Business Law and Ethics

Note:- Need Assignment 1 only

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BUSINESS LAW AND
ETHICS

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TABLE OF CONTENTS
1. INTRODUCTION…………………………………………………..03
2. MAIN BODY
(i) Discuss the Blue Prints of the Valid Contract…………………………03
(ii) Discuss the Court System of UK and Advise Parties Which Court They Can
Approach…………………………………………………………………05
(iii) Advise Hilary Whether a Contract Exist Between Her and Others That are
Eleanor, Amy and Olivia………………………………………………...05
(iv) Discuss Various Remedies Available to Them……………………….…06
3. CONCLUSION……………………………………………………….06
4. REFERENCES………………………………………………………..07

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INTRODUCTION
The legislature in United Kingdom has passed various laws which a business need to
follow. These laws are enacted by the Parliament of United Kingdom in order to ensure that any
business should not carry on their business activities in an illegal and unethical manner. It is a
fact that every business has formed for the motive of gaining profit but it is the duty of all the
business organization to follow the principles of ethics while doing their business transactions.
To keep checks and balances upon the business organization the one major law which is widely
used in the business is Law of Contracts. Every transaction which took place in a business
organization is done by forming a contract. If any dispute arises between the contracting parties,
the party who has suffered the loss due to the breach of the contract becomes entitled to claim for
compensation. While awarding the compensation the court will determine the validity of the
agreement and will see whether all the essentials of a valid contract are present or not.
In this essay, it will be discussed that what all are the essentials to form a valid contract
and what remedies are available to the contracting parties on the breach of the contract. Three
case based problems will also be discussed by determining the validity of the contract.
MAIN BODY
Discuss the Blue Prints of the Valid Contract
A contract is a piece of document which is done for a specific purpose and which
determines the Rights and Obligations of the contracting parties. A valid piece of contract is a
“Legally Binding Document” which means the breach of a valid contract will raise the Cause
of Action. If one of the parties who has entered into the contract, breaches it, the party who has
breach the contract becomes liable to provide compensation to the other party who has suffered
the loss due to the breach of contract(Allen and Kraakman, 2016).
The contract can be formed between two or more people which indicates that a single
person cannot form a contract with himself. It is also necessary that the loss caused to the breach
must be direct and no compensation will be provided for the losses which are indirect or
incidental in nature. While awarding the compensation to the sufferer the court will examine
whether a valid contract was existing between the parties or not. For this purpose, the court will

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see the presence of all the essentials of a valid contract which must be there in the agreement.
These essentials are Offer, Acceptance, Consideration, Intention to Enter into Legal
Relationship, Capacity and Certainty.
Offer basically means a proposal which would be given by one party to the other party.
The person who is making the offer will be known as Offeror and the person who will be
accepting that offer will be known as Offeree(Ashcroft, Ashcroft and Patterson, 2016).
The proposal must come from the side of offeror. Many a times people get confused between an
offer and an invitation to offer. In an offer the next step will be the acceptance whereas in the
invitation to offer the making of offer will be the next stage. It means that the invitation to offer
is a pre-stage of an offer. The landmark judgement where this distinction was made between an
offer and invitation to offer was Harvey vs Facey. In this the plaintiff through a telegram asked
about the lowest price of a property which was replied by the defendant through the second
telegram. Again the plaintiff sent a telegram sating that he is agreed to buy the property on the
lowest price mentioned which was rejected by the defendant. When the matter came before the
court of law, the question before the court was, the telegram in which the plaintiff has agreed to
buy the property should be considered as an offer or an invitation to offer. The Privy Council in
this case has held that it was mere an invitation to offer so no valid contract was formed between
the parties. In the another judgement of Fisher vs Bell(1961) it was held that all the items which
are being displayed in a shop or showroom will be considered as an invitation to offer and the
person who would be willing to purchase those offers will be making the offer towards the
customers. The another landmark judgement upon this is Carlill vs Carbolic Smoke Ball
Co(Beatty, Samuelson and Abril, 2018).
The next essential of a valid contract is Acceptance. The acceptance must come through
the acceptor or offeree. It is necessary that acceptance should be properly communicated to the
offeror. If any specific mode of the communication has been mentioned in the proposal, the
acceptance should be communicated through that way only. for instance, if Mr. A has sent an
offer to Mr. B regarding selling his house and in the proposal only it was mentioned that
acceptance should come by a letter only. The acceptance will be deemed completed only when
the acceptance is given through a letter and not through any other mode. It is a general rule that a
contract will be formed after the acceptance comes into the knowledge of offeror but there lies an

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exception to the general rule where the acceptance has been communicated through letter or
postal method. In such cases it will be deemed that acceptance has been completed when the
letter has been posted or put in the mode of transmission. It means that when the acceptance has
been given through letter, it cannot be revoked once the letter has been put in the mode of the
transmission(Jan and Harm, 2019).
The Presence of Consideration is also necessary to held an agreement as a valid
contract. The consideration is something which each party is exchanging at the time of formation
of a contract. For instance, if A sells house to B for $2000, here this money will be considered as
a consideration. No valid contract can be formed without the presence of some consideration. It
must be noted that it is not required that a consideration must be adequate.
In the famous case of Balfour vs Balfour, the Privy Council has clarified that there must
be an intention to enter into a legal relationship at the formation of the contract. If this intention
will be absent in either of the parties, the document will not be considered as a valid contract.
As per English law of contract a contract cannot be entered with a Minor or Insolvent
and the contract should be entered only on those subject matters which are certain in nature(Jones,
2019).
Discuss the Court System of UK and Advise Parties Which Court They Can Approach
Here in this essay the civil court system of UK will be discussed. The Queen’s Bench of
High Court is empowered to deal with the civil issues and as the contract is the part of civil law,
it will be dealt by this court only. For those contractual disputes in which there is less amount is
in dispute, the County Court is empowered to deal such cases.
The appeal from Queen’s Bench will lie to Court of Appeal and then to Supreme Court
of UK which was formed by the Constitutional Reform Act 2005(McCormack, 2017).
The parties are advised to either approach the Queen’s Bench of High Court or County
Court as per the disputed amount.
Advise Hilary Whether a Contract Exist Between Her and Others That are Eleanor, Amy
and Olivia

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Hilary and Eleanor: Here no contract lies between both the parties. As in the case of
Partridge vs Carttinden, it was held that all the advertisements would be considered as an
invitation to offer. Here also the advertisement given by the Hilary was an invitation to offer.
Further when the proper offer was given by Hilary, it was not accepted by Eleanor.
Hilary and Amy: In the above discussion it was discussed that in the cases where the
acceptance has been sent through the postal method, it cannot be revoked once the acceptance
has been put in the mode of transmission. By applying the same principle on the given facts it
can be said that now Amy cannot revoke her acceptance and a contract lies between her and
Hilary. The Landmark judgement upon this issue is Entores vs Far East Miles Corp(Miller,
2016).
Hilary and Olivia: The notices which was put by Hilary would be considered as an
invitation to offer. The offer came from the side of Olivia which was not accepted by Hilary,
hence no valid contract was formed.
Discuss Various Remedies Available to Them
Damages: It is the most common remedy which a court can award. In this remedy the
compensation will be awarded to the party who has suffered the loss due to the breach of
contract. It will be seen by the court that the loss occurred was direct and foreseeable(Ramseyer,
2017).
Specific Performance: If in any situation the court thinks that compensation is not an
adequate remedy for the sufferer. It can order for the specific performance of the contract.
CONCLUSION
It can be concluded that a contract is such a law which is being widely used in the
business activities. It was also discussed that what all are the essentials to form a valid contract.
It was also explained that what is the appropriate court which the parties can approach and what
all remedies are available to the parties.

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REFERENCES
Books & Journals
Allen, W. T. and Kraakman, R., 2016. Commentaries and cases on the law of business organization. Wolters
Kluwer law & business.
Ashcroft, J.D., Ashcroft, K. and Patterson, M., 2016. Cengage Advantage Books: Law for Business. Cengage
Learning.
Beatty, J.F., Samuelson, S.S. and Abril, P., 2018. Business law and the legal environment. Cengage Learning.
Jan, K. and Harm, W., 2019. A Basic Guide to International Business Law. Routledge.
Jones, L., 2019. Introduction to business law. Oxford University Press, USA.
McCormack, G., 2017. Business restructuring law in Europe: making a fresh start. Journal of Corporate Law
Studies, 17(1), pp.167-202.
Miller, R.L., 2016. Business Law Today, Comprehensive. Cengage learning.
Ramseyer, J.M., 2017. Aspen Treatise for Business Organizations. Wolters Kluwer Law & Business.
Smith, D. G. and Williams, C. A., 2018. Business Organizations: Cases, Problems, and Case Studies. Aspen
Publishers.
Sulkowski, A.J., 2018. Blockchain, law, and business supply chains: The need for governance and legal frameworks
to achieve sustainability. Available at SSRN 3205452.