Business Law and Ethics: Case Study on Breach of Contractual Relations and Remedies

This report provides a case study on breach of contractual relations and remedies in business law and ethics. It covers the essential elements of a valid contract, possible remedies for breach of contract, and advice for parties involved.

Business Law and
Ethics

Table of Contents
INTRODUCTION ..........................................................................................................................3
Main Body ......................................................................................................................................3
Possible remedies available for Raymond..................................................................................4
If Samantha had paid £200 to Raymond three weeks prior is there any Difference in answer
and would Raymond agree to the same.......................................................................................4
The legal position if Raymond had requested a £400 payment from Samantha as full and final
settlement....................................................................................................................................5
Advice that can be given to Samantha........................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................6
Books and Journal.......................................................................................................................6

INTRODUCTION
Business law also popularly termed as Commercial law is a set of rules and regulations
used to manage business activities and transaction system. As it helps in managing transaction
and activities of business, it has direct relationship with trade, industry and commerce and
include all the laws applicable such as insurance act, Company law, intellectual property right,
contract law, etc. Contract law is a set of rules and legislation which are enforced between parties
who are entering into a valid contract and also contain regulations in which concerned parties are
bound to follow in order to frame a proper contract(Fotaki, 2020). To establish a valid contract a
contract should contain various essential elements such as an offer which is accepted by other
party, a legal objective and consideration, free consent, etc. On the other hand, business ethics
are set of rules and regulation which governs the behaviour of individual and include arguable
matters like discrimination, equality, etc. and ultimately helps in increasing productivity by
raising moral of employees. An ethical company which works on business ethics would always
maintain the contractual relations. This report contain a case study to explain the breach of
contractual relations and its remedies.
Main Body
Contract is an agreement which is enforceable by law(Prasad, Kumar and Kapoor, 2020).
It is a legal agreement with essentials of contract held between two or more parties. In addition it
can be stated that “All contracts are agreements but all agreements are not contract”. There are
various essential elements to enter into a valid contract such as offer and acceptance of
agreement, willingness to establish a legal relationship, free consent, lawful object and
consideration, etc. Consideration is an essential element to create a legal contract as no contract
can be established without any legal consideration and also both the parties should agree to enter
into a legal relationship. Contract law plays an important role in providing security and
confidentiality to the business against performance of contract as it contains remedies for the
breach of contract(Alderson and Morrow, 2020). Remedies which are available for breach of
contract are Sue for Damages, injunction, repudiation, etc.
In the given case, Raymond runs small consultancy firm related to taxation. Samantha is an
struggling artist and she enters into a contract with Raymond to draft a business account for a
consideration of £800 which she will pay after completion of work. But afterwards she denied to

pay £800 and proposed that she had only £200. Raymond admit to take £200 as complete
settlement of payment. Later Raymond come to know that Samantha's painting has been sold in a
very good price and decided to demand her remaining amount of £600.
Possible remedies available for Raymond
There are various remedies under contract law for the breach of contract like, Recession
of contract, in this remedy if a party who present the offer fails to fulfil an obligation necessary
to complete the contract and due to this the party refuses to perform the contract(Mantzaris,
2020). Sue for Damages, this remedy is a legal remedy which provide claim for compensation of
losses incurred due to broke of promise by another party. Repudiation, this remedy also known
as anticipatory breach where after entering into a contract the party refuses to perform assigned
task at time when it should be performed which is a basic breach of contract. Injunction, it is a
remedy in which the proposed person is curbed to do a particular act(Rendtorff, 2020).
Restitutionary Award, this is a award which is monetary in nature where court provide decision
according to the profit earned by defendant and not on the basis of damages suffered by plaintiff.
Specific performance, in this remedy court orders to the party to fulfil its obligation of contract.
Raymond can use these remedies in order to fulfil his demand.
If Samantha had paid £200 to Raymond three weeks prior is there any Difference in answer and
would Raymond agree to the same
In the above case where Samantha had paid £200 before three weeks to Raymond as full
and final settlement, Raymond has the option to accept or reject it. Once offer is accepted by
Raymond as full settlement it will cancel the consideration of original offer. This can be
understood with the concept of counter offer, if offer is made later which is a counter offer and
accepted by both parties as full and final payment than this counter offer will cancel the original
offer. If Raymond accept the offer then he does not have any right to demand remaining one in
future. The offer of £200 will be considered as counter offer and according to the contract law
counter offer cancels the original offer. On the other hand, if payment is made three weeks prior
of the date, then Raymond will understand the condition of Samantha and will not accept
proposal of Samantha and even he has the option to sue other party that is Samantha for
disagreement in the mid way. Raymond will also have the option to stop the work in between.

The legal position if Raymond had requested a £400 payment from Samantha as full and final
settlement
In this case after work has been completed by Raymond, Samantha gives a counter offer
of £200 to Raymond and Raymond requested to increase it to £400 which is a negotiation case
and will also included in counter offer. If Raymond negotiate then it means that he is ready to
settle in such amount and will not demand more that is the remaining balance in future. Now
Samantha has the option either to accept the offer or to reject the same. If Samantha accept the
offer then it will be considered as original offer as Raymond accept the amount of £400 as his
full and final payment. On the other hand if Samantha denies to pay £400 then Raymond can file
a case against Samantha and there are so many remedies available to Raymond which will be
provided by court of law.
Advice that can be given to Samantha
In order to prevent from such conflicts Samantha is advised to go in a written agreement
in a cautious way and instead of putting a proposal in last she should clear it in starting of the
contract only. As in the given case Samantha made a contract for a consideration of £800 and
after completion of work she said she has only £200 which is very less but Raymond agree for
the same if Raymond denies for the same he has the option to sue Samantha which can put her in
trouble. She can stuck in a legal complications. Hence, she should be very careful in entering
into any contract and to avoid unnecessary judicature and to hold her reputation she should be
very precise while entering into a written contract.
In the present scenario in which Raymond wishes to demand for remaining £600 from
Samantha as he come to know from the newspaper that she sold her paintings at a very good
price. In this case here applies for doctrine of estopple which states that promise is a legal
situation implemented by law even with no formal consideration between parties. In contract
law, no contract exist without consideration but this doctrine is implemented in contract act,
although it is not executed as contract law. This doctrine is introduced to protect the right of the
aggrieved party(Sferrazzo, 2020). In case of Central London Property Trust v. High Tree House,
court states that if any promise is made between the parties no matter if the consideration is
higher or lower than the actual amount than that will be bind on both the parties. Same is
applicable on case of Samantha in which Samantha offers £200 and Raymond agrees to fully
settle his account in £200. It works as a promise between the both applies the doctrine of

promissory estopple(Zhang, 2020). Samantha is not liable to pay any amount to Raymond and
even Raymond had settle his account earlier so he is not entitled to demand the remaining
account just because she is earning well now.
CONCLUSION
The concept of business law is very broad in nature and include contract law which is
essential to carry out any business. Every business is based on contract between various parties
and it is essential to secure the business by fulfilling contract. From the above it clears the
concept of business law and ethics which should be followed in business. Business law covers so
many laws in it among which is contract law. It provides various remedies in case of breach of
contract to increase confidentiality and security in business contracts. This is very clear from the
above case study about the various remedies available with Samantha and Raymond to protect
their right of contract. The report also provide for some situations in which there can be different
actions by both the parties and provide knowledge of different remedy in different situations.
This also contain the recommendations to both the parties to avoid such type of future conflict.
REFERENCES
Books and Journal
Fotaki, M., 2020. Book Review: Disturbing Business Ethics: Emmanuel Levinas and the Politics
of Organization.
Prasad, N., Kumar, V. and Kapoor, S., 2020. Business ethics: A decision between right or
wrong. Journal of Public Policy & Environmental Management, 1(1), pp.20-30.
Mantzaris, K., 2020. Business Ethics and Rational Corporate Policies: Leveraging Human
Resources in Organizations. Business Expert Press.
Rendtorff, J.D., 2020. Totalitarianism, Practical Reason, and Judgment: Philosophical
Foundations for Business Ethics and Philosophy of Management. In Moral Blindness in
Business (pp. 203-231). Palgrave Macmillan, Cham.
Sferrazzo, R., 2020. Towards an Agape-Based Organization: Does It Make Sense to Apply Civil
Economy to Business Ethics?. Business and Professional Ethics Journal, 39(2), pp.225-
251.
Zhang, K., 2020. The History and Reality of the Market Failures Approach to Business
Ethics. SPICE: Student Perspectives on Institutions, Choices and Ethics, 15(1), p.5.
Alderson, P. and Morrow, V., 2020. The ethics of research with children and young people: A
practical handbook. SAGE Publications Limited.