (b), Margaret attempted to apply the brakes as quickly as possible, but the bus driver was much slower to react, the defender is the bus driver, but his vehicle was unable to stop in time so the bus collided head on with Margaret‟s car. It is unexpected. At the same time, Margaret was not wearing her seat belt at the time of the collision, it is Margaret‟s negligence. So the defender coule use contributory negligence to escape liability.In the case (c), obviously, the Knockbuckle players, lost his temper脾气and kicked Gavin in the face during a scrum and he makes a excuse for this called that accidents will happen and anyone who plays the game knows this only too well. He wants to use immunity to escape his liability.Question3In the case(a), Jamesie got to the car and screamed at Rab to drive the car as fast as he could, so Jamesie has liability on the subsequent car crash, and in the case, we could find that Rab lost control of the vehicle, it is damnum fatale. Thus, Rap mightsuccessfully by use contributory negligence, volenti non fit injuria and damnum fatale to escape liability.In the case (b), the defender is the bus driver, he had out of control of his vehicle when the accident happened, so the bus collided head on with Margaret‟s car. It is unexpected. At the same time, Margaret was not wearing her seat belt at the time of the collision, it is Margaret‟s negligence. So the defender coule use contributory negligence to escape liability successfully.In the case (c), the Knockbuckle players, lost his temper and kicked Gavin in the face during a scrum and he makes a excuse for this called that accidents will happen and anyone who plays the game knows this. It is an intentional act, he wants to use immunity to escape his liability. I think It is chicanery and it never would have succeed.。

Business Contractual Relationships Student: Liu XuaoTutor: Yuan LinClass: BusinessDate: 12.26.2011Case 1Question 1A duty of care is a legal obligation imposed on an individual requiring that it adheres to a standard of reasonable care while performing any acts that could foreseeably harm others. And the first element must be established to proceed with an action in negligence. And the pursuer must be able to show a duy of care imposed by law which the defender has breached. In turn, breaching a duty may subject an individual to liability in delict. It is not a requirement that a duty of care be defined by law, though it will often develop through the jurisprudence of common law. So in some way, duty of care may be considered a formalization of the social contract, the implicit responsibilities held by individuals towards others within the society.At the case Tom and Danny has vicarious liability. The vicarious liability is an example of joint and several liability as the injured party can sue both the employee and the employer. So in the case Danny has a duty of care with McGregorFor example: Donoghue v Stevenson 【1932 】That is about Mrs. Donoghue had gone to a cafe in Paisley with her friend who bought her an opaque bottle of ginger beer. Mrs. Donoghue has find a decomposed snail in the bottle of ginger beer when her had drunk the beer. Mrs. Donoghue alleged that as a result of having drunk the contaminated ginger beer she suffered a serious illness. Mrs. Dononghue didn’t hav e a contract with the seller nor with the manufacturer of the goods and so was she can possible remedy in delict against the manufacturer on the basis of his fault in not taking care in the production of the product.Question 2The standard of care should Mrs McGregor have been entitled to expect from Danny is the standard of care varies according o the particular circumstances. Something like driving in a icy conditions would require a greater standard of care than in normal weather conditions.Like the case of Nettleshio v Weston (1971), a learner driver owes the same standard of care to the other road users as an experienced driver, as another road users and pedestrians are entitled to expect a certain standard of care.From this case Danny must pay more attentions on check and repair the break of McGregor’s car. As a result of, Danny understand if he cannot ensure there has not any worry with the brake of McGregor’s car, it may make the accident happen. And it would be a terrible result. But the end Danny did not spend more time on McGregor’s car, he just worked on it for about 45 minutes. And after that he only tightened some screws and the problem appeared to have been sorted. That’s all is Danny didn’t reach his standard of care.Question 3Yes, I think McGregor can claim damage compensation. Because this case is belong of the delict of negligence. In the case it is essential that the pursuer proves that the defender’s wrongful negligence has caused harm or injury to the pursuer.In the ca se, because of McGregor’s car brakes failed so the accident was happen. And McGregor also injured in the accident. Before accident she had put her car in the garage to check and repair, but Danny didn’t pay enough attention to check and repair. So Danny’s negligence is the reason why the accident happen and make McGregor injured. And McGregor can give enough proof to prove her car crash is the reason by Danny’s negligence. And the court can according the effective cause to rule that Danny or the garage owner should pay the compensation of damage to McGregor.Case 2Question 1The liability applies to the keeper of an animal is The Animals (Scotland) Act 1987 Act established provisions to clarify the strict liability for injury or damage caused by animals-that is liability even without deliberate or negligent conduct. It states that a person will be liable for any injury or damage caused by animal if three facts all apply:a) The person was the keeper of the animal at the time;b) The animal belongs to a species known as being likely;( i ) to severely injure or kill people or other animals, or( ii ) to materially damage property; andc) The injury or damage is directly related to those physical attributes or habits. The animals species’ known to be likely to injure or kill’ comprise dogs, and certain dangerous wild animals, which may injure by biting, or otherwise savaging, attacking or harrying.From the case Mark was the keeper of the dog. The dog belongs to a species known as being likely to severely injury or kill people or other animals. Because of the Animals (Scotland) Act 1987 Mark has strict liability with this accident.Question 2The precautions should Mark have taken when going for a walk in the country with Tricky are: a) take the dog chain;b) Sets a cap on the dog’s mouth.That may be can help Mark and his dog.Question 3No he can’t.Under the Animals (Scotland) Act 1987, the following defences are available to the keeper of an animal: if the injury or damage was due wholly to the fault of the pursuer eg where the pursuer goaded a docile animal which then attacked the pursuer in defence; where the pursuer has voluntarily accepted the risk ie volenti non fit injuria; injury or damage is caused by the mere fact that the animal is present on a road or elsewhere9 e.g. an animal straying onto a road and so causing a traffic accident )In this case, above three points are not satisfied, so Mark cannot defend for herself. Mark will carry out the strict liability.Case like Behrens v. Bertram Mills Circus Ltd 【1957 】The cases is about the plaintiffs, husband and wife, were both midgets and were on exhibition inside a booth in the funfair at Olympia, for which their manager had obtained a licence from the defendants, when the booth was knocked down by elephants on their way to perform in the circus ring. A small dog, the property of the daughter of the plaintiffs’ manager, which, contrary to regulations, had been brought into the funfair, had run out of the booth, snapping and barking at one of the elephants, which turned and went after the dog; some of the other elephants followed, and pats of the booth fell on the wife who received injuries. Evidence was given that the husband and wife were exceptionally dependants upon each other. The court hold the circus should have taken precautions to prevent the elephant from causing harm. So he circus should be liable for the injury caused to the plaintiff.Case 3Question 1Five defences available to a defender in a negligence action:a) Statutory justificationA person may have a good defence to an action in delict if he can show that his acts are covered by statutory authority.b) Self-defenceSelf-defence is valid defence if the defender acted to preserve himself, his family or his property, so long as the act was reasonable and in keeping with the nature of the threat. If a blow is struck in response only to verbal attract, there is no defence.c) CriminalityThe pursuer will be unable to claim damages if he and the defender were involved in criminal activity.d) IllegalitySimilar to the criminality defense, a person will not be able to maintain a cause of action if he has to rely on couduct which is illegal or contrary to the public policy.e) V olenti non fit injuriaIt is a common law doctrine which means that if someone willingly places themselves in a position where harm might result, knowing that some degree of harm might result, they cannot then sue if harm actually results. It only applies to the risk which a reasonable person wouldconsider them as having assumed by their actions.Question 2For the case ‘a’, Rab can defend by the defence of criminality. From the statutory justification: A person may have a good defence to an action in delict if he can show that his acts are covered by statutory authority. So Rab can defend because he and Jamesie were involved in criminal activity. For example: Ashton v. Turner 1981 RTR 54:After an evening’s drinking three men committed a bur galary and sought to escape in a ca r owned by one of them. The car crashed and the passenger was injured. He claimed damages alleging negligence against the driver and the car owner. The court hold that dismissing the claim that as a matter of public policy the law might not recognize a duty of care owed by one participant in a crime to another for acts done in the course of that criminal commission.I n the case ‘b’, the driver can defend by the contributory negligence. From the contributory negligence, it is common law defence a claim based on negligence, an action in tort. It applies to cases where a plaintiff has, through his own negligence, contributed to the harm he suffered. Because the driver was negligence due then he didn’t know Margaret would come out before and go across when the light change to amber, but the Margaret was negligent too.The cited is Hanlon v. Cuthbertson 1981:A female passenger in a taxi who was injured as a result of an accideng and he taxi driver argued contributory negligence because she was not wearing a seat belt which otherwise have protected her in the accident. The court hold the pursuer should have her damages reduced by ten percent as a result of the contributory negligence by herself.In the case ‘c’, Knockbuckle player who assaulted Gavin can defend by ‘vonlenti non fit injuria’. The vonlenti non fit injuria it is a common law doctrine which means that if someone willingly places themselves in a position where harm might result, knowing that some degree of harm might result; they cannot then sue if harm actually results. It only applies to the risk which a reasonable person would consider them as having assumed by their actions. Because Gavin is able to think of injure when the sporting. It is implies to agree.Question 3In case ‘a’ can be successful, because it is called criminality, they both committed crime, thus Jamessie can escape obligation.In the case ‘b’ the bus driver can reduce liability by the defence of contributory negligence. Margaret should have her damages reduced by 40% as a result because the action of the bus driver going across under the traffic light change to amber, didn’t break the law, but Margaret was not wearing her seat belt had broken the law.In case ‘c’ cannot be successful, because in the spor t, the action is normal and legal; actions refer to rule of games. In the case, Knockbuckie’s behavior was not out of those actions in the rule, thus he must be make obligation.。

Outcome 1From the case we know that Michael pushed an all weather jacket. Unlucky, there have something wrong with this jacket. After wearing for only one day the zip had broken and water had penetrated and he had felt cold. This jacket is the unqualified products and not sold by manufacturer’s description. The sale of goods Act 1979is the main piece of legislation helping consumer to seek protection when their purchases go wrong. Michael could protect himself rights through the sale of goods Act1979.The Sale of Goods Act 1979 protects the right of consumer. However, the act has been being modified and influenced by the followed legislation. Most notably of the subsequent legislation are the Sale and Supply of Goods Act 1994 and the Sale and Supply of Goods to Consumer Regulation 2002. In the section 2 of SOGA1979, contract sale is “a contract in which the seller transfers or agrees to transfer the property in good s to the buyer for a money consideration called a price.Michael needs to look at section 2 of SOGA 1979 and keep receipt or invoice of this jacket. The receipt or invoice show when Michael pay the jacket and get the jacket. This is sale not barter. Barter is use an item to replace another item, there is no money paid. It also can be the basis for Michael to protect his rights. In law, sale is a party obtains the ownership of goods then sold to another party. A contract can be in writing, be made orally, or party in writing and partly or orally.The section 12 of SOGA said that the seller must be the owner of the goods. If the seller does not have right of the goods and sells those goods, then the buyer would not gain a good title of goods. And if the third party has the ownership of the goods the buyer can not get the rights of the goods. The obligations from the section 12 can’t respected or astricted by the agreement under the Unfair Contract Terms Act 1977, as amended. Based on the decision from the case of Niblett Ltd v Confectioners Materials Co (1921) and McDonald v Provan (1960) consumers are successful to claim the seller breach the section 12 of SOGA.According to the section 13 of SOGA 1979 the seller to sell goods at the same time they must to fulfill their obligations. The seller to sell goods must fit himself description. It was held in the case of Roberts & Co &Yule (1896) and Grant v Australian Knitting Mills (1936) the sellers breach the section 13 of SOGA as the good not sold by description. The section 14 (2A) of SOGA rules that the seller sell good s must be fit for its purpose and have satisfactory quality. And the section 14 (2B) rules the goods must be appearance and finished, safety and durability. If not, you as the supplier are obliged to sort out the problem. In the case, the jacket is unqualified goods and not fits seller’s description. Michael can sue the seller.If the buyer have some special requirement about the goods they should tell the seller before buy the good. As mentioned above there is strict liability under section 14. Sothe buyer is unnecessary to prove the damage is caused by the seller.The claimant is entitled to have a legal action to against the defendant for the defendant goods (jacket) in terms of the sale of good Act 1979. So the seller could have s legal action to against Michael of his not clearly requirement. If buyer has some special requirement they should tell the supplier clearly before the section will apply.In this case Michael buys an unqualified jacket and the seller sold not by his description. Michael could claim the seller for breach section 13 and 14 of SOGA. In the case of Roberts & Co &Yule (1896) and Grant v Australian Knitting Mills (1936) the sellers breach the section 13 of SOGA as the good not sold by description. Michael could sue the seller to protect himself rights.Outcome2In this case Michael bought an expensive garden maintenance set included mower and the trimmer. He paid by credit from the credit company which normally provided finance for the shop’s customers. Few days later the mower and the trimmer break down and the shop is closing down.Michael could protect his rights through The Consumer Credit Act 1974. He needs to know something about the CCA1974. The CCA1974 rules that the company provide credit must have license. Company could apply for the; license in the OFT and hand in the apply table to the Director General. Applications for license are made to the Director General and have five years validity. If company provide credit without license is a criminal offence and will be result in imprisonment.The CCA 1974 gives consumer the right to settle a fixed sum credit agreement. If consumer needs to pay much money they should notices to the lender and paying the outstanding sum in full. In section 8 of the CCA 1974 a consumer credit agreement is defined as the creditor supplies the debtor with credit not exceeding￡25,000. a consumer hire agreement is defined in section 15 of the CCA1974 as an agreement made by owner of goods hire goods to other person and lasting for more than three months can’t require the hirer paid exceeding￡25,000. In this case is relate to consumer credit agreement not consumer hire agreement.Running account credit is said that the bank give debtors credit demand on up to an agreed credit limit. The credit include bank overdraft and some shop credit accounts. Fixed sum credit is said that the debtor can receives credit in a single sum or in instalments.The section 60 of CCA provides some rules for have a document. And it also was under the Consumer Credit Regulation 1983. The Consumer Credit Regulation 1983rules something seriously about the document. The document must contain the name and address of the parties and amount of the total charge for credit. There also should have amount and timing of each payment and the total amount payable. There need to provide details of any security to be provided by the debtor and details of any charges payable by the debtor if on default. In the first page must declare which type of agreement in this document. Last, the document must be signed and copies kept both debtor and creditor. Michael could provide the document to the judge.Under section 75 of the CCA 1974 both the creditor and the supplier are jointly and severally in fraud or breach of contract. Sometimes creditor is also the supplier of goods. If the supplier disappeared the consumer could claim the creditor to protect their rights. In this case the shop is closing down when the mower and trimmer break down. So Michael could sue the credit company which normally provided finance for the shop’s consumers.In this case Michael bought a expensive maintenance set included the mower and the trimmer. He paid by the credit due to the expensive. Few days later the mower and the trimmer break down and the shop is closing down. According to the credit company normally provided finance for the shop’s consumers Michael could claim the credit company to compensation his loss.Outcome3In this case, Michael buys the same set from another then he notices that the specification is different from the one displayed as a demonstrator. The electrical items were not as large and the hand held tools were fiberglass rather than the stainless steel.The Trade Description Act 1968 plays an important role in protecting consumer of goods and services through the criminal law. Michael could protect his rights through the TDA 1968. In section 2 of the TDA 1968 a trade description id defined as indirect or direct describe of goods.The fitness for purposes, strength and performance must include in the description. The description should have the date or place of manufacture, production and processing or reconditioning of the goods. The description need to introduce the quantity, size of the goods and the composition of the goods. In the description should have any other physical characteristics of the goods and other history of the including ownership or use. Another important point is to list any testing by any person and the results of such testing and any approval by any person or conformity with a type of approval.False description means misleading to a material degree. Relate to the case, Michael see the set displayed as demonstrator and buy it. Because of the displayed goods is a false description make Michael believe goods material. Michael could sue the seller false description. Based on the case of Wings v Ellis (1985) and the case of British Airways Board v Taylor (1985) consumers claim the seller for false description and breach of the section 14.In the section 14 of the TDA 1968 a false description is criminal offence for any person in a trade or a business. It included some situations. If someone make any statement which he knows to be false or reckless. The false description may be included the location, person by whom provided and amenities. The provision, nature and the time sometimes may be false. The false description also included manner in which and the approval, examination or evaluation of any person. In this case, supplier breach of section 14 due the false description. It will be a criminal offence.However the defendant is entitled to have a legal action to against the claimant, in section 24 of TDA 1968 called defence. The supplier may said that consumer give mistake or reliance information to him result in the defective goods. And that he has does his best to avoid take place this false description, due to consumer doesn’t tell him the details about clearly. Such as the requirement of size and material. Consumer should check up goods before out of the shop.In this case Michael purchased the garden good is not satisfied because it is different from the displayed one. Michael could sue the retailer for breach of section 14 of the TDA 1968, he should receive compensation. But the seller could defence because of consumer’s unclearly requirement lead to this mistake and he does his best to avoid this mistake. If retailer could provide strong evidence the defence may be successful. If not, the retailer must compensate the loss of Michael or give Michael the right size and composition goods.。

Case 11The main business organization recognized by scot law are: sole trader, partnership, p rivate limited company, public limited company.2Lisa do a small business so only have herself. So it is sole trader. Sole trader is someone who manages by herself and owns the business. The can take all benefits but also need face all the losses. Indeed, if the sole trader becomes insolvent his personal assets can be used to satisfy her creditors e.g. house, car etc. she is personally liable for all business debts i.e. they have unlimited liability.To set up as a sole trader does not require any formalities. They need not make any business information public.3Advantages:Sole trader is independence for ownerSole trader is Personal contact between business and customers Disadvantages:Sole trader is unlimited liabilitySole trader’s scale is difficult to expand because of limited capitalCase 21The piece of legislation which governs partnerships is the partnership Act 1890. the limited liability partnership Act 2000.Partnership have unlimited liability in respect partnership debts.Limited liability partnership members enjoy limited in respect of limited liability partnership debts traditional partnership is unincorporated body, Limited liability partnership is corporate body2The interests of limited liability is that person do not have to repay company debt.3Trust relationship. pillan brother V pillans. The court held that made in this business he had to account to the partnership for the profits.Case 31Objects of the company is outlining what type of work the company will be participat e in and can lawfully do. If it needed, staffs can change the objects clause after format ion by special resolution. The company terms should have reason, otherwise the comp any activities is invalid。

IntroductionSSP plc is engaged in food processing, supplying all the main supermarket chains with first class processed meat products. This report has been prepared at the request of the chief executive of SSP plc. It will analyse the information contained in the financial accounting statements of the company. It will consider the users of this accounting information, the sources of finance an analysis of the companys financial performance and position. In undertaking this report the company's financial statements have been examation in detail and key accounting ratios calculated . This report will introduce the users of financial information’s purpose and what financial statement will answer their questions. In the end, there are some recommendations. Users of financial information:ManagementThe Purpose of Financial Information: decide purchasing and pricing policies, etc. Assessment of performance and assistance in planning and control function.The Source of Financial Information: All corporate information, both public and private.EmployeesThe Purpose of Financial Information: Employees are generally interested in job security and future salary negotiations. They will therefore be particularly interested in profitability and the company’s future pro spects.The Source of Financial Information: Profit and Loss-- profit/tax figures. Directors report--future plans, employment details.Present ShareholdersThe Purpose of Financial Information: Assess the profitability of the company. Assess performance of the board. Whether to remain a shareholder in this business, increase or decrease investment, or to sell their shares and invest elsewhere.The Source of Financial Information: Profit & Loss –profit and dividend figures; Profitability ratios; Directors report – future plans.Potential ShareholdersThe Purpose of Financial Information: Income/growth potential from investment. Compare the profitability and future prospects of the company with others to ascertain the best investment option. Assess the risk attached to investment.The Source of Financial Information: Profit & Loss –profits retained/distributed; Balance sheet – capital structure; Ratio analysis.Short-term CreditorsThe Purpose of Financial Information: Evaluate the level of risk and the prospects of the money being repaid.The Source of Financial Information: Balance sheet – net current asset figures; Cash Flow statement – major inflows/outflows of cash; Liquidity ratio.AnalystsThe Purpose of Financial Information: Assessment of the company with a view to recommending investment or disinvestment, etc.The Source of Financial Information: All published information.Sources of Finance.A review of the balance sheet of SSP plc, has revealed the following sources of finance:Short term sources and loan capital:Trade Creditors--- This is normally considered a good source of finance as it is normally free and in the case of SSP plc the amount outstanding is £544,000 less than matched by monies due from debtors £306,000. This source should be used sensibly, otherwise supplies and ‘good name’ might not be put at risk. The figure in 2004 is less than in 2003. The creditors is £405,000 in 2004.therefore, it appears to be using this source of finance less extensively this year.Tax -- the corporation tax figure is not required to be paid until some nine months into the new financial year.Bank overdraft-- Company has a bank overdraft of £86,000. A bank overdraft is an agreed sum by which a customer can overdraw their current account. It is normally secured on current assets, repayable on demand and used for short term working capital fluctuations. The interest cost is normally variable and linked to the bank base rate.Long term source and loan capital:Debentures-- A debenture is a form of borrowing by a firm. It may issue debentures of a fixed value at a certain rate of interest. These debentures may be bought by individuals or by financial institutions. The debentures will have a fixed time period, after which they will be paid back. This may be 5 or 10 years or in some cases even longer. SSP plc has £1,560,000 of debentures in 2003.And in 2004,it also has £1,560,000 of debentures.Long term source and equity capital:Share Capital—There are two types of shares: ordinary and preference shares. Preference shareholders have a preferential right to a fixed dividend before any ordinary share dividend is paid. Thereafter the amount of ordinary share dividend paid will vary according to the level of profits. In the case of SSP plc has £1,950,000 of shares in 2003,and in 2004 it has been remained. So it is also £1,950,000 of shares in 2004.Profit and Loss Account-- Profit and Loss Account is the most important source of equity for a company. It is the ideal source of finance as it carries no service cost. Whether or not the shareholders will agree to profit being retained rather than distributed will depend on whether they feel the directors will make good use of it, and of course on how much they need the income. In the case of SSP plc £935,000 has been retained in 2003.In 2004,it is £1,355,000. This is a good sign, it shows the company’s Net Current Assets and Net Worth is increase, they have more money to invest in other items.Ratio AnalysisProfitability RatiosGross Profit PercentageThis ratio is an indication of the level of profit the business has made from buying andselling its stock.To calculate this ratio, we use the following formula:Gross Profit—————— x100SalesThe gross profit percentage in 2003 for SSP plc is 59.96%. And in 2004 the gross profit percentage for SSP plc is 60.06%. Reasons for the increase in the profitability of this company’s trading may 2004 has seen a partial rebound in the market and this combined with restructuring efforts has led to an increase in turnover by nearly 15%. Net Profit PercentageThis ratio shows how profitable a business is after all expenses have been taken into account. It compares the net profit figure with sales revenue.The formula for this ratio is:Net Profit Before Tax—————————— x100SalesThe net profit percentage in 2003 is 10.13%. And in 2004 is 6.73%. An decrease in the net profit percentage is a bad sign as it indicate the company is less profitable, perhaps because sales have decrease, cost of sales has increased or expenses have increased. In 2003 SSP plc’s cost of sales is 4674 and expenses is 5584. In 2004 cost of sales is 5345 and expenses is 6902. Cost of sales and expenses have increased. This reasons has led to an decrease in net profit before tax.Liquitidy RatiosCurrent Ratio(or Working Capital Ratio)This shows the ability of the business to pay its short-term debts.To obtain the current ratio, we apply the following formula:Current Assets: Current LiabilitiesThe current ratio in 2003 for SSP plc is 1.56: 1. In 2004 the current ratio is 1.78: 1. Generally speaking a healthy current ratio is at least 2: 1. A ratio of greater than 2:1 indicates that cash is lying idle. So in this case the current ratio in 2003 and 2004 are unhealthy. The main reasons for the increase in the current ratio are the decrease in creditors and tax. During SSP plc are planning to take even greater strides forward by opening a new processing plant in Glasgow that may account for the decrease in bank—this also reduced liquidity.The Acid Test Ratio(Quick Ratio)This ratio is considered a better indication of the business’ ability to meet its current liabilities.The ratio for the acid test is:Liquid Assets: Current Liabilities(Liquid Assets=Current Assets-Closing Stock)The acid test ratio in 2003 for SSP plc is 0.77: 1. In 2004 the acid test ratio is 0.64:1 . Generally speaking a healthy asset test ratio is at least 1: 1. the company whereas ratio of greater than 1: 1 indicates that cash is lying idle. So in this case the acid test ratio in2003 and 2004 are unhealthy. The main reasons for the increase in the current ratio are the decrease in creditors and tax. During SSP plc are planning to take even greater strides forward by opening a new processing plant in Glasgow that may account for the decrease in bank—this also reduced liquidity.Efficiency RatiosStock TurnoverThis shows the number of times in the period the business has replaced its stock. This ratio indicates how fast stock is turned into sales hence earns a profit for the firm. The calculation we will use for determining stock turnover is:Cost of Goods Sold——————————Closing StockThe stock turnover in 2003 for SSP plc is 7.69 times. In 2004 the stock turnover is 6.71 times. Generally speaking a higher rate of stock turnover is a healthy sign as it indicates that the company is buying more stock, most probably as a result of selling more. However, a higher rate of stock turnover can sometimes be a result of poor stock control. The company may be buying more stock as a result of stock being damaged, lost, stolen or wasted. In this case the stock turnover is decrease is a unhealthy sign.This decline may be explained by the poor stock mix or overstocking. Because the closing stock in 2003 is 608 but in 2004 it increase to 796.Debtors Collection PeriodThe length of the credit period granted to customers is an important factor that determines liquidity. The length of time a debtor takes to pay should be as short as possible.The ratio calculation is:Debtors———— x 365SalesThe debtors collection period in 2003 for SSP plc is 9.57 days. And in 2004 the debtors collection period is 12.33 days. Between 2003 and 2004, the number of days taken by debtors to settle has increased by 3 days. This is a bad sign as the company’s liquidity benefits from slow payment from customers.This increase may be explained by the longer payment period offered to encourage an increase in sales, poor credit control, poor invoicing system, poor reminder system, lack of incentives offered to customers or increase in bad debts.Capital Structure.Gearing RatioThis ratio considers the proportion of ordinary capital compared with other capital. To determine the gearing for a company, the following formula is used:Fixed Return Capital——————————— x 100Ordinary Share CapitalFixed Return Capital=ie loans + debentures + preference share capital The gearing ratio in 2003 for SSP plc is 80%. An in 2004 the gearing ratio is 80%. When analyzing this ratio, a lower figure is more favourable indicating that the company has greater control over how net profit is appropriated. So in this case the gearing ratio in 2003 and 2004 are healthy. The main reason for no change in the gearing ratio is the debentures and the ordinary share capitals are no change.Interest CoverThis ratio shows how capable the company is of covering its interest charges.To calculate interest cover:Operating Profit-------------------------Interest PayableThe ratio has decreased from 6.04times to 4.85times .this is not a good trend indicating that the company is less able to meet interest payments .this trend is due to the increase in debentures issued and an apparent increase in the interest rate.Cash Flow StatementOn the whole, the cash has decreased by ￡367,000. This is a worsening of the cash flow position. At 1/1/2004 the cash has ￡281,000 but at 31/1/2004 there is no cash moreover overdraft ￡86,000 from bank. The company made a profit of ￡1,135,000 that after adjustments translated to a cash inflow from trading of ￡1,345,000. This is a very healthy cash inflow.There are no increase debenture and share capital, both ￡1,560,000 and ￡1,950,00. Interest payments could be reduced in future by issuing ordinary shares instead of debentures. Alternatively, the company could seek to get a lower interest rate.There was also an outflow ￡234,000 for tax. This is an unavoidable outflow as it is based on profit.The next outflow is the largest outflow on the cash flow statement is ￡984,000 paid for purchase of fixed assets. This was a significant outflow and is the main factor contributing to the overall decrease in cash. The fixed assets was not fully utilized as demonstrated by the fixed asset turnover.Ordinary share dividend paid was ￡260,000. This is equivalent to 19% of cash flow from operating activities and is therefore an unreasonable amount. It is too high in ordinary share dividend, and then, it will affect the cash flow.Overall, cash flow is not good and healthy. Balance at 1/1/2004 is ￡281,000 but balance at 31/1/2004 is overdraft ￡86,000.ConclusionAim at 2003, the SSP plc sells increase 14% in 2004,but the net profit decrease. that because adminstation expense increased too much. Cause of SSP plc planed dilation,so they may strengthen the used of Long-term fiance.The liquid capital has been get worse for the reduction of cash, but the capital structure has stayed at the previous level so that its risk is low. The capability of giveout the dividend of this company has fallen down, but the profit of this company has get better than that in the previous year. However, on the whole, the company has bad cash controlling in this year.The company's capital structure seems stable although the increased reliance on short term debt cannot continue in the longer term. The planned expansion will result in a need foe both increased working capital and new fixed assets. New long term sources of finance must be sought to finance this.Recommendation:1. Business commonly purchase raw materials or stock for resale and pay for them later. So if the firm can make a trade credit, it will delaying payment for stock, cash is made available for other uses.2. There is a long period of accounts receivable, so the firm should re-examine the credit policy. Sequentially to improve the management of liquidity.3. Where a firm does not wish to purchase an asset outright, they may rent it instead from a leasing company. This is a medium-term finance to solve the cash flow and finance problem.4. Banks and other financial institutions offer loans to business for the purchase of land or buildings. The firm can use this methods to improve cash overdraft problem.5. When considering the funding of the expansion programme, the following points should be borne in mind:(1). No more fixed assets should be bought by mean of short term sources of finance. The company should match the requirement foe long term assets with long term sources of finance such as a new share issue or more loan finance (debentures). (2). In relation to a possible new share issue, unfortunately the current share price is low, perhaps a rights issue, after informing the shareholders of the advantages to be gained from the expansion, could be successful.(3). Wiht regards to possible new loan capital, the company is currently low geared and could certainly support new debt finance. It is , however, important to keep a watch on interest cover.Appendix—key financial ratios Gross Profit Percentage2003: 7,000/11,674 * 100=59.96% 2004: 8,037/13,382 * 100=60.06% Net Profit Percentage2003: 1,182/11,674 * 100=10.13% 2004: 901/13,382 * 100=6.73% Return on Shareholders’ Capital 2003: 1,182/2,885 * 100=40.97% 2004: 901/3,305 * 100=27.26% Current Ratio(or Working Capital Ratio) 2003: 1,195: 767=1.56: 12004: 1,248: 701=1.78: 1The Acid Test Ratio(Quick Ratio) 2003: (1,195-608): 767=0.77: 1 2004: (1,248-796): 701=0.64: 1 Stock Turnover2003: 4,674/608=7.69 times 2004: 5.345/796=6.71 times Debtors Collection Period2003: 306/11,674 * 365=9.57 days 2004: 452/13,382 * 365=12.33 days Gearing Ratio2003: 1,560/1,950 * 100=80% 2004: 1,560/1,950 * 100=80% Interest Coverage:2003: 1,416/234=6.05 times 2004: 1,135/234=4.85 times。