Business Law - Case Study! Help Me!?

Question

Karen runs a business which imports cheap cigarettes into Scotland from the remote Central Asian Republic of Wazirstan. These products have proved to be popular with Scottish smokers at a time when tobacco prices have risen sharply. Karen is shocked to be informed that the Scottish Parliament had now bought in legislation {The Regulation of Foreign Tobacco Products (Scotland Act 2005), after medical studies showed that people who smoked these Waziri cigarettes were on average 100 more likely to develop cancer when compared to smokers of other tobacco products.

As a result of the new legislation, it is now a criminal offence to offer to sell/supply these products. Karen has huge consignments of cigarettes presently sitting in her warehouse currently waiting to be delivered to her business customers. Many of these business sutomers have now cancelled their orders as a result of the introduction of the new legislation.

Answer 1

Hi Sarah,

I have to assume that you have to either advise Karen of her legal rights or you have to look at the problem of potential consequences for the business.

There are two issues here, The business or Karen?

These are two different legal entities.

Let us assume you have to advise Karen.

Use IDEA.

IDENTIFY the area of law you are discussing.

DEFINE the area of law.

EXPLAIN the law

APPLY the law.

There is obviously an issue here between Karen and the legislature. Constitutional law?

Can Karen litigate against parliament?

If so on what grounds?

Can she ask for a judicial review?

Is there an issue in EU law here?

Is this legislation a measure equivalent to a quantitive restriction? (MEQR).

Article 81 & 82 of the EU Treaty? Do they apply here?

What remedies are available?

Is there a defence? Public interest?

Hope this helps you think.

Good luck.

Answer 2

Legislation is not enacted overnight, and once enacted it rarely becomes effective immediately. Karen may have an opportunity to "dump" the cigarettes if she moves quickly.

Also, due to the vagueness of the question it is not clear whether the illegality of sale is limited to sales to someone in Scotland, or anywhere. Is actual ownership of the cigarettes a crime? If not, Karen will have to sell her inventory offshore - somewhere where it is not illegal.

Where is the warehouse? If it is not in Scotland, Karen is in a much better position to move the inventory to another less-restricted country for sale.

Answer 3

Under basic contract law, supervening illegality voids a contract - in other words, if the subject matter of the contract become illegal as it is here, then both parties' obligations and rights under the contract are void or extinguished.

Answer 4

you should not have pinned your hopes on abusiness, that is beingwhiped out because of the death toll it claims, i think you might be doomed on this one.