Business Law and Ethics: Contracts, Court System, and Enron Scandal

This document discusses the concepts of contract law, court system in relation to the English legal system, and the Enron scandal in relation to ethical corporate governance and the Sarbanes-Oxley Act of 2002. It explores the definition and elements of contract law, advises on court action for different scenarios, examines the remedies available for breach of contract, and discusses the Enron scandal and its implications for ethical corporate governance.

Business Law and Ethics

Table of Contents
MAIN BODY...................................................................................................................................3
PROJECT-1.....................................................................................................................................3
Following question is to be answered .............................................................................................4
Define contract law and describe all the blue prints of a contract..............................................4
Explain the court system in relation to the English legal system and advise the parties above
which court action to pursue.......................................................................................................4
Advise Hilary as to whether binding contracts exist between herself and each of the following
people: Eleanor, Amy and Olivia................................................................................................5
Explain and discuss the various remedies available to the parties..............................................6
PROJECT-2.....................................................................................................................................6
Discuss this case in relation to ethical corporate governance and the Sabane-Oxley Act of
2002. ...........................................................................................................................................7
CONCLUSION..............................................................................................................................10
REFRENCES.................................................................................................................................11

INTRODUCTION
Business law and ethics are those laws which makes formation of an organization
possible with handling environment of workplace. These laws are concrete in nature which
makes legal structure to be permanent and makes formation of certain guidelines that results into
making an organization gain sustainability within an organization. Ethical laws are those set of
rules which makes discipline to be maintained within workplace of an organization. Business
laws are those kind of laws that has been helping an organization to establish itself in legal
manner. Such laws results into forming of a framework that helps an organization to achieve
goals and objectives in effective manner. Scope of these laws are very wider as they deal with
various aspects that is related to business. Nature is dynamic as they deal elements involved in
forming of business. This file is divided into two parts and they are related to contract law,
corporate governance and SOX Act 2002. First part of the file is based on case scenario and
questions has to be answered regarding it. Second part deals with case study and its relation with
corporate governance and SOX Act 2002.
MAIN BODY
PROJECT-1
Case scenario: Hilary advertising is an printing press that is specialised in trade journal
and charges £15,000. Eleanor offered Hilary £10,000 for purchasing it. In answer to this Hilary
wrote at the post saying that she is going to accept £13,000. This is heard that nothing further
from Eleanor, Hilary has to write against the saying over accepting the offer of £10,000. Eleanor
says she no longer approves that printing press exists. Hilary wrote to Amy offering sales of an
office computer £1,000. Morning an letter is being received by her and Amy wrote over Hilary
which says over agreeing to buy at asking rate. After the letter is being posted before doing
delivery and Amy changed her mind sent a fax stating ignore the letter that come. Hilary decided
to do summer sale to her art gallery (Silver, 2020). Long notice was put over windows of salary
that state valuable painting by Trumpeter, a famous artist, would be available for only £1 to the
first customer who came into the gallery at the commencement of the sale, together with a free
signed print of another Trumpeter painting. Olivia waited outside the shop for two days before
the sale started to be sure of getting the painting, but as she entered the shop, Hilary told her that
the painting by Trumpeter was no longer for sale.

Following question is to be answered
Define contract law and describe all the blue prints of a contract
Contract laws are those laws which helps in forming of agreements in order to make
them valid within the eyes of law. Also these laws help in making an organization from strong
relation with parties that have come into contract. These laws also helps in providing legality to
an agreement which makes it an valid contract. In other words such laws are there to provide
rules and regulation that makes easy over financial activities with other agreement formation.
Also these laws makes certain guidelines that is binding to both the parties and makes
explanation of rights, duties that has to be followed by parties in proper way. A contract can take
place regarding exchange of goods, services or promise that has to be made between parties. For
providing justification over contract law an statement is given that states “ an agreement can be a
contract but a contract cannot be considered as an agreement”.
An contract can be oral and written which it can be taken place over a promise made that
need not be written. Elements are there which makes an contract to attain validity these elements
are offer, acceptance, consideration and legality. Offer means ideas on basis of which an contract
has to be formed. This is proposed by one party. Acceptance means accepting the offer that has
been proposed by a party. Consideration means discussing contracts in detail and all guidelines
related to it. Legality means that contract is formed over legal basis activity of contract should be
legal within eyes of law (Sholla, Naaz and Chishti, 2017).
Explain the court system in relation to the English legal system and advise the parties above
which court action to pursue
Legal system of UK consists of various laws that deal over aspects related to society. It
covers almost every crime or wrong that is being happening within a country. Laws in UK has
been formed to deal with various disturbing elements existing in a country. In order to make sure
that laws are being applied and followed in appropriate manner judicial system has been formed
that seeks over analysis of law. In this Supreme Court is considered to be highest court of appeal.
Then comes High court divided into three parts Queens bench, court of appeal and family court.
In Queens bench criminal cases are handled, in court of appeal civil cases are handled. Then
comes family division that deals with family and marriage related issues. Then comes bounty
courts which deals with all cases that has been transferred from lower court to it. Bounty courts

are there which handle a case at first instance and is part of lower courts. Various other courts
exists in the judicial system to control crime. Still laws in UK are complex and legal system
needs to improvise laws to make them compatible with modern laws.
In the given case scenario there has been an contract laws which is found as the main law
applicable to it. Contract law falls under the category of civil wrong which means that they are
wrong that is civil in nature. As this case covers contract laws as the main issues so civil court is
having jurisdiction in it. Under Hight court Court of appeal division is going to handle
proceedings related to case.
Advise Hilary as to whether binding contracts exist between herself and each of the following
people: Eleanor, Amy and Olivia
Binding contract is considered to be that kind of legal agreements which exists between
two or more parties and is legally enforceable. An contract should be in both written an
unwritten form. There should be an legal activity that has been taking place within contract and
intention to perform contract should be legal. Relevant case law related to this is Partridge v
Crittenden defendant place an advert within the classified section of an magazine that has been
offering through some bramble finches for sale. In this the offence was recorded under the bird
protection act was considered to sell a specific bird for sale. The person was charged with
offence and appeal against conviction. Court held that defendant's conviction should be quashed.
As the advertisement was an invitation to treat. Also literal rule has bee seek over to provide
validity to an contract (Okoye and Onyejekwe, 2019).
Another case law is that Heathcote Ball v Barry in this case submitting over binding
auction is required to be stated without any reservation. In this two Alan smart engine has been
considered as a worth of £14,000. Further the bid that has been presented was of £200 each.
The offer was reduced over selling price that was offered. In this breach of contract was bought
in as a action. Damages to be claimed is of £27,600. It was held by court that claimant is required
for damages. In this auction has taken place without reserve that makes unilateral or binding
contracts to be formed by accepting highest bid possible. In this court held that claimant is
entitled to cover damages with loss.
So, on considering the above mentioned scenario it can be observed that contract has not
taken place between the parties as there is invitation to treat that does not amount to be offer.

Explain and discuss the various remedies available to the parties
There are creation remedies that is available in order to claim over the breach of
contract . Such remedies are damages, repudiation, rescission, specific performance, injunction
and restitutory rewards
Damages these are considered to be that type of remedy which is available over breach
of contract. Damages are being awarded over the money in order to gain compensation over
providing with innocent party. Main purpose of damages in contract law that has been placed
over contract that has been formed.
Repudiation such kind of remedy is available for breach of contract that has been taken
place at the time of contract. It is available to breach over various condition.
Rescission Equitable remedy is available through direction judge. This has been there for
seeking over parties when they are in pre-contractual condition. This makes rescission available
to gain results through vitiating factor.
Specific performance this is considered to be an equitable contract over judges. This is
an order that has been passed by the court. In this requiring one party is there to perform
contractual obligation. Various contract is being performed with the parties but there should be
an obligation. In this courts reluctance over order and party willing to perform contract with
limited circumstances. These are given under certain circumstances that is of contract with equity
that is required (Lorne, 2016).
In the above case no contract has taken place that is why no remedies is to be used. Only
invitation to treat exists which is not considered to be a valid contract. In this scenario no
remedies has to be used because not binding contract exists. Invitation to treat means when an
offer has not been made only an invitation exists.
PROJECT-2
Case Scenario: This case study is based over Enron scandal that has been made
publicized on October 2001. In it bankruptcy has been made over Enron through corporation
which has its base in America, Huston, Texas and in this de facto dissolution of Arthur
Andersen. This is one of the five largest audit and accountancy of partnership within the world. It
is considered to be one of the largest bankruptcy reorganization within American history at that
time. It is considered to be one of the biggest failure within the history of world.

The organization was formed in the year 1985 by Kenneth Lay when the merger of
Huston Gas and Inter North is there. After various years Jeffrey Skilling has been hired and
developing staff of executive has to be done by him. He used it for accounting of loopholes,
special purpose is required to be hired with entities over poor financing through reporting. It has
been hiding billions of dollars within the debt which deals over poor deals to make failed project.
Chief officer Andrew Fastow and other executive misleading. Enron's board of directors and
audit committee on high-risk accounting practices and pressured Arthur Andersen to ignore the
issues. Enron shareholders is required to file suit of forty billion dollar and organization stock
price required to be achieved. The share has been reduced to less than a dollar by the end
November 2001. Also U.S Securities and Exchange Commission that has began within the
investigation and rivals Huston Competitor Dynegy that offered top make purchase of
organization at very low rate. This deal failed on December 2, 2001, Enron filed for bankruptcy
within the code of United states bankruptcy code. As Enron holds sixty three point four billion
assets that makes this scandal one of the biggest bankruptcy in US.
In this case Arthur Anderson was found guilty that has been found guilty over destroying
important documents that could have been proven to be very important form view point of
investigation that was conducted by SEC. This lead over making an license void that resulted
into effectiveness over closing the firm. Till the time judgement was passed by Supreme Court of
US the organization lost majority of its customer base which lead over ceasing operations.
Enron employee and shareholders has received limited return in lawsuits, despite of losing
billion the pension over stock prices (Harper, 2019).
After this scandal various kinds of loop holes has been analysed and it was found that
such kind of Fraud has been increasing at very large scale. This made urge of forming a new
regulations that able to control such frauds. One piece of legislation that was amended is the
Sarbanes Oxely Act 2002. This act consists of various kinds of penalties, rule and principals that
marked. This act was brought into action for attempting to defraud shareholders and protect
them. The act also increased the accountability of auditing firms to remain unbiased and
independent of their clients.
Discuss this case in relation to ethical corporate governance and the Sabane-Oxley Act of 2002.
Corporate governance: These are considered to be that kind of rules and regulations
that has been related over directing with controlling the activities of corporate business. Also this

helps in protecting of interest of shareholders, senior management executive, customers,
supplier, finances within government and community. This government basically focuses over
providing an framework that has been focusing providing stability that makes discipline to be
maintained. Since corporate governance has its roots well embedded within the corporate culture
it focuses over plaining action and creating internal control through performing measurements
through corporate discloser (Finkelstein, 2018).
Understanding Corporate Governance
These kind of governance is being brought into existence by setting of rules, controls,
policies and resolution that is being formed to give directions related to corporate behaviour.
These are there to form advises that is very important and has been impacting functioning of
shareholders possible. This has made evaluation possible through making validation by including
equity within it. An board of directors has been helping in forming of strategies that has been
involving valuation of assets. Direction of business integrity is been given by the directors. An
good governance makes formation of trust possible within the investors and community. Good
governance always promote validation that has been creating opportunities for participating in
market. In communicating corporate governance is one of the most key component over building
relationship with community and investors.
Sarbanes-Oxley Act of 2002: This act was passed by the US Congress on 30th July that
has been helping in protecting investors through fraud that makes reporting of corporation
possible. Also the act deals with frauds and finances which has made reporting over corporation
possible. SOX Act of 2002 has been formed mainly to deal over regulating reforms that has
made regulations and amendment to be imposed within corporate culture. This act has been
formed for introducing those rules and regulations that has made strict reforms. Also policies
with rules has been formed and sections has been introduce to promote more positiveness dealing
over frauds. Further this act has been able to control frauds in better manner that has helped in
maintaining confidence within the employees and build trust over them. This has been dealing
with issues that helps in creating trustworthiness within corporate finances that has impacted
regulations and standards over decades (Goodarzi, Salamzadeh and Salamzadeh, 2018).
Understanding the Sarbanes-Oxley (SOX) Act
The rules that has been formed over enforcing policies that has been dealing over
outlining various provisions which has made amendment over supplement. The laws that were

existing has enforced while dealing with amendment and supplement. Existence of law was
required because the earlier act was dealing over basic riles and regulations. Then enforcing of
Security Exchange Commission. Under this act four principals has to be formed which makes
this act to be an concrete act and they are mentioned as follows:
1.Corporate responsibility
2.Increased criminal punishment
3.Accounting regulation
4.New protections
The Sarbanes-Oxley Act 2002 is one of the most complexed and lengthy form of
legislation. These are three important provisions that has been developing within the act. These
sections has been explained as follows:
Section 302 of the SOX Act of 2002
In this section the senior corporate officer has been personally given certification in
writing under which organizations financial statement with discloser requirement and fairly
being presented in all kind of material aspects over operations and financial condition of issues.
Officer has been signed over financial statements that is known over inaccurate subject that can
be subject to criminal penalties and prison terms.
Section 802 of the SOX Act of 2002
This contains rules that has been affecting record keeping and first deal with destruction
and facilitation of records. Second strictly defines retention form period of storing records. Then
comes third rule that is there to be given for specific business with organization to include
electronic communication (Bagrationi and Jabua, 2016).
Corporate governance has been related over acting in an manner that deals with functions
and patterns is required to be followed by management for maintaining of clean governance
within an organization. This could have been followed in good manner through Enron
corporation then proper management could have been done and factors disturbing the process
would have been identified. SOX act of 2002 has been formed after the fraud has been
committed and its major role is to control such activities and maintaining confidence of
investors. If this act would have been existing at that time then more strict punishment would
have been given for it.

CONCLUSION
In this file it can be marked out that business laws and ethics has an important role to play
within an organization and its formalities related to its establishment. Also both law deals with
workplace environment also. First part of project is there to deal with contact laws and questions
related to this is answered in relation to case scenario. Second part contains case study which is
based over controlling of activities that is related to firm. In SOX Act 2002 various talks has
been explained through regulation over controlling financial frauds.

REFRENCES
Books and journals
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EXPANSION/METHODS OF EFFECTIVE SCIENCE-BASED SATISFACTION OF
THE INCREASING SOCIAL NEEDS IN THE FIELD OF ENGINEERING,
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of Business Ethics. pp.1-17.
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Century (pp. 181-203). Palgrave Macmillan, Cham.
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