Executive Summary

In this report, Bradd and Angeline are business partners in a catering firm that
are thinking of becoming a private limited company because of Bradd's wealth.
Meanwhile, Brigitte, a regular customer of Farmy Bus Company, sustained a loss when
her suitcase containing a laptop. And then concepts from contract law, such as
warranties, conditions, representations, and innominate terms are mentioned with
similar cases. In a different scenario, partners John and Peter in a profitable
restaurant business, worry about having joint debt responsibility and unrestricted
liability, so they are thinking of forming a private limited company. Additional
concerns are brought up by Peter's suggestion to serve fugu, a dish that may be
harmful.

Introduction
Business law is a set of legislation that governs the creation, conduct, and
administration of businesses and organizations. All business-related matters,
including as contracts, limited liability, commercial law, employee rights, state
laws, business decisions, transactions, debts, and other legal duties, should
preferably be managed by a qualified business lawyer. A corporate entity is subject
to all applicable local, state, and federal laws. The application of business law
is multifaceted. It provides fairness in business dealings between rival firms,
protects individual rights, sets norms for proper conduct, and promotes economic
stability by guaranteeing legal certainty.

Section A
Q.1(A).
In this case, Bradd and Angeline own a catering firm together, but Bradd has been
counselled to form a private limited company instead. A partnership can never exist
apart from its members. Personal possessions of the spouse are not safeguarded. If
a partner's personal property is unprotected, it means that the partners are not
limited liability protected by the corporate structure. Typically, each member in a
partnership is accountable for the obligations and liabilities of the business.
(Pretto, 2001). Each partner has liability both jointly and severally. Then,
Limited liability is allowed for the owners of private limited companies. This case
is referenced by
(Salomon v. Salomon , 1897), Salomon owned a shoe company. Then, he established a
business in which he and his relatives were stockholders. Salomon received a
substantial payout from the corporation, which was made up of a demand over the
assets of the company and shares. Then, the business was wound up as it was not
able to pay all of its creditors. Salomon was a creditor with better position than
the others as he was in command of the company's assets. Other creditors argued
that since Salomon had the bulk of the company's shares, he could not be considered
to have contributed anything to the business. According to Court, despite being the
Company's largest shareholder and controller, Salomon was separate from the
business. Then, the amount due on the shares that the shareholders have purchased
is the maximum amount of liability. The shareholders do not own the company's
assets; hence they are not allowed to use the "Company Property" as personal
property.
(B)
If company is incorporated as a private limited company, Bradd may benefit more
from it. A partnership lacks restricted liability, in contrast to a private
corporation, which protects the owners' assets. If one partner in a partnership is
unable to pay a creditor, the other will be held accountable. “For example, the
owner of a timber estate sold all the wood to a company that Macaura owned almost
completely. He bought fire insurance for the timber but under his own name. The
insurance company rejected the claim after the fire destroyed the timber. The Court
states that in order to be allowed to buy insurance on property, one must have a
legal or equitable risk in it. The allegation was rejected. ( Macaura v Northern
Assurance , 1925).

Q.2
In Brigitte's case, the issue is responsible for the loss of her suitcase which
contained a $800 laptop with the Farmy Bus Company is at hand. She received a slip
of paper that stated that the business has limited liability for lost or damaged
items to $100 or the price of the by-product, which is smaller. As per the
agreements stated, the company's obligation is bounded to $100, which is the lower
of each of the amounts, as Brigitte's laptop is valued at $800. However, Brigitte's
loss was caused by the Falmy Bus Company's negligence. According to ( Chapelton v.
Barry UDC , 1940 ) case, there was no exclusion clause in the contract. A proper
individual wouldn't expect the ticket to contain the terms of the contract and
might prefer to see it as a regular receipt. Furthermore, the notice's content
suggested that It's possible for someone to take the deck seat right away and buy a
ticket later. Accepting the offer stated in the notice would entail taking a seat.
Once the contract was formed, the council would not be able to add additional
section. In Brigitte’s case, she didn’t see a slip of paper above the luggage
office counter. Courts require that a contract must have a clause of this kind.
(Olley v. Marlborough Court Ltd, 1949) was another similar case and emphasized the
fairness. Olley was a visitor of the accused hotel in this particular case. When
Olley arrived, she paid for a week's board in advance and settled into her room.
There was a sign in the room warning that the owners would not be responsible for
anything lost or stolen unless they were given the belongings to keep safe. Olley
checked out of the bedroom, leaving the keys on the board in the hotel lobby before
leaving. Together with the key, several items were taken from her room. Olley made
damages claim due to negligence. The court determined that Olley was successful in
her suit and was awarded full compensation for the stolen goods. The exclusion
clause had not been successfully incorporated into the agreement because the
contract was signed at reception and the notice purporting to exclude liability was
not visible until after the contract was completed, when the guest entered the
bedroom. (Lawteacher.net, 2021).
In Brigitte case, she frequently takes buses, she is bound by previous
transactions. In order to determine if the violation has been covered clearly and
obviously courts will apply construction rules.
Moreover, Section 11 of the (Unfair Contract Terms Act, 1977) addresses the
reasonableness of clauses in contracts that limit or eliminate liability for breach
of contract. In Brigitte's case, a notice above the luggage office counter and the
slip of paper she was given both have a clause restricting Liability of the Farmy
Bus Company for loss or damage to the items is limited to $100 or the item's worth,
whichever is less. However, under “Section 11 of the Unfair Contract Terms Act
(1977)”, this term's validity is contingent upon its reasonableness.
In conclusion, the specifics of the contract, among other things, will determine
whether or not this clause is reasonable and enforceable. Brigitte may contend that
the liability restriction term is unreasonable and unfair. She could contend that
there is a significant difference between the worth of her laptop and the liability
limit and that she was not given sufficient opportunity to negotiate the terms of
the contract. With a significant difference between her laptop's worth and
company's responsibility limit, she may have a legitimate chance of winning in
court.

Q.3
The nature of terms is one of promise. When parties begin contract negotiations,
they will decide how to categorize each term, which includes conditions,
warranties, and innominate terms. The question that the courts consider when making
their decision is whether the statement is outside the contract or if it is a part
of the contract, making it legally obligatory. If they possess a promissory
quality, then they qualify as terms of the contract and are legally binding.
"Representations" are the terms used to describe them. A representation is a
factual statement given by one party to the other either before or during the
negotiating phase of a contract. In order to give information, explain specifics
about the subject matter, or persuade the other party to sign the contract,
representations are utilized. Terms are further defined as warranties and
conditions. Conditions are basic terms that form the basis of the contract.
"Condition" refers to a crucial clause in a contract, and "warranties" refer to the
remaining terms. The victim may end a contract if a condition is broken; he cannot
do so if a warranty is broken. The victim could sue the contract violator for
damages in both scenarios. It may not always be possible to tell whether a clause
in a contract is a condition or a warranty. For instance, would it be significant
enough for the buyer to be entitled to end the contract if the seller of an
automobile car without a seatbelt? The phrase would probably be regarded as
"innominate" in this situation, and the courts would consider the impact of the
violation in determining the party's entitlement. The buyer may end the contract if
the breach fundamentally alters the terms of the agreement or produces a completely
different outcome from what was originally intended (Tabaujan, et al., 2015).
Although warranties are often viewed as essential components of contracts and
agreements, their importance and effect on the agreement as whole may determine
whether they are classified as minor or less significant provisions. If minor
warranty is breached, there couldn’t be significant remedies or damages available.
For example, in the landmark case of (Bettini v Gye , 1876), shows how difficult it
is for courts to decide whether a term is a condition, that could allow the wronged
party to end the agreement, or a warranty, which would only result in the ability
to pursue damages, when the term is not expressly designated by statute. They
consider if the word is important and directly affects the agreement's main goal,
or if it is only somewhat important. Major distinction between conditions and
warranties is established by this assessment of the term's importance, which also
affects the legal consequences of a breach of either. (Gandhi, 2023). And another
similar case (Couchman v. Hill, 1947), In this case, Couchman, the buyer, purchased
a pregnant cow from Hill, the seller, who made it clear that the animal was a
heifer who had not yet given birth to a calf. The buyer filed a lawsuit for breach
of contract after the cow passed away from pregnancy-related issues. As to the
Court of Appeal's decision, the seller was found to be accountable for the breach
of the contract. In this instance, it was decided that the seller was liable for
breach of contract as the description was crucial to determining the subject matter
of the agreement. Although a warranty breach simply results in damages, a
conditional breach allows both discharge and damages (Notes, 2024). The
consequences of breaching an innominate term vary according how significant the
breach is. If a breach affects the substance of the agreement, the innocent party
may be allowed to terminate it and claim damages.

Section B
1(A)
A partnership is a type of business arrangement where John and Peter share the
company's assets, obligations, and revenues. Partnership is created when two people
agree to carry on business with the intention to make profit. ‘Section 1(1) of the
Partnership Act (Cap 391)’ defines "the relationship that exists between people who
share a business enterprise with the intention of making money". General
partnerships and limited liability partnerships are most popular forms of
partnerships. The most common type of partner is a general partner, who actively
directs and controls the business's operations. minimal partners have minimal
legal obligations. This type of partner is not capable of managing the business or
exercising control over it. Each partner in a democratic arrangement has the
authority to act on behalf of the other partners. There are extensive consequences.
Any one of the firm's members could behave in a way that bound them all. There is a
contract in place between parties. The fact that creditors can settle claims
against all or any partner makes this worse. Partners may provide capital, labor,
skills, knowledge, and abilities to the business. They could be subject to
perpetual legal liability for the actions of the partnership and its participants.
It is possible to establish a partnership by implicit agreements that are formed
from the actions, written communications, verbal exchanges, and conduct of the
parties. (Chandran, 2009). A partnership agreement is a formal agreement between
partners. Each spouse has agreed upon the rights and responsibilities. In
partnership, profit sharing by itself does not establish a partnership; it is
sufficient evidence of one. By reason of their contractual obligations, partners
behave as the partnership's agents. There are similarities between this kind of
business and a joint venture. In a joint venture, two organizations, typically
corporations, collaborate on business endeavors with the potential for profit
sharing. (Lip, 2024). And then, partners in a general partnership, like John and
Peter's, are subject to limitless liability from creditors. Even if the company's
assets are insufficient to pay out debts, the partners will still be held
personally responsible for them. The duties under the contract of the company to
external parties are shared equally by the partners. If the outcome of an agreement
results in the rights of other parties with the firm, individual will bring a joint
action against all of the partners. Eventually forfeits its right to later sue any
partner which leaves out. Under the law of tort, the partners are equally and
severally liable to the third party for negligence. Within limitation period of
limitations, the outsider may file one or more lawsuits against them in succession,
jointly or severally, or until the entire claim is satisfied (Chandran, 2009).
In the case of Peter's proposal to serve fugu, both John and Peter might be held
personally accountable for any losses or legal claims made against the partnership
if the company were to be subject to legal action or liabilities as a result of the
dish's faulty preparation endangering customers. If John and Peter made a wise
choice in incorporating a private limited company, considering the possible risks
and obligations connected with their current partnership structure. By
incorporating, individuals can take the advantages of becoming a distinct legal
entity and restrict their personal liability to the amount of their investment in
the business.

(B)
For John and Peter to incorporate their firm as a private limited company,
particularly in considering John's concern about his wealth and the possible risks
of serving fugu in the future. Therefore, corporation develops a distinct entity.
In legal terms, a private limited company is different from its owners or
shareholders. Due to its legal separation, the business is still able to sign
contracts, possess property, and take on debt under its own name. John and Peter's
private property is still safeguarded by this agreement. For example, during
Salomon Ltd.'s liquidation, a few unsecured creditors made requests that were the
subject of the complaint. Salomon was the largest shareholder in the company and as
such, he was required to take personal responsibility for the company's debt.
Salomon's incorporation of the business against the actual object of the Companies
Act of 1862 and the company's functioning as Salomon's agent, for which Salomon
ought to shoulder the debt incurred during that agency, were among the reasons
given by the Court of Appeal for declaring the company to be a fraud. (Salomon v.
Salomon, 1897). A director's or shareholder's responsibility is limited by the
Pte.Ltd (private company ltd). A private limited company's shareholders are not
held personally responsible for the debts, liabilities, or obligations of the
business. A private limited company's directors are in charge of running the
business and making choices that are best for it. Then Serving fugu, can be harmful
if improperly prepared, poses a liability risk for them. In contrary to a private
limited company, where the owners' resources are safeguarded, a partnership does
not have limited liability. Increased personal liability comes when the business
continues as a partnership. It is probable that John would gain more from the
company's registration as a private limited company. If one of the partners in a
partnership was unable to pay a debt, John would be in risk. John and Peter may
successfully reduce the risks connected with unrestricted liability and take
advantage of the many advantages that come with this corporate structure by
converting their company into a private limited company. They can concentrate on
expanding their company without being unduly exposed to potential liabilities
because it gives them piece of mind that their personal assets are safeguarded.

Conclusion
To sum up, decision-making that is well-informed and driven by both legal knowledge
and strategic vision is critical to successfully managing the intricacies of
corporate ownership and contractual arrangements. In considering Bradd, Angeline,
John, and Peter's situation, forming a private limited company seems like a
sensible course of action. It provides a structured legal framework for growth and
expansion while abiding by regulatory norms, protecting personal assets from
company liabilities. Consequently, converting to a private limited corporation is a
wise move to protect one's personal assets and business ventures.