Business Law and Ethics: Breach of Contractual Relationships and Remedies

This report discusses the importance of business law and ethics in running a business, specifically focusing on breach of contractual relationships and the remedies available. It explores the essential elements of a contract, the remedies provided by contract law, and the concept of promissory estoppel. The case scenario of Raymond and Samantha is used as an example to illustrate these concepts.

Business Law and
Ethics

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business law is a body of rules and regulation which is being embodied for the conduct
of people associated with business as it covers all the laws which are mainly important for
business. It covers all the laws which are important for running a business like Contract law,
IPR, Property law, Company law and many more. The Contract law is basically a law being
enforced between the parties before they enter in a valid contract it covers all the rights ,
regulation and conducts of the parties and all the legislation bound the parties to follow proper
rules to frame a proper contract (ALPA, 2019). Whereas Business ethics is the study and practise
of appropriate business policies, it mainly includes all the subjects which covers the controversial
matters such as corporate social responsibility, corporate governance, discrimination, fiduciary
responsibility and many more. All these ethics are used to increase the productivity in business
and also raises the morale of employee. This report deals with breach of contractual relationships
and remedies.
MAIN BODY
Contract law is a legally binding agreement between the parties and if a person is willing
to enter in a contract then they will have to follow certain essentials of contract without which a
contract cannot be enforced these includes offer by one party as for entering in a contract there
must be a offer made by a party to the other, acceptance by the other party as when offer is made
then the other person will have to accept that for entering in contract,consideration as no contract
can be made without any consideration so there may be a proper discussion on it and intention to
create a legal relation as parties must be ready to get bound in the law (Harper, 2017). Contract
law has always played a crucial role in business as they keep the business secure by framing
proper agreements between the parties and it gives security and confidentiality to the investors as
they have all the remedies for any breach in any contract which bind it towards working in a
smoother way and thus business deals with all the governance law creates trust in customers
too. In order to get engaged in a contract the aggrieved parties must fulfil all these essentials as
rem edies can only be claim with it. The remedies given under this act are specific performance
of contract, damages, injunction orders and many more.
Under this case scenario, Raymond runs a small consultancy firm related to taxation.
Samantha and Raymond enter in a contract in which Raymond agrees to draft business accounts

for her for which Samantha will pay £800 for that work as a consideration after completion of
the work. After completion of the work Samantha denied to pay £800 and said that she can only
afford to give £200. Raymond reluctantly accepted that offer for £200 as a full settlement. Later
on, When Samantha's paintings begin to sell at good prices Raymond wishes to recover that
remaining balance of £600.
As Raymond and Samantha entered in a valid contract there were all the essential
elements being fulfilled by them as there was a offer and an acceptance from both the side, they
had agreed on a consideration of £800 and there was legal intention so they were bind by a legal
obligation between them.
Contract law provides certain remedies like, Repudiation it is also known as anticipatory
breach where one party denies to perform the work even when they had entered in a contract this
is basically a breach of contract without any conditions when it was supposed to be done.
Recession of contract in which if a party entered in a contract does not fulfil any obligation then
the other party has a right to refuse for the performance of contract (Varney, 2020). Sue for
damages it is a legal remedy where if one party broke the promise and which made the other
party to suffer loss then they claim for compensation which is being caused by the damages
incurred. Specific performance it is a equitable remedy available in all discretion of the court
where they order to the party to fulfil its contractual obligation. Injunction in which a court order
by restraining a person to do any particular act. Restitutionary awards is also a monetary remedy
it is being given on the basis of defendants gain not on the loss suffered by the plaintiff here
court marks there decision on the basis of defendants conditions and gains. As explained above
the remedies available for Raymond is damages and specific performance of contract (Jones, and
Sufrin, 2016).
If Samantha had paid £200 three weeks earlier then there will be a counter offer from her
side and Raymond shall have a preference whether to accept it not. As counter offer is basically
an additional offer being made during the negotiation of a contract once the counter offer is made
it will destruct the original offer and the parties will have to deal with the new one. In case of
Hyde v. Wrench, the court held that when a counter offer is made it will destroy the original offer
and it will no longer be available to the party to accept it (Pistor, 2020). In this scenario the
counter offer made by Samantha will gave a choice to Raymond to accept it or not and Raymond
will not choose a offer at lower consideration.

In case when Raymond had requested £400 payment from Samantha as full and final
settlement, there will be a different legal position as an original offer is made by Raymond of
£800 and then Samantha has counter offer him for £200 and if Raymond has made a counter
offer for £400 as there full and final settlement then the situation will change as Samantha will
have to see whether she wants to accept that offer or not, if she constitute or agrees then it will
frame a contract and all prior offers will be cancelled and parties will deal with that new offer but
if Samantha refuse for that offer then Raymond will have a right to claim for breach of a contract
as Samantha has agreed on the prior offer and Raymond may file a breach on that note.
In a scenario where Raymond wishes to claim for the remaining balance of £600 from
Samantha just because he has seen in the newspaper that she earned well as her paintings were
sold in £20000. Raymond had already accepted the offer made by Samantha and was agreed
with full and final settlement from that so there is no reason to claim for that amount and there
applies doctrine of promissory estoppel which states that promise is a legal conditions which is
enforced by laws even when there is no formal consideration being made between the parties this
doctrine is made to protect the right of an aggrieved party and is enforced in contract law even
when it is not executed as a contract law. This doctrine was been used by the court in Central
London Property Trust v. High Tree House, Lord Denning held that if there is a promise
between the parties then even the promise to accept small amount instead of large sum shall be
binding on both the parties even when the promise is made without any consideration (Kang,
2016). And on that account Samantha will not be held liable to pay £600 as Raymond has
already accepted £200 as full and final payment he shall not be liable to get the sum on the
grounds of promissory estoppel.

CONCLUSION
It is concluded from the report that Business law provides a proper rules for running a
business and explains the legal formalities to be kept in mind while indulging in any business
activity. Contract law gives all the laws and agreement embodied between parties and there
conditions to be fulfilled before entering in a valid contract and helps in business by creating
confidentiality between the parties or the workers over there, Whereas business ethics implies all
the policies on the ethical behaviour and social responsibility to be followed and to be kept in
mind before running a business. It implies that the contractual obligation in the parties are
binding so that there may not occur any breach of contract. And here the law provides a remedy
for this case scenario by applying a promissory estoppel in the parties as the promise has been
made earlier.

REFERENCES
ALPA, G., 2019. The Effect of Fundamental Rights on Contract Law in a Comparative
Perspective. European Business Law Review.30(2). pp.301-318.
Harper, J., 2017. Contract Law. Legal Magazine.
Jones, A. and Sufrin, B., 2016. EU competition law: text, cases, and materials. oxford university
Press.
Kang, S.Y., 2016. Rethinking Self-Dealing and the Fairness Standard: A Law and Economics
Framework for Internal Transactions in Corporate Groups. Va. L. & Bus. Rev. 11. p.95.
Pistor, K., 2020. The code of capital: How the law creates wealth and inequality. Princeton
University Press.
Varney, E., 2020. The UN Convention on the Rights of Persons with Disabilities and English
Contract Law: A Tale of Unfinished Bridges?. King's Law Journal, pp.1-23.