Presentation on theme: "1 Common law regulation: tort 2 Statutory control of business 3 Statutory control of business 4 Corporate financing vehicles 5 Secured transaction 6 CCA."— Presentation transcript:
1 Common law regulation: tort 2 Statutory control of business 3 Statutory control of business 4 Corporate financing vehicles 5 Secured transaction 6 CCA (Consumer Credit Act) 1974 7 Bankruptcy Act 8 Limitation on creditor’s rights
1 Common law regulation: tort 1.1 Basis for tort liability (1) Fault (2) Strict liability (3) Social policy
1.2 Negligence (1) Four elements * Duty of care * Breach of the duty of care * Causation * Remoteness of damage (2) This does not impose a great number of environmental duties on business because other well-established torts do.
1.3 Private nuisance (1) 3 elements * Indirect interference with a person’s land, noise, dumping rubbish * Actual damage * Unreasonable interference
Case: Leeman v Montagu (1936) Montagu bought a house in a residential area bordering an open countryside. He kept a flock of 750 cockerels in an orchard about 100 yards from the house. These cockerels crowed from 2 am to 7 am, making it impossible for Leeman to sleep. Leeman asked the court for an injunction. Court: Injunction was granted.
1.4 Public nuisance 1.5 Occupier’s liability (1) To lawful visitors: * Express or implied permission (2) Trespassers * Even trespassers need considerable protection
(3) Notices and signs * Turn lawful visitor into trespasser * Provide the defense of victim’s consent * Such notice is ineffective for business premises occupiers. (4) Defenses * Victim’s consent * Contributory negligence
1.6 Strict liability (1) 4 requirements * Defendant must bring sth. on to his land * This must be unnatural use of it * Such thing is likely to do mischief if it escapes * It must escape and cause damage. (2) Defenses * Victim’s fault * Act of God * Act of stranger * Statutory authority
1.7 Trespass to land Direct interference with a person’s land 1.8 Trespass to person (1) Battery (2) Assault (3) False imprisonment 1.9 Trespass to goods Conversion: deny another person’s right to possess goods 1.10 Defamation (1) Libel (2) Slander
2 Statutory control of business: responsibility to individuals: DPA (Data Protection Act) 1984 2.1 Data Machine reading data Hand-written files 2.2 Registration (1) Data user must register with the Registrar. (2) Provide relevant information to Registrar (3) The register is a public document which may be inspected free of charge.
2.3 Eight principles * Be processed fairly and lawfully. * Be held only for 1 or more specified and lawful purposes. * Not disclosed in any manner incompatible with such purpose. * Be adequate, relevant and not excessive in relation to that purpose. * Be accurate and if necessary kept up to date. * Be kept for no longer than is necessary for that purpose. * Respect individual’s right of access and information. * Take appropriate security measure.
2.4 Individual’s rights * Subject access right * Right to take action for compensation * Right to have incorrect personal data corrected or erased. * Right to complain to the Registrar.
2.5 Exemptions * Personal data for personal, family or recreational affairs * Personal data only for calculating wage and pensions, keeping accounts etc. for purchase and sale. * Personal data of members in members’ club, if they agree so. * Personal data the law requires to be made public or be exempt for national security.
3 Statutory control of business: environmental responsibility (1) Such statutes are enforced by specialist environmental agency. (2) Most statutes impose strict liability on the business. Case: Alphacell Ltd v Woodward (1972) A company’s settling tanks overflowed into a river. It was found guilty of causing a polluted substance to enter into the river in violation of River Act 1951 even though it had not been negligent and did not know that the pollution had taken place. House of Lords: Mens rea is generally not an ingredient in an offence of this kind which is in the nature of a public nuisance.
4 Corporate financing vehicles 4.1 By shares (1) Ordinary shares v preference shares * Ordinary shares:OSOV, dividends * Preferred shares: rate of interests p.a. as dividend, be repaid in full upon dissolution with priority (2) Varying the class rights of shares * Ordinary class A, Class B,
(3) Other types * Employee shares * Right issues * Bonus shares * Redeemable shares 4.2 By bond & loan (1) Loan (2) Debenture (3) Bond
5 Secured transaction 5.1 Types of credit transaction (1) Conditional sale * Ownership stays with the seller * The buyer takes immediate possession (2) Hire purchase * Finance company as intermediary * The dealer sells the goods to finance company * Finance company makes the hire-purchase agreement with final buyer * Collateral security may exist between dealer and customer
(3) Credit sales * Immediate transfer of ownership to buyer (4) Hire & rental agreements: * Rent, short period * Hire, longer period (5) Trade credit: L/C 5.2 Collateral security devices (1) Guarantee (2) Pledges (3) Charges: fixed charges and floating charges (4) Mortgage:
5.3 Fixed charges (1) On specific assets (2) Must subject to registration. Else, invalid. 5.4 Floating charges (1) On circulating assets: acceptable (2) Materials, warehouse stock, semi-product (3) Company can only use assets charged in its normal course of business. (4) This does not provide cast-iron security for creditors. (5) Crystallization: occurs automatically upon * Receiver is appointed * Liquidation * Ceasing to carry on business * Situations specified by contract.
5.5 Effects on unsecured creditors (1) Priority & registration * Registration is generally required. * Priority (2) Fraudulent preferences: invalid, criminal offence
6 CCA (Consumer Credit Act) 1974 6.1 General control (1) Director General of Fair Trading: enforcement (2) Methods of control * Licensing control * Advertising control: APR (annual percentage rate) * Canvassing control: actively approaching customer in order for obtaining business is outlawed.
6.2 Regulation of individual credit agreement (1) Two conditions * Debtor is not company * Amount of credit is $15000 or less (2) Exceptions * Mortgage to buy house, building society * Low interest agreement
(3) Protections & remedies * Dealer is deemed agent of creditor * Creditor responsible for dealer’s misrepresentation & violation of contract * Cooling-off period: 5 days * Early settlement * Repossession of goods: in case buyer breaks contract in conditional sell and hire purchase * Extortionate terms: may be rewritten by courts
7 Bankruptcy Act 7.1 Methods of procedures (1) Receiving order * Creditor may apply for this (2) Assignment: voluntarily by debtor (3) Proposal * Insolvent person may make such proposal to creditors viewing to avoiding bankruptcy. * If agreed by creditor, alternative solution will replace bankruptcy proceedings.
7.2 Acts of bankruptcy (1) Assignment of assets to trustee (2) Fraudulent transfer of assets to 3 rd party (3) Fraudulent preference (4) Attempt to abscond (escape) (5) Failure to redeem goods seized under execution (6) Balance sheet indicating insolvency (7) Written admission of inability to pay debts (8) Attempt to remove or hide property (9) Notice to any creditors saying it is suspending debt payment (10) Default in honoring any previous proposals for forestalling bankruptcy (11) Failure to meet liability generally as they become due.
7.3 Preferences (1) Secured creditors enjoy top preferences (2) Preferred creditors is the next priority * Reasonable funeral and legal expenses for debtor’s death * Expenses and fees of licensed trustee * 3 months’ arrears of employee wages * Municipal taxes * Arrears of rent due for the past 3 months * Cost of the first execution or attachment creditor * Indebtedness of the debtor under Workers’ Compensation Act, etc. * Employee’s certain injury claims * Crown’s claim
(3) Fraudulent preferences Payment of money or transfer of property to a creditor by insolvent debtor within 3 months before bankruptcy viewing to giving that creditor preferences over other creditors. This is recoverable. (4) Reviewable transaction * Not at arm’s length: between person related each other * If made by debtor within 12 months before bankruptcy. (5) Debtor’s duty * Aid to the utmost in the realization of his property and distribution of the proceeds among creditors
8 Limitation on creditor’s rights (1) Simple contract: 6 years after the rights of action arose (2) Contract by deed: 12 years after the rights of action arose