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Statutory and Common law applications


  • Unit No: 4
  • Level: Post Graduate/University
  • Pages: 21 / Words 5266
  • Paper Type: Assignment
  • Course Code: BBUN2103
  • Downloads: 658
Question :

There is provided some specified assessments which is mentioned hereunder:

  1. Analyse English legal system and its nature?
  2. Give and explain the outlines of potential impact of law in commercial business practises?
  3. What are appropriate formation and management of company and their business organisations?
  4. Recommend alternative legal solutions for resolution of disputes 
Answer :


Business law is related with the commercial as well as trading activity as undertaken by the company for its business purpose. Under business law, different rules, regulations and provisions are there which has to be complied by every business organisation at the time of undertaking of any commercial business activity. It is associated with the formation as well as incorporation of new business enterprises thereby defining terms and conditions under which new business organisation can be formed. The present report is related to application need of the various UK Laws. It will define brief meaning of all the sources which has become essential part of UK Laws. Also, emphasis will be made regarding the role and procedure of government at the time of making law. Further, explanation related to statutory and common law application in the justice courts will be provided. Report will also differentiate between legislation, regulations and standards along with its impacts on business. It will also examined various laws relating to the company, employment and contract law with its influences on business operations. At last, legal advice and recommendation related to two case study will be provided for making an appropriated conclusion of the same.

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a) Defining sources of UK Law

Parliament has the power to design the concept or principle of the UK constitution which makes the Parliament with the identity of highest legal consultant which can have the right to either create or makes different laws prevailing in UK as well as its member states. Thus, sovereignty in parliament resulting in enacting the legislative body to bring changes in country. Before making any law, a Bill has to be passed to both the Houses such as House of Commons and House of Lords. After that it is required to take the consent of the Royal Assent by which the law is to be implemented or established.

Sources of law are defined as origin of laws, rules as well as regulations which acts as a binding rules and norms for every state (Management Association ed., 2015). It enable any state in making governing rule over its territory. It encompasses of different parts which are as follows:

Customs law: This law mainly runs from the ancient times. As in this law the laws and regulation are carried forward to provide justice to parties. Thus, in such aspects the same laws are running in recent time to get fair decision to parties in respect of opposing to any illegal activity. Thus, in such aspects customs are undertaken in respect of amending the exiting laws so that they can secure more rights and also protect the interest of the citizen in better way.

European Law The European community has become part of the source of UK law since 1973, at the time in which UK became member of the European Economic Community. This laws is mainly imposed in respect of protecting the rights of the citizen of the European people. Further the European Law has some part:

The treaties Is related with the formation of aim which are related with imposing of legal responsibilities on the member states including the Treaty of Rome 1957, the Single European Act 1987, etc. for maintaining equality in employment.

Regulations It helps in bringing uniformity of law throughout community by considering effect on all member states immediately after issued.

Directives Implied for proper management of law among all the member states for making it if similar nature and not having same identity. It lay down objectives which are required to be attain by each member state and implement it in member state by national parliaments.

Decisions It empowers different parties with authorities and power to do some work or restricting or preventing others from performing or doing something.

Parliament Under this source of law, i.e. Direct Legislation and Indirect Legislation (Bacon, 2017). Parliament law is also known as statue laws which is based on written constitution as the judgement are given on the bases of the laws which are already written in the constitution. The direct legislation is related with Acts of Parliament which has been created by passing a Bill through various processes under both the Houses. Indirect legislation is formed as per the directions of a regulatory body. It can be government or a local authority. These regulatory bodies are having power as given by the parliament so as to legislate under an enabling act.

  • The first stage of Bill for becoming act is started with the introduction and first reading in House of Commons and then in House of Lords.
  • The second reading consists of debate and speech by minister proposing the bill. Here, voting is done for getting result. The bill is passed if majority wins.
  • In committee stage of 20 45 members, Bill is inspected and required corrections are suggested.
  • In the third reading, a short debate focusing on core aspects of the Bill are considered.
  • At the last stage, Bill is required to take Royal Assent from the Queen, before it is considered as Law.

Delegated Legislation: They are formed bodies outside the Parliament by taking exercise of all the legislative powers as delegated by the Act of Parliament. The legislations are as follows:-

  • Orders in Council: It defines provisions related to the Emergency Powers Acts 1939 and 1984, which grants power for making law in the national emergency situation to the Privy Council.
  • Statutory Instruments: It provides the Secretary of each member state to formulate rules to protect credit facilities as used by the users. Are basically framed by the government department so as to execute principles of policy set down by Parliament.

Regulations for implementing law from the EU: It provides authority to the ministers and government departments to implement directives, treaties & its related provisions in each member states (Cleaveland, Dutcher and Epps, 2015)

  • Bye Laws – Are formed by local authorities and regulating bodies having statutory powers such as London Underground and Network Rail so as to regulate all facilities as provided by them.
  • Case Law: Also known as Judicial precedent and is built on doctrine of stare decisive. It is related with the jurisdictions of English common law. Judgements passed by judges in crucial cases are recorded and kept as sources of law. In case of no legislation, judges makes decisions as per their own senses related to wrong and right about the case and decide dispute with the help of first principles.

b) Role of Government in process of law making along with application of statutory and common law

The law is to be enacted by the parliament and thus they had power to establish laws in countries. The process of making a law starts with the formulation of the Bill by the ministers and other government bodies who are proposing to bring in such change. The new Law or Act is made with the help of Parliament and its houses. The process of making law starts with:

The public authorities examines the need of the law by reviewing the condition of the society and than accordingly the bill is to be initiated. The Bill is presented before the cabinet ministers who wants to bring in changes in the existing parliament or regulations. The proposal in the draft form is introduces as a Bill in Parliament. It is introduced for the first reading in the House of Commons where all the members takes a look on the bill introduced and then move to the House of Lords (Morley, 2016)In the first reading procedure of Bill is done. Also the date for second reading is set decided in the first reading.

In the second reading, debate along with short speech by minister proposing the bill is given. The main aim of this reading is to seek voting for evaluating the result. If votes are in majority, bill is passed to committee stage where there are 25 - 45 members who are appointed for making cross examination of the Bill clause by clause. Amendments required if any is proposed and Bill then moves to its third stage. In third stage, debate which is having focus on the core points of the Bill is made. All the changes related to grammatical or syntax errors are made in the House of Commons and major changes are done in the House of Lords.

After all the changes and amendments done from both the Houses of Parliament, the Bill finally moves forward for taking the Royal assent of the Queen. This royal assent is considered as very much essential part of the formulation of Law. Thus, after obtaining the approval from the royal assent, Bill is considered as Legislation.

Application of Statutory and Common Law

Statutory Law Also called as Legislation or the Statues which is basically a law as passed by the legislature. A body of law which is a part of the statutes formed. These laws are in the written form i.e. statutory laws are written laws which can be easily accessible for the purpose of references in any of the case or subject matter. Such law are created deliberately by the government with the help of elected legislators and along with the legislative procedure (Allen and Blackham, 2018). Judiciary is having the option to either interpret or makes enforcement of the statutory law. In this the judgement is given on the bases of laws written in the constitution and the judges are bound to follow such condition. In this the case such as Lee V Lee air farming 1960 which is mentioned under the companies Act. As in this case study the matter is related to concerning the corporate veil and separate legal entity. In this the judgement is given on the bases of cases written in the constitution.

Common Law It is formed by the judiciary over the time phase and as per the requirement of the new legislation in the member state. Common Laws are also known as Case Laws which are not passed by any of the legislative body but are framed by the judiciary on its own. Whatever judicial decisions are passed by the Judges of the courts and tribunals in respect of the important cases are recorded for the future and further use of them as a basis or principles of law in making decision of the relative subject matter. The cases which is determined as Industry V Bottrill. 1999. This case rounds around the sole trader company engages business at large scale. The matters is mainly discussed in respective of lifting the corporate veil and the definition of the term employee.

c) Impact of company, employment, and contract law on the business

Company Law: It is also known as Business law which governs or regulates all the business operations and working of a company or a regarding the role of government business enterprises. The company had to work according to the given norms mentioned under the companies act, 2006. The aim of company law is to provide regulations and provisions for maintaining and controlling rights, relationship, manner of conducting of business activity of a particular employee, firm or an organisation. With the help of company's law, a company can be formed, funded, managed smoothly. A company is defined as an artificial person under the eyes of law thus having separate legal identity which remains in existence even after members death or insolvency. Its existence comes to an end only after dissolving it in legal sense (Hopton, 2016). Any change or amendment in the company's law has to be followed by businesses so as to ensure proper compliance of it. The major impact arises in case of business activities which is related to government norms regarding dealing with other business. As sometimes to deal with other company resulting in bounding various norms which restrict the company to deal for longer time period. For example Salomon Vs A Salomon & Co Ltd. In this case the company is separate legal person as a result it is not having direct relationship between the shareholders and third parties dealing with the company.

Employment Law: It is related with the rules, regulations and provisions which binds and regulates the relationship of the employee with the employer among a business enterprises. Under the employment law, all the terms and conditions related to the process of hiring, recruiting, selecting and employing are defined which has to be followed and taken into consideration. Thus, various terms and agreement are mentioned under the employment and labour law, 2016. The employer duty is to provide proper and healthy working conditions to all its business employees. Fair and equitable treatment should be provided to all employees and workers for better growth and development of both the business and employees as well. The impact of employment law arises in case of strict polices which bound employment to carry it during attaining the work. But it results in bringing less retention of employees in work premises. This results in causing impact in respect of increasing productivity and stability of companies in market. For Example In Pimlico Plumbers Ltd. and A Smith Case, court ordered that Pimlico has to consider Mr Smith as its employee under the employment act. Also, he should be provided with all the treatment and facilities which other employees are receiving under the Equality Act. Thus, he can make use of sick leaves, paid annual leave etc.

Contract Law: It is associated with the agreement, contract which is entered between one or more party having common objective or thought process. Thus, both the parties are bound to follow the terms and condition mentioned under the Contract law, 1919. The agreement entered is enforceable by law for making it legally binding on parties entering into the contract. It is very much essential on part of the party to become competent as well as capable of entering into the contract. The impact of contract law is that it bring fraud in contract and also affects parties loyalty by dealing in some common matters. For example - In the case of Carlill v Carbolic Smoke Balls Co, there was English contract law decision as given by the court of appeal. The case was related to an advertisement which contains specific terms and conditions for achieving rewards on completion of the specified task. It was a unilateral binding offer which has been made by the company for giving reward to that person who voluntary accept the offer and perform it properly and correctly. The company was liable to completing promise as made under the contract and is thus liable to give reward as announced to person who accept and perform the contract.

Differentiating between legislation, regulations and standards and its impact upon business

In every organisation, it has its own standards according to which it performs. Also there are some legislation and regulations which has to be abide by company for its smooth working.

  • Legislation The term Legislation is basically a law or enactment which has been made by the particular governing as well as statutory body which have been assigned power to formulate such law as and when required (Nsubuga, 2019). Legislation is used before becoming a law or an Act of Parliament is known as bill, which is required to obtain Royal assent from the Queen after it passes. It has regulating power which confines business operations as per the act made and impact its working.
  • Regulations – Are known as orders, rules, provisions having power as well as authority to make bind functions of any business firms and company. These regulations are defined by authority having powers to do so in relation with the business activities and operations of a company. If a company performs beyond its prescribed boundary then penalties will be charge for violation of such act, which impacts the image of business as well.
  • Standards - Standards are known as set defined quality norms and levels which the company should adopt for better working and performance. It helps in making improvement in its business performance and profitability level as well. By adopting best and quality standards as used by other competitive firms, opportunities can be turned into advantages.


Types of organisation with its management, funding function

A Business is an entity generally formed with the main aim of carrying on any commercial or trade activities. Motive behind conducting of such business activities is related with providing of own goods and services to its customers for fulfilling their demands, needs and thus making them satisfied. Along with customer satisfaction, company also aims at profit maximization and better performance. The types of business are described below:-

Sole trader - A business which is solely owned, formed as well as managed by the single person known as the Sole trader. This person runs its business operations with its own skills, beliefs, thoughts and experiences (Villiers, 2015). Also, the decision making power rest wholly with the sole trader. Every business operation is directed, controlled as well as planned by the sole trader without considering interferences of others. All the profit earned and losses incur are of the sole trader. Further, he becomes personally liable for all the business liabilities and losses arises on part of business.



  • Sole trader enjoys the benefit of full control over the business and its related decision-making process.
  • All the revenue earned and loss incur in relation with the sole trader business operations are remain with the owner wholly.
  • Is considered one of the easiest form of business organisation to operate and manage as it has only one director.
  • Sole trader has burden of personally liable for all the business liabilities as no there is separate legal entity provision applicable.
  • When it comes to business expansion, sole trader faces difficultly in making arrangement and raising of fund from own and thus impact business operations and growth.

1. Partnership - A business agreement or contract between partners having similar objectives and ideas. All the partners comes together for carrying on such business thereby sharing all the profits, losses of the company in the ratio each partner contributes its capital or as decided by them. Also, liabilities of the partnership business are equally bear by all the partners.



  • Easy to form without making compliance of all the legal formalities. An agreement can be entered by all the partners in either written or oral form (Hansmann and Kraakman, 2017).
  • This business has combination of different skills, experiences and expertise which can be used for better growth and business expansion.
  • Such business has wide source of capital which benefits operations in short as well as long term.
  • Lack of harmony among partners can affect the management and administration function of the business.
  • Partners after retirement remain liable for all the acts which had been by him as a partner.

2. Limited Liability Company A private company in which the owners are held personally as well legally liable for the debts up to the extent to which these owners has made a contribution in the capital amount.



  • In this form of business organisation, there is no restriction on the number of members.
  • One of the advantage of this business type is that it limits the liability of all its members up to the extent to which they had contributed to the capital amount.
  • Tax benefit is also provided to such business type.
  • Limited liability companies are having separate entity Independent from its members and directors who have formed it.
  • On departing by the members, the limited liability companies adapts the perpetual succession.
  • Formation of limited liability company is considered as one of the most expensive business formation as compared to partnership or sole proprietorship businesses.
  • The existences of risk is also high.

Management and funding process of above business organisation are as follows:




1. Sole Proprietorship

In this business type, all the administrative as well as controlling rights rest with the single person i.e. the owner of business.

All the activities and operations carries by business, are under the direction and control of sole proprietor itself.

Sole traders has to arrange their business capital on their own. Savings and personal financial assistance can be helpful in business type for funding its business operations.

2. Partnership

All the partners have equal right on the managerial function of business. Mutual decision are made by considering every partners point of view (Erickson, 2018).

In such business type, partner contribute from their own pockets or seeks financial assistance from relatives, bank loan for fulfilling business financial needs.

3. Limited Liability Company

Limited liability companies are managed by its owners, directors and key managerial personnel having competent authority to do so.

With the help of financial institution, company can arrange for capital needs, loan from relatives etc.

CASE STUDY Legal Advice

Case Study 1

Champion Ltd. acompany receives cash payment for moving its business operations so that development of new stadium can be done by a premier league club. This shifting results in financial issues such as default made by company in making repayment of bank loan and creditor's amount because of decline in customer base. Such case depicts that Champion's Ltd has become insolvent and incapable in repaying all its dues and liabilities for which creditors threaten company to apply for winding up petition.

Winding up is defined as a process of legal proceeding in which dissolution of company takes place. By dissolving company, it sells all its business assets and whatever the amount is realised is used for making repayment of all the dues and liabilities of the company. Champion Ltd has to undergo Compulsory winding up procedure because of default made by company in making payment of loan and creditor's amount (Conley, 2016). Process of winding up start by making appointment of Liquidator for making proper realization of Champion's assets for paying debt and distributing surplus remaining as per courts order. In respective of compulsory winding up,court orders company for winding up of business if they are not continuing their business for longer time period. In this their assets and liabilities are realised and distributed to creditors and the whole procedure is to be undertaken by the liquidators.

All the powers of directors ceases on appointment of Liquidator. Also, company can't conduct its business operations unless it is beneficial for winding up of company. After 7 days of appointment, copy of compulsory winding up is send to Registrar thereby serving a notice of being wound up to the Champion Ltd. After realization of assets by Liquidator, court appoints Commissioner of Court for verification of accounts as well as distribution of funds. Meeting of creditors will cross examine all financials and decide preferences as well as date for distribution of assets. Any dispute related to claiming will be resolved by Court.

Case Study 2

Mr Anderson CEO of Amber Ltd accepts the offer made by competitor firm Beta Ltd by just giving notice of short tenure period which is breach of employment terms and conditions as specified in the Amber Ltd employment law.

As Mr Anderson is having access to all the credential information of the company, it can be one of the threat for Amber Ltd and can become strength for Beta Ltd. As per the employment contract of Mr Anderson in Amber Ltd, it is specified that 12 months notice had to be given for terminating the contract, which is not fulfilled by Mr Anderson and by breaching it he joins the post of CEO of Beta Ltd. It is considered as Breach of contract, for which Amber Ltd can sue Mr. Anderson and makes him liable for completion of all the terms as specified under employment contract or can prevent Mr Anderson from rendering official services to Beta Ltd by seeking an injunction over it. Also, Amber Ltd can sue for making breach of duty of good faith, trust, fidelity and confidence. It is the duty of all key members and employees to make decision by keeping in mind its impact on business as well, which is not done by the CEO (Lynk, 2015). All the actions and decisions made are not in the best interest of company which is to be in good manner as per the duty of fidelity. Further by sharing highly credential and important information of Amber Ltd business, it is making default on part of breach of duty of trust and confidence which can result in business loss to Amber Ltd. Thus, with the help of legal proceeding or arbitration settlement can be done in such case. In this arbitrators is appointed to settle the disputes out of court and both the parties are bound to follow the judgement and decision given by the arbitrators. By choosing the arbitration methods it gets the judgement on speedy bases and also save time. But the disadvantage is that the decision is bound on both the parties and parties cannot reach to court once the decision is given by arbitrators.

Case Study 3

By analysing the case, Mr. Rodgers was key personnel of Sunrise Brokers which establish Sunrise's precious metal trading desk in month of October 2011. For entering new employment agreement, termination of 12 month notice has to be done after September 2014 which is restricted as per post termination contract. Mr. Rodgers signed contract with competitor of Sunrise commencing on 1 January 2015. Information related to resignation has been given to the company by Mr. Rodgers on 27 March 2014 without providing full information related to new job offer.

Sunrise stated Mr Rodgers that no notice can be given before September 2014 & resignation given if any will be breach of contract. Thus he was told to return to work. On this he took period of annual leave after which he failed to return as a result Sunrise did not paid salary to him (Hodges, 2018). A declaration about Mr. Rodgers being still an employee is given with sanction related to preventing being working for competitor firm.

Thus, in this case the High Court declared that Company can refuse to give salary and ask for resign to staff in case there is any breach of contract. So, the result of which Mr. Rodgers remains employee and is thus restricted under employment contract.

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It can be summarised that company while performing any business operations either of commercial or trading nature has to adhere to applicable business law. Compliance has to be made of rules, regulations and provisions for better working and functioning of the company. The report has defined that for becoming an Act of Parliament, a Bill is required to be passed as well as approved from both houses along with that Royal assent needed. Also, it has stated that different standards and regulations have to be followed by business firms for remaining competitive in the market place. Statutory and common law are both related to Justice court where these are used for making appropriate conclusive judicial decision of the subject matter of the case. Both the case study has been provided with appropriate legal advice so that conclusion can be derived in best manner.


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