Business Law and Ethics: Contracts, Court System, and Enron Case Study

This document provides an overview of business law and ethics, focusing on contract law, the court system in the English legal system, and the Enron case study. It discusses the concept of binding contracts, various remedies available for parties, and the importance of ethical corporate governance.

Business Law and
Ethics

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Contract law and description of all blue prints of a contract.......................................................3
2. Court system in respect of English legal system and types of court each part needs to follow
.....................................................................................................................................................5
3. Analysis over binding contract that is between following peoples such as Amy, Eleanor,
Olivia and Hillary........................................................................................................................6
4. Various remedies available for each party...............................................................................7
TASK 2............................................................................................................................................8
Overview on Enron Case study...................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business ethics and law are the major elements of the company growth and success.
However, business law comprises different regulations and rules that guides how to establish and
operate a business firm. It comprises all the legislations and laws that administers how to start-
up, manage and exist any type of business in precise manner. On the other hand, business ethics
is the process of implementing right practices and policies of the business to deal with
controversial topics. There are various issues that arises during discussion of ethics such as
trading, corporate governance, social accountability, fiduciary accountability as well as
discriminations. This brief study is classified into two tasks wherein one task will provide high
understanding about different laws i.e. contract law, different blue prints of contract. It also will
explain about court system in the context of English legal system.
It also defined logical recommendation to all parties about court response to follow. It
will explain suggestion in the context of Hilary as to whether binding contracts between other
parties and herself and will discuss over different remedies accessible to Amy, Olivia and
Eleanor.
TASK 1
Contract law and description of all blue prints of a contract
Contract law is the part of law that can be governed, formed and interpreted agreement in
the form of exchanging goods, services, properties and resources. Agreement refers as a law is
made between two or more than two parties or corporations, wherein there is a commitment to
do something extempore which will bring mutual benefits or gains, is legally binding. Contract
law is the major element of lots of business dealing and contracts between parties which binds
them to follow all rule and regulation (Al Junaibi, 2020). This contract law usually governs
legality of contract which made between two and more than two corporations or individuals
wherein exchange of procedures takes place. there are various companies which works in
collaboration in order to gain advanced benefits. So, they take support of legal contracts because
these are governed by government and builds trustworthy relationship between two parties.
There are some examples of agreement ventures such as employment agreements, bills of

discount, exchange of product or money and purchase orders. A contract is comprised several
key steps or components that are known as a blue print-
 Offers
It is the prime component of business contract or agreement. An organization can have an issue
from existing offer which can be treated by putting commitment that helps in accepting business
deals. In other word, when any business looks for to sign with other business then they should
offer something valuable and precious so that highly interested employer or company can be
stated their expectation and preferences (Alder and Wilkinson, 2016).
 Acceptance
It is another element of the business contract blue print. According to this element, when
someone has decided to accept best offer of others. It is a term that defines procedure of agreeing
offer of other party who is highly interested in it. It is a type of proposal that made by business
owner which is needed to accept by another owner to form a legal contract between them. There
is a great example of given case study that defines acceptance component. Eleanor has disagreed
with the contract to pay £15,000 instead of this she said that she will like to pay £13,000.
 Consideration
According to this element, before making any legal business contract, there should be some
amount of this element i.e. object, payment and services that means both parties requires to pay
something in the contract either product or anything (Dibra, 2016). This element is effectively
defined by given case study wherein there is no transaction or exchange of goods or services
through which it can be understood that there were no contractual deal takes place between them.
 Legality of subject matter
There is various type of contracts that are generally formulated with legal purpose in the same
time statutory regulations which are considered by both parties or employers so that contract can
become legal. However, it is considered one of the major elements of the contract blue print. In
the given case study, there was no legal contract between Hilary and other parties have been
done in the form of payment exchange of goods or services.

 Contractual in intent
To make valid agreement between two parties needs to being highly interested in purchasing
products or services which offers by other parties. In the case of Hillary, he has intention to sell
all gallery paintings but Amy and Eleanor were not interested to buy them.
 Contractual capacity
This element stated that one party should have contractual ability before entering into agreement
like Hillary and others. While Amy and Eleanor should have capability to pay specified amount
which was developed by Hillary in the given case study.
2. Court system in respect of English legal system and types of court each part needs to follow
English legal system is the best for upcoming legal study because it has helped in getting
better solutions of the conflicts which arises between two parties. It can be interpreted that there
are three types of legal systems in UK i.e. Scotland, Wales and England, and Northern Ireland.
House of the Lords and House of the commons are the legal structures of United Kingdom. To
become member of the house of common the person requires to be elected at the same period
when there are specified people who are terminated from membership based on the status and
professions. There have more than 650 member of parliament and each voter must have single
vote so that individuals can gain highest number of votes that can be termed to be MP. While
house of the lord is neither elected nor representative body (Edwards, 2020). So, prime minister
advices to appoint people for the House of the Lord by monarch and it posses’ 800 peers.
However, common law system is majorly used in England and Wales because it is accountable
for passing different legislations and formulates precedents by applying case laws. At the end
these laws are practised in country by passing in parliament which involves Monarch i.e. House
of Lords and House of Common. Judiciary is mainly responsible for managing and controlling
court system and case laws so, it is properly isolated from parliament of UK. Monarch is a head
state and its responsibilities or roles that are described and concise by convention not by
president.
Types of Court

Senior or Supreme Court is majorly accountable for common law as well as legal system
of Wales and England.
Civil law
For instance, if any person or individual’s sensations that it have been cheated or
something civil wrong is going to be conducted in that state, it is free to directly approach court
for asking justice. It can be understood that there are more than 250 country court around
different locations which rarely deals with claim rather than £25,000 and £50,000 that have due
to injury and harm from other individuals. However, high valued cases are handled by high court
through single judge for the justice and better decision to the people. The person who claims for
civil case is called Claimants While other party is known as defendant. In most of the cases,
claimants become successful in winning case in that state dependents have to pay specified
amount of money to the claimants for the loss which it has beard (Galukhin and et.al., 2017).
From the above discussion and analysis, it can be illustrated that there are various parties i.e.
Olivia, Eleanor, Amy and Hilary can directly approach to the country court for resolving their
conflict issues associated with contractual agreement (Tzafestas, 2018). In a case if they are
agreed or happy with the civil court decisions then they have alternative option to go appeal
court (Civil division), after that if they are not agreed with the decision of appeal court then they
also have another chance such to approach supreme court which is final decision-makers and
resolve disputes.
3. Analysis over binding contract that is between following peoples such as Amy, Eleanor,
Olivia and Hillary
From the above case study interpreted that Hillary advertised for selling it’s printing
press at £15,000 cost so Eleanor said that he wants it in £10,000 but Hillary was not agreed and
stated that it would trade last at £13,000. Thus, there were verbal commitment, not any legal
agreement between Eleanor and Hillary that it would make bought of printing press at rate
£10,000 or £13,000. So, it can be interpreted that there is no binding agreement between Eleanor
and Hillary to make payment or have purchased printing press.
On the other hand, in case of Amy, Hillary has desire to sell its office computer at
minimum amount like £1000 and Amy agreed to buy it at specified amount of money. So,

binding contract developed between Hillary and Amy because they will like to sell and buy
computer office at defined rates. But she faxes message and stated that ignore the arrived
message before delivering that brings cancellation of agreement which made between two
parties.
In last case there was no legal agreement or relationship between Olivia and Hillary as
she stated that she will sell its valuable painting that made by Trupter at only £1to the first
customer at initiation of sales. But when Olivia enters then Hilary have been sold her. therefore,
it denotes that there were no binding contracts between Hilary and Olivia because Hilary can
easily sell her painting to others who have come first at the stall for buying purpose (Hosseini,
2016).
4. Various remedies available for each party
There are numerous remedies exists that can be applied by each party to resolve their
presented issues that can be interpreted as follows:
Recession of court
This remedy stated that in a case if individuals are not enabled to accomplish obligation
then others have chance to disregard its performance. As same case with three above discussed
case of the clients that are Eleanor, Amy who have not followed obligation to pay defined
amount to Hillary so, she also cannot sell her printing press to them. It is similar case for the
Olivia as well such as if Hilary has sold her painting to other person then Olivia does not have to
pay £1 as well.
Sue for damage
If there is no break of contract between Olivia, Hilary and Eleanor then there is no need
of remedies because Hilary has contract with Amy so it has to pay some amount. Amy have to
pay high cost to Hilary if it already had made any kind of expense to make delivery of product or
services to the final user. Expenses or damaged creates conflicts issues between two parties that
can be resolved by making payments to recover the expense or damage (Huxley-Binns, Martin
and Frost, 2017).

TASK 2
Overview on Enron Case study
The Enron Corporation is well-known global corporate scandal whereas reporting of
financial situation has been demonstrated by planned accounting fraud and violated ethical
corporate governance within company presenting wrong business ethics. Showing wrong
accounts and financial functional records are the major factor in the accounting functional
performance avenue. The case stated that Enron business engaged in market accounting due to
this it received exchange commission approval in 1992 and official US securities which assists
businesses to value their financial accounting situations which are based on how growth of
numerous measures can take place (Knapp, Crystal and Prince, 2019). Enron have used wrong
methods of accounting to maximize profits, misleads various shareholders and investors within
company in the competitive market. This scandal is widely reported that raised question over
different accounting practices which already have been violated and also on strong corporate
governance within business in market for long period (Enron Case study, 2016). Ethical
corporate functional ethics are extremely essential defines as goodwill enhancement standards
and supports to develop effective goals continuously for enhancing scope of profitability.
To practice business ethics in day to day operations has been created one of most
important growth factors which makes company to have better functioning in the business
market with wide flexibility synergy of innovation and makes workplace transparent that
encourages stakeholders to give high performance in the business as resulted achieves positive
synergy. The main objective of corporate governance is to improve values and protects all
stakeholder’s goodwill by enhancing level of performance scenario and for accomplishing larger
goals and objectives functionally projected accordingly diverse functional paradigms. Enron
scandal portrayed attention to corporate fraud and accounting as its shareholders have lost
estimated 74$ billion in past 4 years that led up to bankruptcy and individuals have lost billions
in their pension benefits whereas organization was indulged in illegal business practices and
found fraud because there were using unethical parameters. However, Scandal is well-known
example of wilful corporate fraud and corruption whereas it highlighted under question of varied
accounting practices as well as activities which were adopted within supervision of lots of
corporations in United State and was factor in enactment of Sarbanes-Oxley act of 2002. In

further examination of report found out that Enron dishonoured rules while functioning different
operations of business (McGowan and Buttrick, 2017). Bankruptcy examiners report highlighted
various avenues for the criminal investigators who are seeking for leading case that organization
is demonstrating official partnership books. It already has been deceiving various shareholders
and stakeholders to work on different paradigms for achieving stronger working practice.
However, lower level employees were influenced to invest in company’s stock for their
retirements savings just before it, organization collapsed such as it won $85 million statement
through workers functioning but it has reduced level of services. Governance of ethics can be
managed within four parameters such as purpose, people, performance and process which
supports to create new goal avenues of ethical demonstration of different business services.
Corporate governance techniques i.e. reassurance of stockholder engagement which displays
functional paradigms and brings higher collaboration of ethics functioning by permitting fairness
of all information between stakeholders (Menezes, 2016).
Sarbanes Oxley act of 2002 is called as Public company accounting reform whereas
investors protection fundamentals and corporate responsibility for developing tools with fair
goals and corporate accounting auditing for achieving stronger functional activeness. The main
objective of the act was to fix auditing parameters and fix auditing of US public organizations
which involves in the performance measure avenues and regulate business firm’s corporate
governance (Mik, 2017). However, Sarbanes Oxley act is widely known as highly informative
technique and new security control and uploads different financial issues for high performance
objectives and goals. Public companies must be consisted within its performance standards as
well as regulates accounting firms that audit organizations must follow range of legal formalities
to stand organization functional competitive performance metrics. So, Oxley Act is considered
one of the most innovative technique that practised to analyse compliance with the act IT and
security controls and uploading different financial issues for stronger performance metrics with
stronger avenues. SOX Act concentrated on major ethics of corporate so it has developed auditor
as watchdog, within public organizations wherein it will focus on inspection, investigational
objectives and goals and analyse transparency of goals with corporate governance goals. It
prohibits public companies or accounting companies to do unethical business practices for
private gain. SOX act protects employees in the company which reports fraud information and

analyse court fundamentals against companies as well as allows employers to change rules and
regulation under which business operates for the stakeholders and shareholders (Moon, 2017).
Company’s employees are allowed to report against all functional parameters related to
safety and health administration factors in that state, SOX act takes effective actions against
employers if any employee filed about safety measures. However, financial condition plays
significant role under high integration forces of best quality metrics whereas Enron fraud scandal
has highly dishonoured this act such as company’s financial report shown quite fair, systematic
and incredible planned accounting fraud to mislead potential investors and business in the
competitive market and for working on larger aims effectively (Partington, 2019). However,
daily meeting organizations and transparency paradigms shall be practised within organization
goals, operations for functional stability which further improves new relative paradigms as well
as strengthening new developed goals. SOX act has been become one of the most important act
in UK’s business law which communicates diverse workforce actions under law.
Apart from this, there have some technical fundamental goals and objectives relatively develop
onto wide arena so that productively can strong working goals as well as workplace for
development of goodwill (Rabinovich-Einy and Katsh, 2017). Corporate governance plays
effective role in business to stand over commitment and trustworthy business platform with
internal and external stakeholders for achieving new benefits and stay long in the business
market. Enron company were misleading information of different financial information of the
report and for attracting potential shareholders and investors have been practised wrong business
practices such as larger business profits and effectively achievement of governance ethics which
proposed on larger objectives. Business law unable to bring high growth in the business
functioning at minimum time but it develops good brand image in the business market through
which company can generate high revenue and profit benefits in its business (Scheuch and Fink,
2017). With the Enron Case study, It can be understood that business ethics are highly essential
for the business success because it directs us to keep on right direction while operating business
in the business market. Company must communicate fair goals, vision and financial fundamental
information under the SOX act then it enables to improve market goodwill as well as standards
of working paradigms. This case has been become one of the most important paradigms and
high-profile business law violation case whereas goals and Enron company have been violated

working efficiency of goals and also created new competitive scope among different functional
prospects (Enron Scandal: The Fall of a Wall Street Darling, 2020).
CONCLUSION
From the above discussed essay, it has been summarized that for legal contractual
relationship there must be developed agreement between two parties for purchasing and making
payment of products at specified price. It can be illustrated from the above analysis that all such
remedies i.e. sue for damage, recession of court etc. can be practised for avoiding conflict and
complication between specified parties. So, wide range of laws have formulated by government
to protect interest of business man and consumers who are involved in purchasing and selling of
products and services. This report has been summarized Enron company case study.

REFERENCES
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International Conference on Contemporary Education, Social Sciences and Humanities
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Hosseini, S.B., 2016. The Lesson from Enron Case-Moral and Managerial
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Menezes, A., 2016. Business Ethics and Its Importance in Banking Industry. International
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Moon, C.J., 2017. Economics and Ethics. Applying lessons from ENRON to the VW emissions
scandal.
Partington, M., 2019. Introduction to the English Legal System 2019-2020. Oxford University
Press, USA.
Rabinovich-Einy, O. and Katsh, E., 2017. The New New Courts. Am. UL Rev. 67. p.165.
Scheuch, R. and Fink, J., 2017. Law versus Ethics.

Tzafestas, S.G., 2018. Ethics and law in the internet of things world. Smart cities. 1(1). pp.98-
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Online
Enron Case study. 2016. [Online]. Available Through: - <https://www.applied-corporate-
governance.com/case-study/enron-case-study/>
Enron Scandal: The Fall of a Wall Street Darling. 2020. [Online]. Available Through: -
<https://www.investopedia.com/updates/enron-scandal-summary/>