A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, with oligopoly which consists of a few sellers dominating a market. Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit; the verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices. Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry.
A monopoly is distinguished from a monopsony, in which there is only one buyer of a product or service. A monopoly should be distinguished from a cartel, in which several providers act together to coordinate services, prices or sale of goods. Monopolies and oligopolies are all situations in which one or a few entities have market power and therefore interact with their customers, or suppliers in ways that distort the market. Monopolies can be established by a government, form or form by integration. In many jurisdictions, competition laws restrict monopolies. Holding a dominant position or a monopoly in a market is not illegal in itself, however certain categories of behavior can be considered abusive and therefore incur legal sanctions when business is dominant. A government-granted monopoly or legal monopoly, by contrast, is sanctioned by the state to provide an incentive to invest in a risky venture or enrich a domestic interest group. Patents and trademarks are sometimes used as examples of government-granted monopolies.
The government may reserve the venture for itself, thus forming a government monopoly. Monopolies may be occurring due to limited competition because the industry is resource intensive and requires substantial costs to operate. In economics, the idea of monopoly is important in the study of management structures, which directly concerns normative aspects of economic competition, provides the basis for topics such as industrial organization and economics of regulation. There are four basic types of market structures in traditional economic analysis: perfect competition, monopolistic competition and monopoly. A monopoly is a structure in which a single supplier sells a given product. If there is a single seller in a certain market and there are no close substitutes for the product the market structure is that of a "pure monopoly". Sometimes, there are many sellers in an industry and/or there exist many close substitutes for the goods being produced, but companies retain some market power; this is termed monopolistic competition.
In general, the main results from this theory compare price-fixing methods across market structures, analyze the effect of a certain structure on welfare, vary technological/demand assumptions in order to assess the consequences for an abstract model of society. Most economic textbooks follow the practice of explaining the perfect competition model because this helps to understand "departures" from it; the boundaries of what constitutes a market and what does not are relevant distinctions to make in economic analysis. In a general equilibrium context, a good is a specific concept including geographical and time-related characteristics. Most studies of market structure relax a little their definition of a good, allowing for more flexibility in the identification of substitute goods. Profit Maximizer: Maximizes profits. Price Maker: Decides the price of the good or product to be sold, but does so by determining the quantity in order to demand the price desired by the firm. High Barriers: Other sellers are unable to enter the market of the monopoly.
Single seller: In a monopoly, there is one seller of the good, who produces all the output. Therefore, the whole market is being served by a single company, for practical purposes, the company is the same as the industry. Price Discrimination: A monopolist can change the price or quantity of the product, he or she sells higher quantities at a lower price in a elastic market, sells lower quantities at a higher price in a less elastic market. Monopolies derive their market power from barriers to entry – circumstances that prevent or impede a potential competitor's ability to compete in a market. There are three major types of barriers to entry: economic and deliberate. Economic barriers: Economic barriers include economies of scale, capital requirements, cost advantages and technological superiority. Economies of scale: Decreasing unit costs for larger volumes of production. Decreasing costs coupled with large initial costs, If for example the industry is large enough to support one company of minimum efficient scale other companies entering the industry will operate at a size, less than MES, so cannot produce at an average cost, competitive with the dominant company.
If long-term aver
Board of directors
A board of directors is a group of people who jointly supervise the activities of an organization, which can be either a for-profit business, nonprofit organization, or a government agency. Such a board's powers and responsibilities are determined by government regulations and the organization's own constitution and bylaws; these authorities may specify the number of members of the board, how they are to be chosen, how they are to meet. In an organization with voting members, the board is accountable to, might be subordinate to, the organization's full membership, which vote for the members of the board. In a stock corporation, non-executive directors are voted for by the shareholders, with the board having ultimate responsibility for the management of the corporation; the board of directors appoints the chief executive officer of the corporation and sets out the overall strategic direction. In corporations with dispersed ownership, the identification and nomination of directors are done by the board itself, leading to a high degree of self-perpetuation.
In a non-stock corporation with no general voting membership, the board is the supreme governing body of the institution, its members are sometimes chosen by the board itself. Other names include board of directors and advisors, board of governors, board of managers, board of regents, board of trustees, or board of visitors, it may be called "the executive board" and is simply referred to as "the board". Typical duties of boards of directors include: governing the organization by establishing broad policies and setting out strategic objectives. For companies with publicly trading stock, these responsibilities are much more rigorous and complex than for those of other types; the board chooses one of its members to be the chairman, who holds whatever title is specified in the by-laws or articles of association. However, in membership organizations, the members elect the president of the organization and the president becomes the board chair, unless the by-laws say otherwise; the directors of an organization are the persons.
Several specific terms categorize directors by the presence or absence of their other relationships to the organization. An inside director is a director, an employee, chief executive, major shareholder, or someone connected to the organization. Inside directors represent the interests of the entity's stakeholders, have special knowledge of its inner workings, its financial or market position, so on. Typical inside directors are: A chief executive officer who may be chairman of the board Other executives of the organization, such as its chief financial officer or executive vice president Large shareholders Representatives of other stakeholders such as labor unions, major lenders, or members of the community in which the organization is locatedAn inside director, employed as a manager or executive of the organization is sometimes referred to as an executive director. Executive directors have a specified area of responsibility in the organization, such as finance, human resources, or production.
An outside director is a member of the board, not otherwise employed by or engaged with the organization, does not represent any of its stakeholders. A typical example is a director, president of a firm in a different industry. Outside directors are not affiliated with it in any other way. Outside directors bring outside experience and perspectives to the board. For example, for a company that only serves a domestic market, the presence of CEOs from global multinational corporations as outside directors can help to provide insights on export and import opportunities and international trade options. One of the arguments for having outside directors is that they can keep a watchful eye on the inside directors and on the way the organization is run. Outside directors are unlikely to tolerate "insider dealing" between insider directors, as outside directors do not benefit from the company or organization. Outside directors are useful in handling disputes between inside directors, or between shareholders and the board.
They are thought to be advantageous because they can be objective and present little risk of conflict of interest. On the other hand, they might lack familiarity with the specific issues connected to the organization's governance and they might not know about the industry or sector in which the organization is operating. Director – a person appointed to serve on the board of an organization, such as an institution or business. Inside director – a director who, in addition to serving on the board, has a meaningful connection to the organization Outside director – a director who, other than serving on the board, has no meaningful connections to the organization Executive director – an insi
Foss v Harbottle
Foss v Harbottle 67 ER 189 is a leading English precedent in corporate law. In any action in which a wrong is alleged to have been done to a company, the proper claimant is the company itself; this is known as "the rule in Foss v Harbottle", the several important exceptions that have been developed are described as "exceptions to the rule in Foss v Harbottle". Amongst these is the'derivative action', which allows a minority shareholder to bring a claim on behalf of the company; this applies in situations of'wrongdoer control' and is, in reality, the only true exception to the rule. The rule in Foss v Harbottle is best seen as the starting point for minority shareholder remedies; the rule has now been codified and displaced by the Companies Act 2006 sections 260-263, setting out a statutory derivative claim. Richard Foss and Edward Starkie Turton were two minority shareholders in the "Victoria Park Company"; the company had been set up in September 1835 to buy 180 acres of land near Manchester and, according to the report, "enclosing and planting the same in an ornamental and park-like manner, erecting houses thereon with attached gardens and pleasure-grounds, selling, letting or otherwise disposing thereof".
This became Manchester. Subsequently, an Act of Parliament incorporated the company; the claimants alleged that property of the company had been misapplied and wasted and various mortgages were given improperly over the company's property. They asked that the guilty parties be held accountable to the company and that a receiver be appointed; the defendants were the solicitors and architect. Wigram VC dismissed the claim and held that when a company is wronged by its directors it is only the company that has standing to sue. In effect the court established two rules. Firstly, the "proper plaintiff rule" is that a wrong done to the company may be vindicated by the company alone. Secondly, the "majority rule principle" states that if the alleged wrong can be confirmed or ratified by a simple majority of members in a general meeting the court will not interfere; the rule was extended to cover cases where what is complained of is some internal irregularity in the operation of the company. However, the internal irregularity must be capable of being confirmed/sanctioned by the majority.
The rule in Foss v Harbottle has another important implication. A shareholder cannot bring a claim to recover any reflective loss - a diminution in the value of his or her shares in circumstances where the diminution arises because the company has suffered an actionable loss; the proper course is for the company to bring the action and recoup the loss with the consequence that the value of the shares will be restored. Because Foss v Harbottle leaves the minority in an unprotected position, exceptions have arisen and statutory provisions have come into being which provide some protection for the minority. By far and away the most important protection is the unfair prejudice action in ss. 994-6 of the Companies Act 2006. There is a new statutory derivate action available under ss 260-269 of the 2006 Act. There are certain exceptions to the rule in Harbottle, where litigation will be allowed; the following exceptions protect basic minority rights, which are necessary to protect regardless of the majority's vote.
1. Ultra vires and illegalityThe directors of a company, or a shareholding majority may not use their control of the company to paper over actions which would be ultra vires the company, or illegal. S 39 Companies Act 2006 for the rules on corporate capacity Smith v Croft and Cockburn v. Newbridge Sanitary Steam Laundry Co. 1 IR 237, 252-59 for the illegality point2. Actions requiring a special majorityIf some special voting procedure would be necessary under the company's constitution or under the Companies Act, it would defeat both if that could be sidestepped by ordinary resolutions of a simple majority, no redress for aggrieved minorities to be allowed. Edwards v Halliwell 2 All ER 10643. Invasion of individual rightsPender v Lushington 6 Ch D 70, per Jessel MR...and see again, Edwards v Halliwell 2 All ER 1064 4. "Frauds on the minority"Atwool v Merryweather LR 5 EQ 464n, per Page Wood VC Gambotto v WCP Limited 182 CLR 432 Daniels v Daniels fraud in the context of derivative action means abuse of power whereby the directors or majority, who are in control of the company, secure a benefit at the expense of the company...and see Greenhalgh v Arderne Cinemas Ltd for an example of what was not a fraud on the minority UK company law
Forum selection clause
A forum selection clause in a contract with a conflict of laws element allows the parties to agree that any disputes relating to that contract will be resolved in a specific forum. They operate in conjunction with a choice of law clause which determines the proper law of the relevant contract. There are three principal types of clause: that all disputes must be litigated in a particular court in a jurisdiction agreed upon by the parties. A simple forum selection clause covering both the proper law of the contract and the forum for resolving disputes might read: “This contract is governed by the laws of England and any dispute shall be resolved by the English courts.”Where the clause chooses a particular jurisdiction for the resolution of disputes, it may do so either as an exclusive jurisdiction clause or a non-exclusive jurisdiction clause. An exclusive jurisdiction clause mandates that all disputes must be resolved by a particular court, whereas a non-exclusive clause confirms that a particular court may be used by the relevant parties, but does not preclude a party from commencing proceedings in another court if they wish to do so.
In many cross-border contracts, the forum for resolving disputes may not be the same as the country whose law governs the contract. And the contract may provide for a staged procedure for resolving disputes. For example: “1; this agreement shall be interpreted in accordance with the laws of England. 2. The parties shall endeavour to settle any dispute that arises by direct negotiation between their managing directors or similar senior executives but if direct negotiation does not result in a resolution of the dispute, either Party may require that it be referred to mediation in accordance with the CEDR Mediation Rules at present in force. 3. Any dispute, not settled by direct negotiation or by mediation shall be settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.” The choice of law stage in a conflict case requires the forum court to decide which of several competing laws should be applied to resolve the dispute.
In this, there is an important distinction to be made between a forum selection clause and a choice of law clause. As an application of the public policy of freedom of contract, the parties are free to nominate the proper law under which all relevant disputes will be resolved. If there is an express selection, this choice will be respected so long as it is made bona fide, i.e. the subjective intention prevails unless the purpose is to: evade the operation of some mandatory provisions of a relevant law, there was an element of fraud or duress or undue influence involved in the signing of the contract, or there was some other evidence of mala fides. But, if the parties do no more than nominate a forum, this is no more than an indication that they intend that forum's law to apply. There are many reasons why parties may select a forum: the forum has established significant expertise in the relevant areas of law, e.g. shipping, carriage by air, etc.. If the parties have selected a jurisdiction as the place for the resolution of a dispute, the implication is that the courts may apply their lex fori which includes their general choice of law principles.
Thus, in the ordinary course of legal events, the forum court may identify and apply a foreign law as the proper law. The majority of professionally drafted contracts will address both issues, contain clauses specifying both the forum and the law to be applied therein; the fact that the particular contract only specifies the forum therefore becomes revealing as implying that the parties intended to leave the choice of law issue to the forum nominated. Forum selection clauses have been criticised by a minority of courts as improper attempts to divest them of personal jurisdiction over the parties; because of this, some jurisdictions refuse to give effect to these clauses, declaring them to be void as against public policy. However, most jurisdictions now recognise and enforce forum selection clauses, so long as the parties were acting in good faith. Although most contractual clauses are enforced by way of either an award of damages for breach or by an injunction to restrain breach, the operation of jurisdiction clauses tends to operate at the interlocutory stage of a dispute.
The existence of a jurisdiction clause in an agreement will operate to enable a court to take jurisdiction in a particular matter, or may provide strong grounds for another court to decline jurisdiction. Such clauses are sometimes enforced against proceedings in foreign courts by use of an anti-suit injunction. Although it is theoretically possible to sue for damages for bringing proceedings in breach of a jurisdiction clause, examples are rare. In
Ebrahimi v Westbourne Galleries Ltd
Ebrahimi v Westbourne Galleries Ltd AC 360 is a United Kingdom company law case on the rights of minority shareholders. The case was decided in the House of Lords. Mr Ebrahimi and Mr Nazar were partners, they decided to incorporate as the business was successful and selling expensive rugs. Their store was in Nottingham, moved to London at 220 Westbourne Grove. Mr Ebrahimi and Mr Nazar were the sole shareholders in the company and took a director's salary rather than dividends for tax reasons. A few years when Mr Nazar's son came of age, he was appointed to the board of directors and Mr Ebrahimi and Mr Nazar both transferred shares to him. After a falling out between the directors Mr Nazar and son called a company meeting, at which they passed an ordinary resolution to have Mr Ebrahimi removed as a director. Mr Ebrahimi unhappy at this, applied to the court for a remedy to have the company wound up; the House of Lords stated that as a company is a separate legal person, the court would not entertain such an application.
However, they believed that as the company was so similar in its operation as it was when it was a partnership, they created what is now known as a quasi-partnership. Mr Ebrahimi had a legitimate expectation that his management function would continue and that the articles would not be used against him in this way. Based on the personal relationship between the parties it would be inequitable to allow Mr Nazar and his son to use their rights against Mr Ebrahimi so as to force him out of the company and so it was just and equitable to wind it up; the company was wound up and Mr Ebrahimi received his capital interest. Lord Wilberforce gave the following judgment. Soon after the remedy for unfair prejudice was introduced, which allows a court to order a minority shareholder to be bought out, rather than a company being wound up; this is found in the Companies Act 2006 sections 994 to 996. O'Neill v Phillips Unfair prejudice Robert Yalden, Business organizations: principles and practice, 2008, Emond Montgomery Publication.
Bribery is the act of giving or receiving something of value in exchange for some kind of influence or action in return, that the recipient would otherwise not offer. Bribery is defined by Black's Law Dictionary as the offering, receiving, or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legal duty. Bribery is offering to do something for someone for the expressed purpose of receiving something in exchange. Gifts of money or other items of value which are otherwise available to everyone on an equivalent basis, not for dishonest purposes, is not bribery. Offering a discount or a refund to all purchasers is not bribery. For example, it is legal for an employee of a Public Utilities Commission involved in electric rate regulation to accept a rebate on electric service that reduces their cost for electricity, when the rebate is available to other residential electric customers. Giving the rebate to influence them to look favorably on the electric utility's rate increase applications, would be considered bribery.
A bribe is the gift bestowed to influence the recipient's conduct. It may be money, rights in action, preferment, emolument, objects of value, advantage, or a promise to induce or influence the action, vote, or influence of a person in an official or public capacity. Many types of payments or favors can constitute bribes: tip, sop, skim, discount, waived fee/ticket, free food, free ad, free trip, free tickets, sweetheart deal, kickback/payback, inflated sale of an object or property, lucrative contract, campaign contribution, sponsorship/backing, higher paying job, stock options, secret commission, or promotion. One must be careful of differing cultural norms when examining bribery. Expectations of when a monetary transaction is appropriate can differ from place to place. Political campaign contributions in the form of cash, for example, are considered criminal acts of bribery in some countries, while in the United States, provided they adhere to election law, are legal. Tipping, for example, is considered bribery in some societies, while in others the two concepts may not be interchangeable.
In some Spanish-speaking countries, bribes are referred to as "mordida". In Arab countries, bribes may be called baksheesh or "shay". French-speaking countries use the expressions "dessous-de-table", "pot-de-vin", or "commission occulte". While the last two expressions contain inherently a negative connotation, the expression "dessous-de-table" can be understood as a accepted business practice. In German, the common term is Schmiergeld; the offence may be divided into two great classes: the one, where a person invested with power is induced by payment to use it unjustly. The briber might hold a powerful role and control the transaction; the forms that bribery take are numerous. For example, a motorist might bribe a police officer not to issue a ticket for speeding, a citizen seeking paperwork or utility line connections might bribe a functionary for faster service. Bribery may take the form of a secret commission, a profit made by an agent, in the course of his employment, without the knowledge of his principal.
Euphemisms abound for this Bribers and recipients of bribery are numerous although bribers have one common denominator and, the financial ability to bribe. According to BBC news U. K, "bribery around the world is estimated at about $1 trillion"; as indicated on the pages devoted to political corruption, efforts have been made in recent years by the international community to encourage countries to dissociate and incriminate as separate offences and passive bribery. From a legal point of view, active bribery can be defined for instance as the promising, offering or giving by any person, directly or indirectly, of any undue advantage, for himself or herself or for anyone else, for him or her to act or refrain from acting in the exercise of his or her functions.. Passive bribery can be defined as the request or receipt, directly or indirectly, of any undue advantage, for himself or herself or for anyone else, or the acceptance of an offer or a promise of such an advantage, to act or refrain from acting in the exercise of his or her functions.
The reason for this dissociation is to make the early steps of a corrupt deal an offence and, thus, to give a clear signal that bribery is not acceptable. Besides, such a dissociation makes the prosecution of bribery offences easier since it can be difficult to prove that two parties have formally agreed upon a corrupt deal. Besides, there is no such formal deal but only a mutual understanding, for instance when it is common knowledge in a municipality that to obtain a building permit one has to pay a "fee" to the decision maker to obtain a favourable decision. A grey area may exist. United States law is strict in li
A contract is a legally-binding agreement which recognises and governs the rights and duties of the parties to the agreement. A contract is enforceable because it meets the requirements and approval of the law. An agreement involves the exchange of goods, money, or promises of any of those. In the event of breach of contract, the law awards the injured party access to legal remedies such as damages and cancellation. In the Anglo-American common law, formation of a contract requires an offer, consideration, a mutual intent to be bound; each party must have capacity to enter the contract. Although most oral contracts are binding, some types of contracts may require formalities such as being in writing or by deed. In the civil law tradition, contract law is a branch of the law of obligations. At common law, the elements of a contract are offer, intention to create legal relations and legality of both form and content. Not all agreements are contractual, as the parties must be deemed to have an intention to be bound.
A so-called gentlemen's agreement is one, not intended to be enforceable, "binding in honour only". In order for a contract to be formed, the parties must reach mutual assent; this is reached through offer and an acceptance which does not vary the offer's terms, known as the "mirror image rule". An offer is a definite statement of the offeror's willingness to be bound should certain conditions be met. If a purported acceptance does vary the terms of an offer, it is not an acceptance but a counteroffer and, therefore a rejection of the original offer; the Uniform Commercial Code disposes of the mirror image rule in §2-207, although the UCC only governs transactions in goods in the USA. As a court cannot read minds, the intent of the parties is interpreted objectively from the perspective of a reasonable person, as determined in the early English case of Smith v Hughes, it is important to note that where an offer specifies a particular mode of acceptance, only an acceptance communicated via that method will be valid.
Contracts may be unilateral. A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other. For example, in a contract for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the seller's promise to deliver title to the property; these common contracts take place in the daily flow of commerce transactions, in cases with sophisticated or expensive precedent requirements, which are requirements that must be met for the contract to be fulfilled. Less common are unilateral contracts in which one party makes a promise, but the other side does not promise anything. In these cases, those accepting the offer are not required to communicate their acceptance to the offeror. In a reward contract, for example, a person who has lost a dog could promise a reward if the dog is found, through publication or orally; the payment could be additionally conditioned on the dog being returned alive. Those who learn of the reward are not required to search for the dog, but if someone finds the dog and delivers it, the promisor is required to pay.
In the similar case of advertisements of deals or bargains, a general rule is that these are not contractual offers but an "invitation to treat", but the applicability of this rule is disputed and contains various exceptions. The High Court of Australia stated that the term unilateral contract is "unscientific and misleading". In certain circumstances, an implied contract may be created. A contract is implied in fact if the circumstances imply that parties have reached an agreement though they have not done so expressly. For example, John Smith, a former lawyer may implicitly enter a contract by visiting a doctor and being examined. A contract, implied in law is called a quasi-contract, because it is not in fact a contract. Quantum meruit claims are an example. Where something is advertised in a newspaper or on a poster, the advertisement will not constitute an offer but will instead be an invitation to treat, an indication that one or both parties are prepared to negotiate a deal. An exception arises if the advertisement makes a unilateral promise, such as the offer of a reward, as in the famous case of Carlill v Carbolic Smoke Ball Co, decided in nineteenth-century England.
The company, a pharmaceutical manufacturer, advertised a smoke ball that would, if sniffed "three times daily for two weeks", prevent users from catching the'flu. If the smoke ball failed to prevent'flu, the company promised that they would pay the user £100, adding that they had "deposited £1,000 in the Alliance Bank to show our sincerity in the matter"; when Mrs Carlill sued for the money, the company argued the advert should not be taken as a serious binding offer. Although an invitation to treat cannot be accepted, it should not be ignored, for it may affect the offer. For instance, where an offer is made in response to an invitation to treat, the offer may incorporate the terms of the invitation to treat. If, as in the Boots case, the offer is made by an action without any