Commercial and Company Law

Click on the questions below to reveal the answer.

I’m about to enter into a business arrangement with a business partner. Everything seems fine. We’re in agreement on concepts and detail. Should there be a formal written agreement, if so how extensive?

A written agreement is best – almost essential. Often people don’t get around to arranging a document, let alone obtaining legal guidance. This can create problems later – problems which could have been eliminated. Too often, seeing a solicitor is left until something goes wrong, by then the options are reduced and costs and or penalties are increased.

When taking legal advice you can get guidance from someone who has been involved in similar situations in the past, can often anticipate matters the business partners may not have thought of, knows what impact the law may have as well as tax implications.

Sometimes, people dealing with problems of this kind think that in the absence of a written agreement a verbal agreement cannot be enforced. Many verbal agreements can be binding.

Very briefly, with a written agreement, the terms and conditions that should be included depend on the exact nature of the agreement. They include, but are not limited to:

• Contracts for the provision of goods and services;

• Employment agreements;

• Loans;

• Separation agreements.

Written agreements should be reviewed every now and again.

Remember that if something does go wrong, various rules and time limits will apply to making or defending a claim. Claims can include compensation for a range of items.

If you want more specific comments, Scammell & Co. offer an appointment where the first 30 minutes of the first appointment is free, so arrange a visit.

I entered into a business contract with a person who is now avoiding their responsibility under that agreement. What legal options do I have?

Sadly, this is not uncommon. There are many different reasons why people avoid their contractual responsibilities. The other party will often want the contract to go ahead, and will not be prepared to set it aside.

The defaulting party is said to be in breach of the agreement. The legal action that can be taken against them depends on many factors, including the nature of the contract and the breach.

It is important to know how the law operates in this area when considering your legal options.

The first thing that needs to be considered is establishing liability. That is, the legal responsibility the other party has to you arising from the contract, of which they are now in breach.

Once liability has been established, the next question to consider is quantum. This is the monetary extent to which the other party is liable to you. Again, the way in which this is calculated very much depends upon the nature of the case, and may involve putting you back into the position you would be in had the breach of agreement not occurred.

In some cases, liability can extend beyond a monetary figure. It may include an order compelling the other party to fulfil their obligations under the contract, the seizure of assets, etc.

Depending on the quantum of the claim, you may only be able to recover a fraction of your total legal fees. For this reason, many disputes are resolved by negotiation. Where negotiations are not successful, the only option left may be to bring the dispute before the Court.

What is strict liability? How could this affect your business or company?

Strict liability offences are those that only require the prosecution to prove that you carried out the offence. It does not matter that you did not intend to do it, or were recklessly indifferent or seriously negligent when carrying out the offence.

Strict liability offences include offences relating to the preparation of food, manufacture of products, and driving offences such as drink driving, drive unregistered and speeding. There is generally no defence to strict liability offences, although specific defences are sometimes expressly mentioned in the relevant statute that creates the offence.

If you operate as a company or business, the actions of your employees or even those you contract with for supply of products, could make you culpable, even if you have taken all reasonable precautions.

For instance, if a business manufactures food and a cigarette butt finds its way into the product because one of the ingredients purchased contained that cigarette butt, or your employee failed to thoroughly sift the product before using it, the business will be culpable under the relevant Act. Or, if a company causes pollution to enter the river after the mechanism that was being used to prevent this pollution became blocked with leaves, it doesn’t matter that the company had no idea that the mechanism was blocked. Maximum penalties are high.

Should you, or your business entity, find yourself charged with a strict liability offence, you may have a defence. For assistance and legal advice contact one of the lawyers at Scammell & Co. so we can maximise your chance of having the matter withdrawn, or at the least, receiving no record and a much reduced fine for the offence.