IB2C10 Fundamentals of Business Law
Lecture notes
Lecturer: Rob Poole
Warwick Business School, 2021
Carlo Dalle Mule
Sections:
1. The English Legal System
2. Contract Law
3. Business Organisations and Agency Law
Why we need a legal system in business:
- Business confidence
- Business protection
Types of legal systems around the world:
1. Civil law system:
Based on Roman Law. Law is made by law-making bodies and not by courts. They are often
codified.
2. Common law system:
Case decisions by judges are of central importance. Law is created by deciding cases. Subsequent
cases must follow precedent cases.
3. Mixed law system:
Where two or more legal systems operate side by side. They may include common law, civil law
and religious rules.
1
,1. THE ENGLISH LEGAL SYSTEM
1.1 Classification: how the law is classified
1.2 Administration: courts and institutions that deal with legal disputes
1.3 Sources: How law is created
1.4 Legal Personnel: the legal profession that advises and assists in resolving legal disputes
1.1 Classification of the law:
The law is divided between:
- Criminal law: Murder, rape, theft, - Civil law: Contract law,
deception, driving offences, etc. discrimination law, property law,
family law, tort law, wills, etc.
Criminal law:
It is an offence against society, may be punished to protect the public. A defendant is prosecuted
by the Crown Prosecution Service, cases are cited as R for rex/regina. If crown does not prosecute
individuals can bring a private prosecution.
Criminal trials:
- Magistrates’ court: for summary offences which result in summons or single justice
procedure notice. Trial by bench of Magistrates/Justices of the Peace
- Crown court: for indictable offences which result in indictment. Trial by judge and jury
Characteristics of trial in magistrates’ court or crown court:
- Presumption of innocence – burden of proof is on the prosecution
- Standard of proof – beyond reasonable doubt
Defendant is found guilty or not guilty
If found guilty, the defendant is punished/treated:
- Prison - Treatment
- Fine - Criminal Record
- Community Order - Anti-social Behaviour Order
Costs: Legal aid available to defendant (for free if needed) but if defendant has money, the legal
fees are upon him.
Civil Law:
It involves disputes between individuals/businesses rather than offences against society. The
claimant (plaintiff) sues the defendant. The objective is compensation and not punishment.
Civil Trials:
- County court: minor disputes and serious disputes for breach of contract up to £100’000
- High court: substantial disputes such as serious road accidents and major contracts
Characteristics of trial in county court and high court:
- The burden of proof is on the claimant. The claimant must prove that defendant committed
a wrongful act.
2
, - Standard of proof is “on a balance of probabilities”, which means more likely than not.
Defendant is found liable or not liable
If found liable the claimant is awarded a remedy:
- Damages (money)
- Injunction (court preventing someone from doing something
- Specific performance
Costs: In small claims (<£10’000) costs are generally non-recoverable but one has to fund claims
with own funds. Legal aid is only available to the very needy, generally parties have to fund their
own case. The loser will usually be required to pay the other party’s costs. This is a big deterrent for
civil court cases.
Criminal and civil law are different but there can be overlaps. For example, in speeding, defendant
might be prosecuted for speeding as well as sued for negligence.
Section 11 of Civil Evidence Act 1986:
- The normal rule of evidence is that a court must not be informed of previous criminal
history.
- However, section 11 says that where a criminal and civil law are committed at the same
time, the civil court can be informed that the defendant has been convicted of a crime. But
no other criminal offence.
1.2 Administration of the law:
Each court has a particular type of jurisdiction:
3
, Jurisdiction is either:
- Original jurisdiction: for first instance
- Appellate jurisdiction: for appeal
Magistrate Courts:
Trials are heard by Justices of the Peace/magistrates who are unqualified and sit in a bench of
three and a court clerk who is legally qualified advised the magistrates on the law
Jurisdiction:
- Summary offences: summons sent by post to defendant. Most of all crime is tried in the
Magistrate courts. Max penalty is 12 months but fine is unlimited.
- Hybrid offences: can be trialled in M.C. or C.C. such as theft, indecent assault, possession
of drugs etc. Most defendants choose the magistrates’ court.
Indictable offences that will be tried in the Crown Court are first tried in the magistrates’ court for a
procedural hearing where the defendant is given a formal statement of the offences they are
charged with and where administrative issues are dealt with.
Magistrates’ court also has some civil jurisdiction deals with licensing for selling alcohol and
payment of council tax and tv licence
Youth Courts:
They are part of the magistrates’ court. For offenders <18 years of age. No public is allowed. Is
much more informal than a normal court.
Crown Courts:
Country is divided into 7 main regions, there being a court for every main region. Trials are heard
by a mixture of High Court judges, Circuit Judges and Recorders depending on the seriousness of
the offence.
Indictable offences are tried (or sentenced if defendant pleads guilty):
1. An indictment is prepared detailing the offences that the defendant is charged with
2. The case is tried by a judge and a jury
3. The judge directs the jury on the law
4. The jury makes the decision
5. If the defendant is found guilty the judge passes the sentence
Crown Courts also sentence cases referred from the Magistrates’ Court, when the MS decides that
the case need an unlimited sentencing power, because the case is more serious than initially
thought.
Appeals in the Crown Courts:
CC can also hear appeals from Magistrates’ Courts or Youth Courts, which can be against sentence
or conviction
The County Courts:
Originally established in 1846, they trial civil law cases. Since 2014, there is one centrally organised
County Court. Cases are heard at hearing centres all over the country. Financial limits were raised
in 2014, now most of civil trials are heard at County Courts.
4
Lecture notes
Lecturer: Rob Poole
Warwick Business School, 2021
Carlo Dalle Mule
Sections:
1. The English Legal System
2. Contract Law
3. Business Organisations and Agency Law
Why we need a legal system in business:
- Business confidence
- Business protection
Types of legal systems around the world:
1. Civil law system:
Based on Roman Law. Law is made by law-making bodies and not by courts. They are often
codified.
2. Common law system:
Case decisions by judges are of central importance. Law is created by deciding cases. Subsequent
cases must follow precedent cases.
3. Mixed law system:
Where two or more legal systems operate side by side. They may include common law, civil law
and religious rules.
1
,1. THE ENGLISH LEGAL SYSTEM
1.1 Classification: how the law is classified
1.2 Administration: courts and institutions that deal with legal disputes
1.3 Sources: How law is created
1.4 Legal Personnel: the legal profession that advises and assists in resolving legal disputes
1.1 Classification of the law:
The law is divided between:
- Criminal law: Murder, rape, theft, - Civil law: Contract law,
deception, driving offences, etc. discrimination law, property law,
family law, tort law, wills, etc.
Criminal law:
It is an offence against society, may be punished to protect the public. A defendant is prosecuted
by the Crown Prosecution Service, cases are cited as R for rex/regina. If crown does not prosecute
individuals can bring a private prosecution.
Criminal trials:
- Magistrates’ court: for summary offences which result in summons or single justice
procedure notice. Trial by bench of Magistrates/Justices of the Peace
- Crown court: for indictable offences which result in indictment. Trial by judge and jury
Characteristics of trial in magistrates’ court or crown court:
- Presumption of innocence – burden of proof is on the prosecution
- Standard of proof – beyond reasonable doubt
Defendant is found guilty or not guilty
If found guilty, the defendant is punished/treated:
- Prison - Treatment
- Fine - Criminal Record
- Community Order - Anti-social Behaviour Order
Costs: Legal aid available to defendant (for free if needed) but if defendant has money, the legal
fees are upon him.
Civil Law:
It involves disputes between individuals/businesses rather than offences against society. The
claimant (plaintiff) sues the defendant. The objective is compensation and not punishment.
Civil Trials:
- County court: minor disputes and serious disputes for breach of contract up to £100’000
- High court: substantial disputes such as serious road accidents and major contracts
Characteristics of trial in county court and high court:
- The burden of proof is on the claimant. The claimant must prove that defendant committed
a wrongful act.
2
, - Standard of proof is “on a balance of probabilities”, which means more likely than not.
Defendant is found liable or not liable
If found liable the claimant is awarded a remedy:
- Damages (money)
- Injunction (court preventing someone from doing something
- Specific performance
Costs: In small claims (<£10’000) costs are generally non-recoverable but one has to fund claims
with own funds. Legal aid is only available to the very needy, generally parties have to fund their
own case. The loser will usually be required to pay the other party’s costs. This is a big deterrent for
civil court cases.
Criminal and civil law are different but there can be overlaps. For example, in speeding, defendant
might be prosecuted for speeding as well as sued for negligence.
Section 11 of Civil Evidence Act 1986:
- The normal rule of evidence is that a court must not be informed of previous criminal
history.
- However, section 11 says that where a criminal and civil law are committed at the same
time, the civil court can be informed that the defendant has been convicted of a crime. But
no other criminal offence.
1.2 Administration of the law:
Each court has a particular type of jurisdiction:
3
, Jurisdiction is either:
- Original jurisdiction: for first instance
- Appellate jurisdiction: for appeal
Magistrate Courts:
Trials are heard by Justices of the Peace/magistrates who are unqualified and sit in a bench of
three and a court clerk who is legally qualified advised the magistrates on the law
Jurisdiction:
- Summary offences: summons sent by post to defendant. Most of all crime is tried in the
Magistrate courts. Max penalty is 12 months but fine is unlimited.
- Hybrid offences: can be trialled in M.C. or C.C. such as theft, indecent assault, possession
of drugs etc. Most defendants choose the magistrates’ court.
Indictable offences that will be tried in the Crown Court are first tried in the magistrates’ court for a
procedural hearing where the defendant is given a formal statement of the offences they are
charged with and where administrative issues are dealt with.
Magistrates’ court also has some civil jurisdiction deals with licensing for selling alcohol and
payment of council tax and tv licence
Youth Courts:
They are part of the magistrates’ court. For offenders <18 years of age. No public is allowed. Is
much more informal than a normal court.
Crown Courts:
Country is divided into 7 main regions, there being a court for every main region. Trials are heard
by a mixture of High Court judges, Circuit Judges and Recorders depending on the seriousness of
the offence.
Indictable offences are tried (or sentenced if defendant pleads guilty):
1. An indictment is prepared detailing the offences that the defendant is charged with
2. The case is tried by a judge and a jury
3. The judge directs the jury on the law
4. The jury makes the decision
5. If the defendant is found guilty the judge passes the sentence
Crown Courts also sentence cases referred from the Magistrates’ Court, when the MS decides that
the case need an unlimited sentencing power, because the case is more serious than initially
thought.
Appeals in the Crown Courts:
CC can also hear appeals from Magistrates’ Courts or Youth Courts, which can be against sentence
or conviction
The County Courts:
Originally established in 1846, they trial civil law cases. Since 2014, there is one centrally organised
County Court. Cases are heard at hearing centres all over the country. Financial limits were raised
in 2014, now most of civil trials are heard at County Courts.
4
