BH4015 - What is Business Law

Assignment Task

Scenario

Henrietta and her close friend Michael currently run a small, but successful online designer clothes business together, aimed at the young fashion market. Since its start, four years ago, they have never considered the need to introduce any legal documentation regarding their business structure or any individual rights or obligations each will have in the running of the business as they saw no need for such practicalities. However, as a result of their rapid expansion they are now considering incorporating their business through a private limited company, but neither are actually sure of how/whether this will impact upon them and their business.

After attending the local Business Club, last week, Henrietta has also become quite anxious after listening to one of the guest speakers who was talking about the potential legal problems for online businesses (such as theirs) when entering into online contracts with customers. When she mentioned this to Michael, he had no idea what she was talking about but agreed that they needed to find out as much information as possible.

Question

1. Looking at their current and proposed form of business structure, identify and explore, with consistent reference to legislation and case law, the key legal issues you identify that Henrietta and Michael should be aware of, concluding with your reasoned advice as to whether they should remain as they are, or incorporate as a private limited company.

2. Prepare a report for Henrietta and Michael in which you clearly set out the legal duties that they are obliged to follow when concluding online contracts with their customers.

Your report should consider the following points:

• The legal requirements for an online distance contract.
• The information that must be provided to the potential customer prior to the making of the contract.
• The remedies that will be available to the customer in the event that this information is not provided.
• The cancellation period that will apply to the contract and the extent to which the customer could benefit from the cancellation rights.

Your report should include specific reference to the relevant legislation and where possible to illustrative case law.

Further Information

• Who can answer questions about my assessment?
• Questions about the assessment should be directed to the staff member who has set the task/assessment brief. This will usually be the Module Leader. They will be happy to answer any queries you have.
• Staff members can often provide feedback on an assignment plan but cannot review any drafts of your work prior to submission. The only exception to this rule is for Dissertation Supervisors to provide feedback on a draft of your dissertation.

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