Question

QUESTION

Jim is a 15-year-old boy living in London. Briefly explain to Jim the legal position
arising from the following scenarios:
(a) In the morning Jim offers to wash his dad’s car for £10. Having washed the car,
his dad tells him that he changed his mind and does not pay Jim!
(b) Later in the afternoon, Jim is out at the high street, when he sees in a shop his
favourite skateboard being offered for £50, i.e. half the normal price. He enters
the shop and asks to buy it at that price. The shopkeeper tells him that there has
been a mistake on the price labelling and the price is £100 for the skateboard!
QUESTION 2
Briefly explain the liability of:
(a) A director of a private limited liability company.
(b) A partner of a partnership.
(c) A sole trader.
(d) A private limited company.

Answer 1

In Jim's scenarios, while the expectation is that his father should honor his agreement to pay £10 for washing the car, such family arrangements are often not deemed legally binding. For the skateboard, the shopkeeper is not bound to honor the labeled price if it was an error, as it's considered an invitation to treat. The liabilities of different business roles and structures vary, with sole traders being personally liable for debts, while directors, partners, and companies have differing degrees of responsibilities and protections.

Step-by-step explanation:

Regarding the scenarios presented for Jim, a 15-year-old boy living in London:

In the case where Jim's dad refuses to pay him after he washed the car, there is usually an expectation that family arrangements such as this are not legally binding contracts. However, if it was a serious agreement, Jim might have a claim for the £10 based on the work done, but this would often be considered part of familial duties rather than a contract.

When Jim tries to buy the skateboard and the shopkeeper says there has been a mistake in the price labelling, legally, the shop does not have to sell the skateboard for the labelled £50 if it was a genuine error. Advertisement of prices is usually considered an invitation to treat, and the shop has not accepted his offer to buy at that price.

Concerning liability:

A director of a private limited liability company has obligations to act within the powers granted by the company's constitution, promote the success of the company, and exercise independent judgment, among other duties.

A partner in a partnership is jointly liable for the debts and obligations of the partnership and must act in the best interest of the business.

A sole trader is personally liable for all the business debts and obligations.

A private limited company's liability is limited to the amount unpaid on shares held by the members. The company itself is responsible for its debts, protecting the personal assets of its members.