A business partnership is more regulated due to the fact that the relationship can be volatile in sense of frequent disputes between partners. As a result it is important to be aware of the Partnership Act 1890

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Legal and Regulatory Framework

HNC assignment

For Paula Reily

Harjit Singh Sahota 3B051010

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Dear LMC,

I am writing this report regarding Mrs Davis who took delivery of two computers and a host of other equipment on 17th of July. The customer has stated that one of the computers is damaged and there is also a problem with interference with the other.

As Mrs Davis and you entered a contract which is legally binding and enforceable and was accepted by Mrs Davis, the issues that have been raised by Mrs Davies need to be resolved. The Sale of Goods Act 1979 which was introduced as a "remedy for any breach of a contract between the seller and the buyer" (Blake 1996) needs to mentioned as section 14 of the act states that "the goods supplied must be of satisfactory quality". It is clear from the letter that the computers supplied were damaged and the software may be faulty. As a result the act has been breeched. Although Mrs Davis has lost her cancellation right which is 14days, she is not entitled to a full refund of her deposit and will be made aware of this. However she will have been given a guarantee and it would be in your best interests to replace the damaged computer and provide the customer with suitable software to stop the interference. By "satisfactory quality" or under the Sale of Goods Act 1994 "merchantable quality" refers quality as goods that are fit for all purposes, free from minor defects and appearance and finish is free from any damage. As Mrs Davies brought the computers from you it is your obligation to the customer to replace the items under no cost to the customer. For LMC I think this is the best way forward.

The Consumer Credit Act 1974 was introduced to provide fair legislations to protect the consumer from sellers and suppliers. The act places certain restrictions on companies who offer credit to customers they deal with. Sections 44-47 of the act specifies that specific information relating to a good being purchased be made in the advertisement. Section 55-59 relates to the information that should be provided to the customer in the credit agreement. This should include the cash price, APR, total amount repayable by the customer, etc. As I am aware the customer is happy with the credit agreement but wants to cancel the agreement due to the problems with the computers. Section 62 relates to the cancellation rights of the customer and seller or supplier. In total the customer has 14 days from the date of signing the contract to cancel the agreement. Although section 99 of the act states if an agreement is "cancelled the buyer must return the goods and any monies paid should be refunded" (Needham 1999). However it only stands if customer cancels within 14 days. As a result Mrs Davies will loose her deposit of £365 if she cancels the credit agreement which can be done but at her expense. My advice to Mrs Davies would be to think carefully regarding her credit agreement. Is she prepared to lose her deposit even though the matter in hand can be solved?

The best way forward is for LMC to replace the computers and provide new software or even modem for Mrs Davies under her 1 year guarantee. As for Mrs Davies she should take the replaced goods and check them before accepting them. As for her credit agreement she should continue providing the goods she receives are fit for purpose.

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At the moment LMC is a partnership between two individuals however due to the expansion of the firm, the owners are thinking of turning the partnership into a limited company. In the paragraphs below I have provided key information regarding the decisions you face.
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A business partnership is more regulated due to the fact that the relationship can be volatile in sense of frequent disputes between partners. As a result it is important to be aware of the Partnership Act 1890: section 1 of the act defines partnership as "the relation that subsists between persons carrying on a business with a view to profit". In addition to this it is important to note that section 45 states that a "partnership can be any trade, Profession or occupation". As the partnership consists of two partners neither being the sleeping partner it is also ...

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