Marketing And The Law Essay

Marketing And The Law Essay

Marketing is considered as a bridge between the organization and a customer. Marketing and law are directly related to each other. The cost of negligence of law could be unavoidable for whole organization. “Ignorance of law is a very dangerous state of affairs as it can lead to an infringement of someone else’s intellectual property rights, an expensive lawsuit, a cancelled marketing campaign, damages to reputation that could take years to repair and potentially a downturn in profits.”(Ardi Kolah, 2002) it is essential to understand implications and relationship of law and marketing especially in UK. This is argued due to the fact that UK is extremely concern about just and correct implementation of its laws and regulation in every field. Therefore it is essential to have a core marketing penetrating strategies that work out according to the laws and regulations of a particular country in order to facilitate positive results for marketers in the right direction.

1.1 Main sources of law in the UK:

UK legal system is clearly divided into its two major components. Three major sources of law are Courts, Parliament and European Union Law. Courts are considered as the foremost law making and regulatory bodies because they interpret statutes and delegated legislation into common law. Courts are being classified according to issues addressed by them. Civil issues are heard by the civil court, while the criminal cases are handled by the Criminal court. The other law making bodies that work on the national grounds are the Parliament and legislatures. They seek out the laws that are better for the efficient and effective functioning of legal and institutional system of the country.

The mains law sources observed in UK are as follows.

  1. European community Law:

European Community is a regional cooperative organization that makes combine efforts from its member countries for economic, social and community issues. UK is a member of European Union and abides by its rules. “In effect, as regard community matters, the UK legislature, executive and judicial powers are now controlled by, and can only be operated within the framework of European community Law.” (Gary Slapper, David Kelly, 2003)

  1. Legislature and Parliament:

Another most important source for law in UK is legislatures and parliament. “Parliament has the power to enact, revoke, or alter such, and any, law as it sees fit.” (Gary Slapper, David Kelly, 2003) The laws or legislations are mostly formed by the UK parliament which may be amended by successive legislation and amendment acts. These laws act on a broad level. These powers are given to parliament in response of its prolonged battle with crown. Parliament is the supreme authority in UK. “Prerogative powers still exist and remaining but are now exercised by the government in the name of crown.

  1. Case Law and Precedent:

Case law is source of law that consists on the decisions made by the courts. It refers to the “creation and refinement of law in the course of judicial decisions.” (Gary Slapper, David Kelly, 2003) These decisions are made by the judges on all sorts of judicial matters including civil and criminal. When an equitable or legal decision or law or principle moved in an appropriate court, it is referred as judicial precedent. “The case law can be overturned by the legislation.” (Gary Slapper, David Kelly, 2003)

Case law could be retained through law reporting. It is done through The year book, Private reporting(1535-1865), Modern reports (1865 to present), the law reports, Weekly Law reports, All England Law reports, Legal periodicals & newspapers, Especialist reports, European Union Community reports, European Court reports, Community Marketing law report, CD ROM and Internet facilities. Advantages of Case Laws are consistency, certainty, efficiency and flexibility. Its disadvantages are Uncertainty, fixity and unconstitutionality.

  1. Statuary Interpretation:

These are the specific rules observed by the courts for consistency in interpreting the meaning of legislation, resolving ambiguity appearing in statutes.

  1. Customs:

As it is a know fact that UK law is mainly derived from customs, norms and its traditional values. It is an unwritten law governed by documents like MagnaCarda etc. Customs play a significant role in shaping UK law.

  1. Law Reforms:

Continuous efforts are being made to increase effectiveness during implementation of law in UK. Therefore regular amendments are made to facilitate positive results from implemented regulations.

Diagram of the civil and criminal court structures:

Judicial precedent in Civil Court Structures:

The Country court and Tribunal handle the civil issues. There are around 218 courts in England and Wales. The Tribunal court look at immigration, child support, social security pension tax and land where as country court handles majority of civil litigation subject to nature of the claim. Both the courts direct their appeals to court appeal and High court. At court appeal these issues are heard by the Civil Division. If the issue is complex then it is directed to “House of Lords” which is the Supreme Judicial body.

Judicial precedent in Criminal Court Structures:

Basically the crown courts (which have 78 centers in England and Wales) look into the criminal cases. These are special courts that deal the trials of summary offences, committals to the Crown Court, family proceedings courts and youth courts. The magistrate court issues are leaded to high courts while the crown court issues are heard by the Criminal Division of Court of Appeal. Unresolved or disputed cases are further headed to House of Lords.

Contract law:

Agreements are basis of contracts. “Contract law based primarily on the concepts of fairness, morality, and consent.” (Knapp, Crystal, Prince, 2003) It is written agreement that legally binds the contractors in accordance with the law of land. Contract Laws are also referred as “the law of private agreement.” (Knapp, Crystal, Prince, 2003) It is argued that “Contract role is limited by the doctrine of provity of contract.” (Peter Gillies, Niloufer Selvadurai, 2008) It is associated with the principle of individual and private autonomy. The contract holds the following characteristics:

  1. Set of rights and duties assigned in the agreement.

  2. Should have legal objectivity.

  3. Should be in black and white.

Contract law must address commercial market place needs, less formalized by rules and considerate about social justice, and economical integrity. It is argued that “Contract law is limited in certain respect.” (Peter Gillies, Niloufer Selvadurai, 2008)

Relevance of general principles of contract law to Franchise agreements:

Franchise agreements is defined as “…The license to do business under the name of another. Typically the franchisor uses the trademark and logo of the franchisee’s business and operates in the franchisee’s name” (Rossini) In the UK, a typical franchise agreement holds the same position as license for the property. Usually the franchise agreement lasts for a period of 5 years and can be renewed or terminated on expiry.

These agreements because it includes significant detail about the rights and obligations of each party, are generally longer and more detailed than other commercial agreements. As franchisor can hold more than one franchise therefore the agreement is usually non- negotiable. In the light of contract law the list of rights and obligations granted by the franchisor to the franchisee under the agreement and obligations of the franchisee to the franchisor should be comprehensive. Franchisors often enjoy considerable amount of control over the ways such as retaining the right to cancel or suspend the agreement in certain circumstances.

Relevance of general principles of contract law to Sponsorship agreement:

A sponsorship agreement governs the legal relationship between a sponsor and the agreement holder to enforce the sponsorship obligation. “Sponsorship contract include territory, category exclusivity, signage, broadcast rights, intellectual property licenses, virtual advertising and the protections that can be included against ambush marketing and sponsorship conflicts.” (Healey, pg 59) It is essential for the sponsor to define the relationship by contract so that the contractor may not bring any harm on the reputation and name of the sponsor. The contract makes the sponsor at ease and provides a sense of responsibility to the contract beholder. Sponsorship agreement has more contracting obligations with the individual or the contract making person than sponsor while the sponsor enjoys relative freedom.

General principles of contract law and Essential elements required to form a legally binding contract:

Contract laws are incomplete when either one of these essentials component is missing. These general principles are essential to construct solid commitments by concerned parties. They bound concerned parties to abide by the terms and conditions mutually decided and agreed by them. The basic essentials of a valid contract are as follows.

  1. An Offer:

There should be something to offer by both the contracting parties, something that interest and makes the deal valuable for both. Offer should be comprehend and clearly discussed, so that there is no air of confusion between the parties.

  1. Agreement:

A contract is formed when both the parties agreed on the point of exchanging and enjoying the relative facilities. Article 4.1 defines that contract shall not be in effect unless “be interpreted according to the common intention of the parties.” (Dr. Bruno Zeller, 2006-07) Without the agreement the contracts lead to failure.

  1. Consideration:

It is of prime concern that both parties should consider before engaging themselves in contract that either they will be able to fulfill the terms and conditions properly? It is important to remember that “It may consist of some right, interest, profit, or benefit that accrues to one party, or alternatively, of some forbearance, loss or responsibility that is undertaken or incurred by the other party.” (Solomon V. Greenblatt, 1991) It is a matter of consideration that concerned parties will be able to maintain their contract under any unfavorable circumstances or not.

  1. Creating a legal relationship:

Meeting of the minds” is important. This creates a fair relationship and parties with confidence on each other that is abide by the laws laid by them to enjoy the collective resources and accomplish their objectives.

Portfolio tort of negligence:

Tort law explains as “a civil wrong in the sense that it is committed against an individual (which includes legal entities such as companies) rather than the state. The gist of tort law is that a person has certain interests which are protected by law.” (General Principle of Tort law) It is the law against acts that bring damage or harm to an individual. It may include cases such as negative propaganda against a commercial entity due to individual on personal issues, damaging someone else’s property and bribing the opponent to bring harm to a particular person. Tort provides victims a chance to claim monetary compensation for damage incurred due to breach of law. The purpose of law of Tort is to Compensation, deterrence, justice, appeasement, normative rules of behavior; protection of interests recognized by law.

“English law has never succeeded in ridding itself of this nineteenth-century legacy and fault remains as the basis of most tort actions.” (General Principle of Tort law) Tort Law is applied incase of damages incurred by defendant in following areas.

  1. Personal security

  2. Interest in Property

  3. Economic Interest

  4. Reputation and privacy

There are increasingly limited circumstances where the victim of a tort may avail himself of self-help. The tort of defamation safeguards reputation and privacy interest of people.

Negligent misstatement under the common law:

Negligence refers to carelessness in common Law. It defines a behavior pattern rather than mental status. Negligence of tort defines an act performed by defendant that has caused harm to other people. It follows the principle of “strict liability” that enforces liability without fault. It is critical to understand that negligence of tort is not concerned with intentions of the defendants. “When a court finds that a person has been negligent it is making an ex post assessment of their conduct.” (General Principle of Tort law)

The principle of negligence revolves around the fact that damage has caused by defendant and victim has complete rights to ask for compensation. “The liability for negligence, whether you style it such or treat it as in other systems as a species of ‘culpa,’ is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay.” (Lord Atkin, pg 12) Individual disabilities are neglected while considering negligence of Tort.

What a claimant must prove in order to be successful in an action:

In order to avoid the misconception and tort due to negligence, It is extremely important to establish that plaintiff has suffered damage, injury or loss due to the actions of defendant. What is common to all tort actions is the idea of causation. The claimant must always prove that the defendant caused their injury.” (General Principle of Tort law) It is also critical to determine standards and reference in accordance with the objective i.e. either compensation or deterrence. It is also important to prove that defendant had not taken due care initiatives in order to meet the standard of care. A claim must be prove that identified risks were not assessed properly to avoid negligent on dependant part. Incase of violation of human rights act, tort claim could also filed against other party. The high degree of harm and no remedial efforts made by the defendant will also play significant role while making decision. In order to be successful in a negligence claim, it is critical to understand that defendant is not minor or protected group like Police or Advocate.

Advertising:

The general framework of advertising in the EU was set in 1984 by the directive 84/ 4/ EEC of 10 September 1984 concerning misleading and comparative advertising. Misleading advertising as a result of amendment in 1996 defined in article 3 as: “Any Advertising, which in any way, Including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behavior or which injures or is likely to injure a competitor.” (Gunter, Oates, Blades, 2005,)

Regulations are implied on advertising industry to lay down guidelines for ethically responsible advertising. It is an attempt to make clear distinction between misleading and fair advertising. Few of foremost considerations are as follows.

  1. The characteristics of goods and services.

  2. The price.

  3. Condition governing the supply of good or the provision of services.

  4. The nature, quality and rights of the advertiser.

Being an EU member estate UK advertising industry is bounded by various rules and regulations imposed by EU. One of the foremost regulations imposed on advertising is “Broadcasting Act 1990) Advertising Standard Authority (ASA) and Committee of Advertising (CAP) are also self regulatory bodies. British code of advertisement and Sales promotion is also imposed by CAP as part of continuous efforts to provide safety to individual and property rights. Trade description Act of 1968 also calls for action “if advertisement contains false description of trade.” (Ardi Kolah, 2002)

Regulations on television advertising in the UK:

Television is the most popular advertising medium in the technological world. According to Market review series of European commission, internal market; “Over the last 15 years, and particularly during the 90’s, there was a notable increase in advertising investments in the EU, particularly with regard to television.”(Bocconi & ESADE) Television has always attracted both customers and advertisers to market their product on broad scale with in the access of there many customers.

ITC is the government owned regulatory body. “ITC is given the power by the government to control the content of all broadcasting on the licensed or independent television channels.” (Ardi Kolah, 2002) The main guideline for television is named as “ITC Code” is imposed by ITC. Broad Cast Advertising Clearance Center (BACC) control all aired advertisements on television. Code of Programme Sponsorship is also implied on television commercial sponsors. Broad Casting Standard Commission is arbitration body to review complains of common people regarding Television and advertisement. Television advertisements are also governed by “Control of misleading advertisement Amendments 2000” and EU Misleading and Comparative Advertisement Directive.”

Regulations on Radio advertising in the UK:

Radio due to its portable nature has vast chances of penetrating the products and therefore marketers have a vast range audience to promote their products and services to massive audience. Radio authority is the regulatory body for radio networks in UK. It has also published Radio authority code, Code on Programme Sponsorship. Advertisement Clearance Center Control radio advertisement for safeguarding private property and interest. It is compulsory for all radio stations to comply with Code of Programme Sponsorship in order to retain their licenses. It is interesting to know that a regulation exist that said that “All programs are allowed to be sponsored except news.”(Sean Brierley, 2002)

Conclusion:

Marketing is the serving plate of the organization. It sorts out the ways to present the products and services to the consumers and customers and to do that it has to follow up the laws and regulations laid during contracting, or drafted by the country itself. It is essential for marketers to have sufficient knowledge regarding legal implications of their actions otherwise their organizations will suffer in the form of legal actions from competitors and general public.

References

Ardi Kolah, 2002, Essential Law for Marketers, Butterworth-Heinemann, 424 pages

Gary Slapper, David Kelly, 2003, The English legal system, Edition: 6, Routledge, 685 pages

Peter Gillies, Niloufer Selvadurai, 2008, Marketing Law, Federation Press, 366 pages

Charles L. Knapp, Nathan M. Crystal, and Harry G. Prince, 2003, Problems in Contract Law Cases and Materials, Fifth Edition, ASPEN PUBLISHERS, New York, NY

Sean Brierley, 2002, The advertising handbook, Edition: 2, Routledge, 297 pages

Barrie Gunter, Caroline Oates, Mark Blades, 2005, Advertising: Advertising to Children on TV, 209 pages

Universita’ Commerciale Luigi Bocconi & ESADE, Advertsing, the Single Market Review Series, pg 3, 4 Retrieved from (http://ec.europa.eu/internal_market/economic-reports/docs/studies/stud5_en.pdf) Retrieved on 16 May 09

The Output and Impact of Commercial Radio Retrieved from (http://www.radiocentre.org/rc2008/documents/RC_CRCAPSBReportWEB.pdf) Retrieved on 16 May 09

Lord Atkin, pg 12, negligence: the basic principle of duty and care

M. Stuart Madden, 2005, Exploring tort law, Cambridge University Press, 492 pages

Hugh Beale, Denis Tallon, 2002, Contract law, Hart Publishing, 993 pages

Student Briefing No.5: The Regulation of Advertising, The Advertising Association, London Retrieved from http://www.adassoc.org.uk retrived on May 16 09

Beebe, Jack, 1977, Institutional Structure and Program Choices in Television Markets, Quarterly Journal of Economics, 91, 15-37.

Gordon Anthony, 2002, UK public law and European law, Hart Publishing,198 pages

P. T. Kelly, 1999, Television violence: a guide to the literature, Edition: 2, Nova Publishers, 311 pages

Richard Collins, 1990, Television: policy and culture, Routledge, 276 pages

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