Business Law and Ethics: Essentials of a Valid Contract, Court System, Binding Contracts, Remedies

This essay explores the essentials of a valid contract, the existing court system in the UK, advice on binding contracts, and various remedies available in contract law. It emphasizes the importance of ethics in business transactions and the need to follow laws and regulations. The essay also provides case-based examples to illustrate the concepts discussed.

BUSINESS LAW AND
ETHICS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Define the “Law of Contracts” and What all are the Essentials of a Valid Contract..............3
2. Explain the Existing Court System of UK and Advise the Parties to Which Court to
Approach.....................................................................................................................................5
3. Advise Hilary as to Whether Any Binding Contracts Exist between Herself and Each of the
Following People: Eleanor, Amy and Olivia..............................................................................6
4. Explain Various Remedies Which are Available in Contract Law.........................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business and ethics are two things in the modern era which are closely
connected. It is necessary that each business organisation should follow the
basic principles of ethics while carrying the business transactions. If the
business organisation will follow the ethics it will help in enhancing the brand
image of the company. Also business has to follow various laws and
regulations. The law of contract is one such law which a business has to
follow. While doing every transaction of the business whether it is with the
suppliers of raw materials or with the customers the contract has to be
formed which can be either written or oral. In this essay essentials of the
contract will be discussed which must present in the agreement in order to
determine the duties and obligations of the contracting parties. Also various
fact based problems will be examined in order to find out whether a valid
contract exist between them or not and what are the available remedies to
them.
MAIN BODY
1. Define the “Law of Contracts” and What all are the Essentials of a Valid
Contract
Contract can be defined in simple terms such as “A legally
binding document which determines the rights and obligations of
the contracting parties”. A contract can be formed between two or more
parties for a thing which is not prohibited by law in which offer will come
from one party which needs to be accepted by other party(Cartwright, 2016).
On the formation of a valid contract each party get certain rights and duties
and both the parties becomes bound to follow the terms and conditions of
the contract. If any of the party breach that contract the compensation will

be awarded to the party who has suffered the loss due to that breach. When
the matter will come before the court the court while awarding the
compensation will examine the validity of contract and will see whether all
the essentials of a contract are present in the agreement in question or not.
There are various essentials of a valid contract which are following:
Offer: This is the first step or the first essential which is required
to be present in the agreement to make it a valid contract. Offer is nothing
but just to ask somebody if the other person want to have something or
whether they want to do something. Every valid contract should start with an
offer. These offers must not be misunderstood with Invitation to
Treat(Invitation to Offer)(DiMatteo and Hogg, 2016). The most general
example of invitation to offer is showing and displaying products in a shop. In
these cases the offer will come from the person who is willing to buy those
products and not the shopkeeper. On receiving the offer from the customer
now the shopkeeper can either accept or reject the given offer. This principle
that the items displayed in the showrooms or shops will be considered as
invitation to offer has been evolved in the landmark judgement of Fisher vs
Bell(1961).
Acceptance: This is the second step towards the formation of a
valid contract. If the offer gets accepted it becomes a valid contract. But the
acceptance must be gained with free consent and it should not be given
under any pressure. It is also a fact that acceptance can be either express or
it can be given through conduct also. For instance if Mr A offers Mr B that if
the latter send his white horse to the farm house of former, Mr A will give $
100 to Mr B. Here Mr B sent his horse to Mr A and through this it will be
deemed that a valid contract has been formed. In this instance there was no
express acceptance was there, but the acceptance was given through
conduct. It is also essential that the acceptance must be properly
communicated to the offeror in the mode prescribed(if any). Without the
communication of the acceptance, a valid contract will not form. It is a
general rule that when the acceptance will come in the knowledge of the

offeror, at that time the contract will form(Haugh, 2019). But there is an
exception to this general rule when the acceptance has been sent by the
Postal Method. In this the contract will be formed once the acceptance has
been put in the mode of transmission. This principle was evolved in the case
of Adams vs Lindsell(1818).
Consideration: While doing contract there must be some
exchange between the parties which is known as consideration. This
exchange can be either in the form of monetary terms or any promise or set
of promises(Monateri, 2017).
Intention to Enter into Legal Relationship: While entering
into an agreement there must be presence of intention to enter into a legal
relationship. The landmark judgement upon this essential is Balfour vs
Balfour.
Certainty: The subject matter on which the contract has been
made must be certain in nature. If the subject matter is uncertain the
contract will become invalid. For instance if Mr A tells Mr B that if it rains on
22nd August,he will give him $50. Here it is uncertain event due to which this
agreement will not be considered as valid contract.
2. Explain the Existing Court System of UK and Advise the Parties to Which
Court to Approach
Through the Constitutional Reform Act 2005, the Supreme Court
of United Kingdom was Established. UK consists various jurisdictions
majorly Civil, Criminal and Family. This essay is based upon the contract law
which comes under the civil jurisdiction so here it will be discussed that
which courts in UK are competent to deal with the civil cases. The Queen's
Bench of High Court Division is competent to deal with the contractual
disputes in United Kingdom. A lower court namely County Court is also
there in UK who generally deals those contractual dispute cases where the
amount in question is less. Generally these cases are appealable and appeal

of these cases will go to Court of Appeal and then Supreme
Court(Renaudin, 2019).
The Parties can either approach the County Court or Queen's Bench
division of High Court as per the amount that is in question.
3. Advise Hilary as to Whether Any Binding Contracts Exist between Herself
and Each of the Following People: Eleanor, Amy and Olivia
Case 1: This is a case which is related to invitation to offer as in the
facts it is given that Hilary has given the advertisement. In the celebrated
case of Partridge vs Crittendon the court has laid down the principle that
advertisements will not be considered as offer but they will be considered as
invitation to offer(Siedel, 2016). Here in the given facts the first offer was
given by the Eleanor on which the Hilary quoted a different price so the offer
became ceased. Second time when the offer came from the side of Hilary it
was rejected by Eleanor. As there is no acceptance of the given offers hence
no contractual relationship exist between both the parties.
Case 2: It is already discussed above with the help of a case
law(Adams vs Lindsell) that in the case where the acceptance will be sent by
postal method it cannot be revoked after the acceptance has been put in the
mode of transmission. On the given facts this principle will apply as Amy has
posted her acceptance through letter which binds both the parties as a
contract between both the parties has been formed at the time when the
letter was posted. Now Amy cannot revoke its acceptance as it will be
considered as the breach of contract. The other landmark judgement on this
case is Entores Ltd Vs Miles Far East Corporation(1955)(Smits, 2017).
Case 3: The facts given in the problem indicates that the notices
which were put by Hilary regarding the exhibition will be considered as the
invitation to offer. The people who will be visiting the exhibition would be
giving the offer to Hilary regarding purchase of the paintings. Here in the
given facts the offer has came from Olivia which was not accepted by Hilary,
hence no valid contract has been formed between both the parties.

4. Explain Various Remedies Which are Available in Contract Law
Compensation: This remedy is very common when the breach of
contract by either of the party take place. In this the court will award the
damages to the party who has suffered the loss due to the breach of the
contract. The court while awarding the compensation must ensure that there
was existing a valid contract between the parties and the loss occurred has
been caused due to such breach only. The loss must be foresee. If all these
situations satisfies, the court can order the party who has breached the
contract to pay compensation to the other party.
Specific Performance of Contract: Sometimes such situation can
arose where the compensation will not be an adequate remedy. In such
cases the court will order that the party who has breached the contract must
fulfil his duty. This is known as specific performance of contract.
Injunction: When one of the party has an intuition that the other party
would breach the contract in future. In those cases the court can issue
injunction restricting the parties to breach the contract. These injunction can
be either mandatory or interlocutory or prohibitory.
CONCLUSION
By the above essay it can be concluded that contract law affects the
business in a greater way. For formation of a valid contract all the above
discussed essentials of the contract must be present otherwise the court will
declare the contract as void. With the help of various fact based problems it
was seen that what is the competent court to try these matters and what all
remedies are available to the parties.

REFERENCES
Books & Journals
Cartwright, J., 2016. Contract law: An introduction to the English law of
contract for the civil lawyer. Bloomsbury Publishing.
DiMatteo, L. A. and Hogg, M. eds., 2016. Comparative Contract Law: British
and American Perspectives. Oxford University Press.
Haugh, T., 2019. Modeling the Message: Closing the Knowledge Gap in
Business Law and Ethics Classes. Journal of Legal Studies Education.
36(2). pp.159-188.
Monateri, P. G. ed., 2017. Comparative contract law. Edward Elgar Publishing.
Renaudin, M., 2019. The consequences of Brexit on the regulatory
competition and the approximation of commercial contract law in
Europe.
Siedel, G. J., 2016. The three pillar model for business decisions: strategy, law
and ethics. Van Rye Publishing, LLC.
Smits, J. M. ed., 2017. Contract law: a comparative introduction. Edward Elgar
Publishing.