Business Law and Ethics: Breach of Contract and Remedies, Ethical Issues at Union Carbide

Business Law and
Ethics

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART 1............................................................................................................................................3
Breach of contractual relationships and remedies.......................................................................3
PART 2............................................................................................................................................6
Ethical issues at Union Carbide..................................................................................................6
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business law provides the minimum standards of the behaviour which is expected by the
companies and businesses to follow in order to work legally. Business ethics can be referred to
as the study of the appropriate policies and practices of business in context to controversial
subjects like corporate governance, bribery, discrimination, fiduciary relationship and corporate
social responsibility (Halbert and Ingulli, 2020). The businesses are regulated by the laws like
contract law, companies Act, employment law and many other. The contract law is a branch of
civil law which regulate the rights, obligations, conduct and relation of the parties who have
entered into a valid contract. The general contract law is based on conception which generally
the parties have by the agreement which creates legal obligations and rights. It is personal in
nature and is enforceable by the law only by the action of the party who is aggrieved by the
breach of contract. This report shall deal with the case scenario on breach of contractual
relationships and remedies and a case study of Bhopal gas tragedy.
PART 1
Breach of contractual relationships and remedies.
Contract law regulates the conduct, relations, obligations and rights of the parties who
have entered into a legally binding contract. An agreement which is either written or oral and
concerns with the sales, employment or tenancy and is enforceable by the law is called a
contract. The contract law provides the essentials of the valid contract which involves an offer by
one party, the acceptance by the other party, a consideration is involved in the contract and the
parties have an intention to create a legal relations (Roessing and El-Jourbagy, 2018). In order to
enforce the contract and create a binding effect on it, it is necessary that the contract must fulfil
the essential requirements of it. Earlier, before the case of Balfour v. Balfour, the intention to
create a legal relations was not an essential requirement but in this case, Denning J held that
when an agreement is made which is commercial in nature, a presumption is raised by the law
that the parties have intention to create a legal relation. So this is also one of the important
essential requirement of a valid contract.
In this case, Raymond runs a consultancy firm which specialises in taxation advice and
also works on part time basis in a firm of accountants. Raymond entered into a contract with
Samantha who is a struggling artist and agreed to draft the business accounts for her for the past

three years. The consideration fixed by them was £800. when the work was completed by
Raymond, Samantha told him that she could only afford to pay £200. A bitter argument broke
between them and Raymond reluctantly accepted £200 as full and final settlement. After few
time, Samantha's painting was sold in £20000 and Raymond saw it in newspaper and wishes to
claim the remaining balance.
In this case scenario, the parties have entered into a valid contract as the essentials of the
valid contract is fulfilled. There was an offer by one party and the acceptance by the other party.
The consideration of £800 is also fixed by the parties and they both have the intention to create
the legal relations.
The law of contract provides various remedies in case any party breaches the valid legal
contract. In such a case, an aggrieved party may claim the remedy which the contract law offers.
There are many remedies which the law provides which includes firstly the damages. It is an
award of the money which is given to the innocent party as a compensation. The main purpose of
this is to place the aggrieved party into the position which would have been if the contract was
performed. Another remedy is repudiation which involves ending the contract. Third remedy is
rescission which involves placing the party in the pre contractual position. It can be awarded
when the vitiating factor is present in the contract like undue influence, fraud misrepresentation,
etc. Another remedy is specific performance of contract which involves order from the court to
perform the contractual obligations (Dove and Bryant, 2019).
In the present case scenario, Raymond can claim the remedy of damages or specific
performance of contract. Raymond had performed its contractual obligation and Samantha had
refused to provide the full consideration so he is entitled to claim any of the two remedies.
In this case scenario, if Samantha had paid £200 before three weeks when the debt
become due, the situation would have been different. In such a circumstance, there would have
been a counter offer by Samantha that she would only pay the consideration of £200. counter
offers are such offer which destruct the original offer and works as new offer and not acceptance
to the original offer. In the case of Hyde v. Wrench, the court held that counter offer destroys the
original offer and it is not open for the offeree to accept it. Raymond would have an option to
either accept the counter offer or reject it. If he would have accepted the counter offer, there
would not have been any issue and consideration shall be fixed of £200 and if he would have