LAW FOR BUSINESS STUDENTS
At Pearson, we have a simple mission: to help people make more of their lives through learning
We combine innovative learning technology with trusted content and educational expertise to provide engaging and effective learning experiences that serve people wherever and whenever they are learning.
From classroom to boardroom, our curriculum materials, digital learning tools and testing programmes help to educate millions of people worldwide – more than any other private enterprise.
Every day our work helps learning flourish, and wherever learning flourishes, so do people
To learn more, please visit us at www.pearson.com/uk
LAW FOR BUSINESS STUDENTS
11th edition
ALIX ADAMS, STEPHANIE CAPLAN, GRAEME LOCKWOOD
PEARSON EDUCATION LIMITED
KAO Two
KAO Park
Harlow CM17 9SR
United Kingdom
Tel: +44 (0)1279 623623
Web: wwwpearson com/uk
Previously published 2000, 2003, 2006, 2008, 2010,2012 (print); 2014, 2016, 2018 (electronic)
Eleventh edition published 2020 (print and electronic)
© Pearson Education Limited 1996, 2000, 2003, 2006, 2008, 2010, 2012 (print)
© Pearson Education Limited 2014, 2016, 2018, 2020 (print and electronic)
The rights of Alix Adams, Stephanie Caplan and Graeme Lockwood to be identified as authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
The print publication is protected by copyright. Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN.
The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law Any unauthorised distribution or use of this text may be a direct infringement of the authors’ and the publisher’s rights and those responsible may be liable in law accordingly
Contains public sector information licensed under the Open Government Licence (OGL) v3.0. http://www.nationalarchives.gov.uk/doc/open-governmentlicence/version/3/.
Contains Parliamentary information licensed under the Open Parliament Licence (OPL) v3 0 http://wwwparliament uk/site-information/copyright/open-parliamentlicence/
Pearson Education is not responsible for the content of third-party internet sites
ISBN: 978-1-292-27224-5 (print)
978-1-292-27222-1 (PDF)
978-1-292-27223-8 (ePub)
British Library Cataloguing-in-Publication Data
A catalogue record for the print edition is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Adams, Alix, author | Caplan, Stephanie, author | Lockwood, Graeme, author
Title: Law for business students / Alix Adams, Stephanie Caplan, Graeme Lockwood.
Description: Eleventh edition. | Harlow, UK ; New York : Pearson Education Limited, 2020
Identifiers: LCCN 2019048203 (print) | LCCN 2019048204 (ebook) | ISBN 9781292272245 (print) | ISBN 9781292272221 (PDF) | ISBN 9781292272238 (epub)
Subjects: LCSH: Law England. | Commercial law England.
Classification: LCC KD661 .A33 2020 (print) | LCC KD661 (ebook) | DDC 346 4207 dc23
LC record available at https://lccn loc gov/2019048203
LC ebook record available at https://lccn loc gov/2019048204
10 9 8 7 6 5 4 3 2 1 24 23 22 21 20
Front cover image © d1sk / iStock / Getty Images Plus
Print edition typeset in 9 5/13 pt Avenir LT Pro by Spi Global Printed in Slovakia by Neografia
NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION
Contents
Publisher’s acknowledgements
Preface
Table of cases
Table of statutes
Table of statutory instruments
Table of European and International legislation
Part 1: Introduction: getting started
17
Rights at work: The contract of employment and health and safety at work
18 Rights at work: Protection against discrimination in employment
19 Rights at work: Protection against termination of employment by wrongful and unfair dismissal including redundancy
Part 5: Introduction to company law
20 Business organisations
21 Forming a registered company
22 Running the company: Raising and maintaining capital
23 The management and governance of companies: Functions of directors, secretary and auditors
24 Company meetings, shareholder participation and minority protection
Part 6: General principles of intellectual property law
25 Statutory intellectual property protection: Copyright, designs, patents and trade marks
26 Common law protection of intellectual property: Passing off, malicious falsehood and breach of
Appendix 1: Additional resources
Appendix 2: Worth thinking about? and Review questions – outline answers
Index
Companion Website
For student resources to complement this textbook and support your learning, please visit go.pearson.com/uk/he/resources
Lecturer Resources
For online resources tailored to support the use of this textbook in teaching, please visit go.pearson.com/uk/he/resources
Contents
Publisher’s acknowledgements
Preface
Table of cases
Table of statutes
Table of statutory instruments
Table of European and International legislation
Part 1: Introduction: getting started
1 Study skills
Introduction
Starting to study
Good study habits
Writing law assignments
Revision and examination technique
Conclusion
2 The nature of law
Introduction
What is law?
The characteristics of English law
Why do we need law?
The differences between criminal and civil law
Changing the law
Essential legal terms
Chapter summary
Review questions 1
Advanced questions 1
Further reading
Web activity
3 How the law is made
Introduction
European law
Parliament
The courts
The Human Rights Act 1998 (HRA 1998)
Chapter summary
Review questions 2
Advanced questions 2
Take a closer look
Web activity
Assignment 1
4
Resolving legal disputes
Introduction
The court system
Bringing a case in the civil courts
The Woolf reforms 1999
Settlement out of court
Payment into court and offers to settle
Civil litigation procedures
The trial of the case
Executing the judgment
Alternative dispute resolution (ADR)
The tribunal system
Chapter summary
Review questions 3
Advanced questions 3
Web activity
Assignment 2
Part 2: Law of contract, agency and sale of goods
5 The law of contract: Offer and acceptance
Introduction
The essentials of a binding contract
The offer
The acceptance
Chapter summary
Review questions 4
Advanced questions 4
Take a closer look
Web activity
Assignment 3
6 The law of contract: Consideration, intention and privity
Introduction
Consideration
Intention to create legal relations
Privity of contract
Chapter summary
Review questions 5
Advanced questions 5
Take a closer look
Web activity
Assignment 4
7 The terms of the contract at common law
Introduction
Express and implied terms
The relative importance of contractual terms
Exemption clauses: Limitation and exclusion of liability
Chapter summary
Review questions 6
Advanced questions 6
Take a closer look
Further reading
Assignment 5
8 Statutory terms in contracts for sale of goods and services
Introduction
Part 1: Commercial sales contracts
The terms implied by the Sale of Goods Act 1979
Other key statutes which regulate contracts involving goods
Part 2: Consumer sales
An overview of consumer sales protection before the CRA 2015
The Consumer Rights Act 2015
Chapter summary
Review questions 7
Advanced questions 7
Take a closer look
Further reading
Assignment 6
9 Defects in the contract: Misrepresentation, mistake, duress and undue influence
Introduction
Misrepresentation
Mistake
Duress and undue influence
Chapter summary
Review questions 8
Advanced questions 8
Take a closer look
Web activity
Assignment 7
10 The consequences of illegality and incapacity: Illegality and incapacity
Introduction
Illegality
Contractual incapacity
Chapter summary
Review questions 9
Advanced questions 9
Take a closer look
Web activity
Assignment 8
11 Discharge of the contract and remedies for breach
Introduction
Discharge of contracts
Remedies for breach of contract
Chapter summary
Review questions 10
Advanced questions 10
Take a closer look
Web activity
Assignment 9
12 The law of agency
Introduction
The creation of agency
The rights and duties of the agent
The rights and duties of the principal
Termination of agency
Some common types of specialist agents
Chapter summary
Review questions 11
Advanced questions 11
Take a closer look
Web activity
Assignment 10
Part 3: The law of tort
13 The tort of negligence
Introduction
Negligence liability
1 The duty of care
2 Breach of duty
3 Proving consequential loss or damage
Defences in tort
Chapter summary
Review questions 12
Advanced questions 12
Take a closer look
Web activity
Assignment 11
14 Negligence and special duty situations
Introduction
Special duty situations
Chapter summary
Review questions 13
Advanced questions 13
Take a closer look
Web activity
Assignment 12
15 Product liability
Introduction
Liability for defective products
The Consumer Protection Act 1987 (Part I)
Chapter summary
Review questions 14
Advanced questions 14
Take a closer look
Web activity
Assignment 13
16 Occupiers’ liability, nuisance and vicarious liability
Introduction
The occupier’s liability to people on the premises
Duties of an occupier to people outside the premises
Vicarious liability
Chapter summary
Review questions 15
Advanced questions 15
Take a closer look
Web activity
Assignment 14
Part 4: Elements of employment law
17 Rights at work: The contract of employment and health and safety at work
Introduction
The employment contract: a contract of service
The law of tort: employers’ civil liability for industrial injuries
Criminal law regulation of safety in the workplace
Chapter summary
Review questions 16
Advanced questions 16
Take a closer look
Further reading
Web activity
Assignment 15
18 Rights at work: Protection against discrimination in employment
Introduction
The Equality Act 2010: the core provisions
The operation of the Equality Act 2010
Age
Disability
Gender re-assignment
Marriage and civil partnership
Pregnancy and maternity
Race
Religion or belief
Sex
Sexual orientation
Enforcing anti-discrimination legislation
The promotion of equality
The Equality and Human Rights Commission
Chapter summary
Review questions 17
Advanced questions 17
Take a closer look
Further reading
Web activity
Assignment 16
19 Rights at work: Protection against termination of employment by wrongful and unfair dismissal including redundancy
Introduction
Wrongful dismissal
Unfair dismissal
Redundancy
Transfer of undertakings
Claiming at the employment tribunal
Chapter summary
Review questions 18
Advanced questions 18
Take a closer look
Web activity
Assignment 17
Part 5: Introduction to company law
Business organisations
Introduction
Legal personality, incorporation and limited liability
The sole trader
The partnership
The registered company
The impact of the Human Rights Act 1998 (HRA 1998) on business organisations
Conclusion
Chapter summary
Review questions 19
Advanced questions 19
Take a closer look
Web activity
Assignment 18
21 Forming a registered company
Introduction
Promoting the company
Forming the company
Buying a company ‘off the shelf’
Dissolution of the company
Chapter summary
Review questions 20
Advanced questions 20
Take a closer look
Web activity
Assignment 19
22 Running the company: Raising and maintaining capital
Introduction
Share capital
Loan capital
Chapter summary
Review questions 21
Advanced questions 21
Web activity
Assignment 20
23 The management and governance of companies: Functions of directors, secretary and auditors
Introduction
The directors
The company secretary
The auditors of the company
Insider dealing
Chapter summary
Review questions 22
Advanced questions 22
Take a closer look
Web activity
Assignment 21
24 Company meetings, shareholder participation and minority protection
Introduction
General meetings
Protecting the rights of minority shareholders
Chapter summary
Review questions 23
Advanced questions 23
Web activity
Assignment 22
Part 6: General principles of intellectual property law
25 Statutory intellectual property protection:
Copyright, designs, patents and trade marks
Introduction
Statutory regulation of intellectual property
The impact of EU law and international treaties on intellectual property rights
Chapter summary
Review questions 24
Advanced questions 24
Take a closer look
Web activity
Assignment 23
26 Common law protection of intellectual property:
Passing off, malicious falsehood and breach of confidence
Introduction
Passing off
Malicious falsehood
Breach of confidence and protection of privacy
Remedies for passing off, malicious falsehood and breach of confidence
Chapter summary
Review questions 25
Advanced questions 25
Take a closer look
Web activity
Assignment 24
Appendix 1: Additional resources
Appendix 2: Worth thinking about? and Review questions –outline answers
Index
Publisher’s acknowledgements
Text Credits:
28 European Union: Treaty of Nice, Article 203; 38 Incorporated Council of Law Reporting: Royal College of Nursing v DHSS (1981, HL) Lord Diplock; 41 Court of Appeal: Young v Bristol Aeroplane Company (1944); 45 European Convention on Human Rights: ECtHR (Hirst v UK (No. 2) (2005)); 46 High Court of England and Wales: DSD and NBV v Commissioner of Police for the Metropolis (2014, EWHC); 47 European Court of Human Rights: Steel v United Kingdom 28 EHRR 603; 66 The National Archives: Equality Act 2010 Section 144(1); 69 The National Archives: Employment Rights Act 1996; 83 Court of Appeal: Bigg v Boyd Gibbons (1971, CA) Russell LJ; 85 Court of Appeal: Blackpool & Fylde Aero Club v Blackpool Council (1990, CA) Bingham LJ; 87 The National Archives: Sale of Goods Act 1979, s 57; 87 Court of Appeal: Dickinson v Dodds (1876, CA) James LJ; 90 Court of Appeal: Branco v Cobarro (1947, CA); 94 The National Archives: Electronic Commerce (EC Directive) Regulations 2002 Regulation 11; 113 Court of Appeal: Wilson and Another v Burnett (2007, CA) Judge Nelligan; 114 European Court of Human Rights:
Steel v United Kingdom 28 EHRR 603 ; 115 Court of Appeal: Kleinwort Benson v Malaysia Mining Corporation Bhd (1989, CA) MMC Metals Ltd; 117 Law Commission: 1996, the Law Commission (Report No. 242); 130 Court of Appeal: Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha (1962, CA) Diplock LJ; 131 Court of Appeal: Lombard North Central plc v Butterworth (1987, CA) Mustill LJ; 131 Incorporated Council of Law Reporting: Schuler AG v Wickman Machine Tool Sales (1974, HL) Lord Reid; 133 Court of Appeal: Edmund-Davies LJ; 144 The National Archives: Sale of Goods Act 1979 s 2(1); 147 Court of Appeal: Harlingdon & Leinster Enterprises v Christopher Hull Fine Arts (1990, CA); 147 The National Archives: Section 14(2B); 152 Incorporated Council of Law Reporting: J & H Ritchie Ltd v Lloyd Ltd (2007, HL) Lord Brown; 152 The National Archives: The Supply of Goods and Services Act 1982 (SGSA 1982); 156 The National Archives: Section 11 of UCTA 1977; 158–159 Court of Appeal: Watford Electronics v Sanderson (2001, CA) Chadwick LJ; 174 Thomson Reuters Corporation: Gordon v Selico (1986) Goulding J; 175 Incorporated Council of Law Reporting: Edgington v Fitzmaurice (1885) Bowen LJ; 185 Incorporated Council of Law Reporting: Bell v Lever Bros (1932, HL) Lord Atkin; 190 Court of Appeal: Lewis v Averay (1971, CA) Lord Denning MR; 194 Privy Council of the United Kingdom: Pao On v Lau Yiu Long (1979) Lord Scarman; 213 High Court of Justice: Proactive Sports Management Ltd v Wayne Rooney and Others (2010); 217 The National Archives: s 3 of the Sale of Goods Act 1979; 219 LexisNexis: Proform Sports Management Ltd v Pro-Active Sports Management Ltd (2007); 244–245 Incorporated Council of Law Reporting: Transfield Shipping Inc. v Mercator Shipping Inc. (2008, HL); 249 Court of Appeal: Milner and Milner v Carnival plc t/a Cunard (2010); 251 High Court of England and Wales: AzimutBenetti SpA v Healey (2010) per Blair J; 263 High Court of England and Wales: Ramsay v Love (2015) Morgan J; 266 Court of Appeal: Quinn V CC Automotive Group (T/A CARCRAFT) (2010, CA); 274 The National Archives: MCA, s 11; 275 The National Archives: The Factors Act 1889, s 1; 344 House of Lords: Donoghue v Stevenson; 282 House of Lords: Donoghue v Stevenson Lord
Atkin; 284 House of Lords: Donoghue v Stevenson Lord Atkin; 289 Incorporated Council of Law Reporting: Bolam v Friern Hospital Management Committee Lord Justice Denning; 290 The National Archives: The Compensation Act 2006 Section 1; 290 Court of Appeal: Sutton v Syston Rugby Football Club Ltd (2011) Longmore LJ; 290 Court of Appeal: Watt v Hertfordshire County Council (1954 CA) Denning LJ; 295 House of Lords: Lord Hoffmann; 309 Incorporated Council of Law Reporting: Caparo v Dickman (1990, HL) Lord Oliver; 309 Incorporated Council of Law Reporting: Sandhar v Department of Transport (2004) May LJ; 313 The National Archives: Defective Premises Act 1972 (DPA). Section 1(1); 317 House of Lords: Hedley Byrne v Heller (1963), the House of Lords; 323 House of Lords: Rothwell v Chemical & Insulating Co Ltd [2008] AC 281; 329 Court of Appeal: North Glamorgan NHS Trust v Walters (2002, CA) Ward LJ; 330 Court of Appeal: Taylor v A. Novo UK Ltd (2013, CA) Lord Dyson, Master of the Rolls; 330 Law Commission: 1998 a Law Commission Report (No. 249, Liability for Psychiatric Damage); 330–331 House of Lords: Stovin v Wise (1996) Lord Goff; 332 Incorporated Council of Law Reporting: Smith v Littlewoods Organisation (1987, HL) Lord Griffiths; 338 Cambridge University Press: May LJ said in Merret v Bubb (2001); 344 Incorporated Council of Law Reporting: Donoghue v Stevenson (1932, HL) Lord Atkin; 344 House of Lords: Lord Atkin; 351 The National Archives: Consumer Protection Act 1987 Section 2(1); 364 The National Archives: Occupiers’ Liability Act 1957; 364 The National Archives: Occupiers’ Liability Act 1957 s 1(3); 370 The National Archives: The Occupiers Liability Act 1957, Section 2(5); 370 The National Archives: Contract Terms Act 1977, Section 2(3); 375 Court of Appeal: Sturges v Bridgeman (1879) Thesiger J; 383 House of Lords: case of Rylands v Fletcher (1865) Blackburn J; 383 High Court of Justice: RDF Media Group plc v Clements; 384 Incorporated Council of Law Reporting: Read v Lyons (1947) Lord Porter; 402 The National Archives: Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018; 409 Incorporated Council of Law Reporting: Malik v BCCI (1998) Lord Steyn; 409 Incorporated Council of Law Reporting: RDF Media Group plc v
Alan Clements (2007) Livesey QC; 423 The National Archives: Equality Act 2010 Section 13; 424 The National Archives: Equality Act 2010 Section 14; 424 The National Archives: Equality Act 2010 Section 19; 428 The National Archives: Equality Act 2010 Section 13(2); 429 The National Archives: Equality Act 2010 Section 6(1); 431, 432, 440 The National Archives: Equality Act 2010 Section 13(2); 437 The National Archives: Equality Act 2010 Section 9(1); 441 LexisNexis: Grainger plc and Others v Nicholson (2010) Burton J; 444 European Union: G4S’s employee code of behaviour; 454 The National Archives: Equality Act 2010 Section 9; 455 Court of Appeal: English v Thomas Sanderson (2008), Collins LJ; 457 The National Archives: Equality Act 2010 Section 149; 458 The National Archives: Equality Act 2010 Section 153; 466 The National Archives: Employment Rights Act (ERA 1996) s 86; 469 The National Archives: Section 98 of the ERA 1996; 480 HM Courts & Tribunals Service: Holis Metal Industries v GMB (2007) HHJ Ansell; 497–498 The National Archives: Companies Act 2006; 502 Incorporated Council of Law Reporting: Williams and Another v Natural Life Health Foods Ltd and Mistlin (1998, HL) Lord Steyn; 515–516 The National Archives: Section 51 of the CA 2006; 516 The National Archives: Companies Act 2006 ss 9–13; 520 Court of Appeal: Bell Houses v City Wall Properties Ltd (1966 CA); 520 The National Archives: The Companies Act 1985, providing (s 3A); 520 The National Archives: CA 2006 s 31(1); 524 The National Archives: CA 2006, s (41) 2; 533 The National Archives: The Companies Act s 610; 545 The National Archives: Small Business, Enterprise and Employment Act (SBEEA) 2015, s 251; 550 The National Archives: CA 2006 s 170(1); 550 The National Archives: CA 2006 s 172(1); 551 The National Archives: Insolvency Act 1986, Section 174(2); 573 The National Archives: CA 2006 s 308; 573 The National Archives: CA 2006 s 311; 578 The National Archives: CA 2006 s 994; 579 The National Archives: CA 2006 s 996; 587 The National Archives: Designs and Patents Act 1988 (CDPA 1988) s 1; 592 The National Archives: Section 213(2) of the CDPA 1988; 620 Incorporated Council of Law Reporting: A-G v Guardian Newspapers (No. 2) (1990, HL), Lord Keith; 622 The National Archives: House of Lords (Douglas and Another v Hello!
