SIXTH EDITION L A L A W F O R W ‘Its lucidity, structure and ease of use is a sure SIXTH EDITION winner with business students while the boxed BUSINESS F cases make the approach to the study of law not just interesting but comprehensible and O accessible. The activities and assignments after each chapter reinforce understanding R and provide an opportunity for students to put STUDENTS theory into practice.’ L A W F O R Dr Vick Krishnan, Principal Lecturer and Subject Leader in Law, B Regent’s College, London U S I BUSINE S S N E S S STUDENTS ALIX ADAMS S Do you want to give yourself a head start T From hiring and fi ring, to selling goods or come exam time? U starting your own company, the world of D business is inextricably linked to law and legal regulation. Alix Adams’ lively and Visit www.mylawchamber.co.uk/adams to access E interactive exercises and fl ashcards designed so understandable introduction to all aspects of N that you can test yourself on topics covered in the law encountered in business will provide you book. There are also legal updates and live weblinks to help you impress examiners and lecturers with T with a clear appreciation of the main rules and knowledge of the latest developments. S legal principles. Lecturers: use the site to access resources to help you teach the subject, including a testbank of multiple choice questions which can be used Utilising a host of features in a colourful to assess students’ progress. and clear design, Law for Business Students Worried about getting to grips with cases? SIXTH encourages you to understand how the law Case Navigator offers unique online support that helps you EDITION works in everyday business situations and apply improve your case reading and analysis skills in Business Law. Cases contained within this resource are highlighted it to your course, your own experiences and the throughout this book. The LexisNexis element of Case world around you. Navigator is only available to those who currently subscribe to LexisNexis Butterworths online. A ALIX ADAMS has over thirty years’ experience CASE D of teaching law from GCSE to degree and POWERED BY A postgraduate level and is a qualifi ed barrister. NAVIGATOR M S www.pearson-books.com ALIX ADA M S Cover © Artostock.com/Alamy CVR_ADAM5455_06_SE_CVR.indd 1 20/1/10 12:49:55 Law for Business Students We work with leading authors to develop the strongest educational materials in business and law, bringing cutting-edge thinking and best learning practice to a global market. Under a range of well-known imprints, including Longman, we craft high quality print and electronic publications which help readers to understand and apply their content, whether studying or at work. To find out more about the complete range of our publishing, please visit us on the World Wide Web at: www.pearsoned.co.uk Law for Business Students Sixth edition Alix Adams LLB (Bristol), LLM (Cardiff), Barrister, Cert. Ed. Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk First published under the Pitman Publishing imprint in Great Britain in 1996 Second edition published 2000 Third edition published 2003 Fourth edition published 2006 Fifth edition published 2008 Sixth edition published 2010 © Pearson Professional Limited 1996 © Pearson Education Limited 2000, 2010 The right of Alix Adams to be identified as author of this work has been asserted by her in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. Crown Copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland Law Commission Reports are reproduced under the terms of the Click-Use Licence ISBN: 978-1-4082-2545-5 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Public ation Data Adams, Alix. Law for business students / Alix Adams. -- 6th ed. p. cm. Includes index. ISBN 978-1-4082-2545-5 (pbk.) 1. Business law--England. I. Title. KD661.A33 2010 346.4207--dc22 2009047012 10 9 8 7 6 5 4 3 2 1 14 13 12 11 10 Typeset in 9.5/13 pt Frutiger Light by 30 Printed and bound by Rotolito Lombarda, Italy The publisher’s policy is to use paper manufactured from sustainable forests For Cherry, with much love and gratitude Brief contents Contents ix Guided tour xx Acknowledgements xxiv Preface xxv Table of cases xxvi Table of statutes xxxvii Table of statutory instruments xliv Table of European and international legislation xlvi Part 1: Introduction 3 1 Getting started: an introduction to studying law 4 2 How the law is made 16 3 Resolving legal disputes 40 Part 2: Law of contract, agency and sale of goods 61 4 The law of contract: offer and acceptance 62 5 The law of contract: consideration, intention and privity 82 6 The terms of the contract 100 7 Defects in the contract: misrepresentation, mistake, duress and undue 126 influence 8 More defects: illegality and incapacity 152 9 Discharge of the contract and remedies for breach 168 10 The law of agency 198 11 Sale of goods: the contract and its terms 216 12 Sale of goods: transfer of ownership, performance and remedies for breach 234 of contract Part 3: The law of tort 255 13 Tort liability for defective goods 256 14 Tort liability for defective services 276 15 Tort liability for premises 316 vii BRIEF CONTENTS Part 4: Elements of employment law 347 16 Rights at work: the contract of employment and health and safety at work 348 17 Rights at work: protection against discrimination 368 18 Rights at work: protection against dismissal and redundancy 396 Part 5: Introduction to company law 417 19 Business organisation 418 20 Forming a registered company 440 21 Running the company: raising and maintaining capital 454 22 Daily management of the company: functions of directors, secretary and auditors 466 23 Company meetings and shareholder participation 486 Part 6: General principles of intellectual property law 501 24 Statutory intellectual property protection: copyright, designs, patents and 502 trade marks 25 Common law protection of intellectual property: passing off, malicious 522 falsehood and breach of confidence Part 7: Study skills 539 26 Study skills, and revision and examination hints 540 Appendix 1: Additional resources 550 Appendix 2: Worth thinking about? and quiz solutions 556 Index 569 viii Contents Guided tour xx Acknowledgements xxiv Preface xxv Table of cases xxvi Table of statutes xxxvii Table of statutory instruments xliv Table of European and international legislation xlvi Part 1: Introduction 3 1 Getting started: an introduction to studying law 4 Introduction 5 What is law? 6 The characteristics of English law 6 Why do we need law? 8 The differences between criminal and civil law 9 Changing the law 10 Essential legal terms 11 Introductory study tips 12 Chapter summary 14 Key terms 14 Quiz 1 15 2 How the law is made 16 Introduction 17 European law 18 Parliament 21 The courts 24 The Human Rights Act 1998 (HRA 1998) 32 ix