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

Business law and ethics

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................3
Contract law the blue prints of a contract....................................................................................3
Court system in relation to the English legal system...................................................................4
Binding contracts in context of case study..................................................................................5
Various remedies available to the parties....................................................................................6
TASK 2............................................................................................................................................7
Enron Fraud Scandal: Background..............................................................................................7
The case in context of ethical corporate governance...................................................................8
Sarbanes-Oxley (SOX) Act 2002 prompted by the scandal........................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Contract law can be defined as a body of law instated to protect the rights and obligations
of the contractual parties which are under a contract. It basically governs the interpretations,
potential conflicts, validity and relationship among two or more people especially about
provision of services, sale of goods, exchange or transfer of ownership or interests. This essay
will take into account the case study of contractual relationship and define contract law, describe
briefly the blue prints of a contract, explain the court system in context of the English legal
system, giving advice to the parties involved in the given case study regarding the court action to
be pursued. In the first task, individual essay, will advise Hillary regarding binding contracts that
are among her, Amy and Olivia. Apart from that various remedies for various parties will be
discussed. The second task, individual report will cover the background of the Enron scandal,
assess the case in context of ethical corporate governance and Sarbanes-Oxley Act. Enron
Corporation, founded in 1985, was an American company for commodities, energy and services
company based in Texas. At the end of 2001, It came out that Enron's financial condition was
undergoing a systematic, creatively planned and institutionalized accounting fraud and
corruption which led to Enron scandal and the company went bankrupt and dissolved facing
legal actions.
TASK 1
Contract law the blue prints of a contract
The law of obligations encompasses contract, tort and restitution and certain obligations
arise in the contract law when one party makes an agreement with other person or party with the
intention that it has to be legally binding. Most contracts are made in the context of intent to
create legal relationships and primarily for commercial relationships like sale and purchase of
goods and services. Contract law is a body of law for protection of rights and obligations of the
contractual parties under a contract. It governs the interpretations, validity and relationship
among two or more people especially about provision of services, potential conflicts, sale of
goods, exchange or transfer of ownership or interests (Austen-Baker, 2017). A contract is created

when there is involvement of two or more parties when there has been an acceptance offer and a
form of consideration such as payment is passed from one of the parties to the other. In the case
of meeting this condition or when otherwise agreed, the conditional contract becomes
enforceable. The acceptance of any offers can be done by conduct or by words, in the relation
to offeree objectively inferring that there has been an agreement to the offerer's terms. An
enforceable contract needs a level of certainty regarding its terms and the terms of the contract
has to be clearly apparent to the involved parties. If there has been no consensus ad idem or
agreement on identical terms, then the court of law cannot interpret or abide legal action on
contract laws. If a contract is illegal, it can not be enforced by any tribunal or court and might be
termed as a void contract. Although, court differentiates between circumstances if the purpose of
contact is illegal and if innocent party gets a legal remedy in certain cases. Mistakes and
misinterpretations likely tend to make contacts voidable and can be legally terminated
(Cartwright, 2016).
The brief blueprint of the contact law of UK consists of Intention of creating legal
relations between family and friends and commerce and making basic commercial or social
arrangements accordingly, Formation of a contract, Offer and acceptance, Acceptance of an offer
(unilateral and bilateral contracts), Termination of an offer, Consideration of an offer. The
Contents of a contract are terms that are implied to the contracts are implications by statute law,
face and common law. And major terms incorporated in a contract are incorporation through
course of dealing, of written terms of notice and by signature. The contracts can be classified as
Statutory, common law and parties' own classification. Contracts may pertain to
misrepresentation like fraudulence, negligence and innocence. Breach of a contract can be in the
form of anticipatory breach, fundamental breach and the effect of repudiation (Harder, 2020).
Court system in relation to the English legal system
The court system according to English Law System describes the law as civil law and
criminal law. The contract law comes under civil law, which is defined as the constitution of
obligations and rights a person has with other individual or groups. A remedy can be claimed by
the person from the wrongdoer if formers rights have been infringed. The civil law basically
provides means for obtaining compensation by the injured party (Huxley-Binns, Martin and
Frost, 2017).