Contract Law and Ethics: Essential Elements, Rights, and Remedies

This report explains the essential elements of contract law, including offer, acceptance, consideration, and intention. It also discusses the rights and responsibilities of parties under a contract and the remedies available for breach of contract. Two case scenarios are presented to illustrate the legal implications of contract law. The report concludes by emphasizing the importance of understanding contract law for the smooth running of a business.

BUSINESS LAW AND
ETHICS

Table of Contents
INTRODUCTION ..........................................................................................................................2
TASK ..............................................................................................................................................2
CASE SCENARIO 1...................................................................................................................2
CASE SCENARIO 2...................................................................................................................4
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................5

INTRODUCTION
Organisations, companies and business are bound by a contract like a simple statement of
terms which includes promises, obligations between the parties bound by the agreement. The
contract law of UK regulates legally binding agreements in England and Wales. English contract
law is a promise enforceable by law. Contracts happen between the parties in exchange for
something of value and it ensures that the interests of parties are protected legally. The cases of
Avril, Belinda and Charlie, Darwash come under this statute law(Austen-Baker, 2017). This
report will explain in detail about Contract, its essential elements and conditions which are
needed for the contract to be formed, about the rights and responsibilities under the contract and
the remedies for breach of contract.
TASK
CASE SCENARIO 1
Contract is an agreement between two parties. The agreement in contract gives rise to
obligations which are enforced or recognised by law. In a contract between the two parties, one
party makes the offer and the other party accepts it. It has a lawful objective which the parties try
and achieve by the contract and it tries to develop an understanding which governs their business
relationship(Carrick, 2019). An understanding of the contract law is essential for the smooth
running of a business.
Conditions and elements for framing a contract are Offer, Acceptance, Consideration
and Intention. A contract begins with an offer wherein one party is the offeror who proposes the
terms of an agreement and the other party is offeree. An offer is an expression of willingness to
enter into a contract on specific terms with the intent that it is to be valid and binding once
accepted and recognized by the party to whom it is addressed (Ceil, 2018).
When an offer is accepted by a party it becomes a contract/agreement. Acceptance is an
expression of assent to the terms of a contract. For an acceptance to have a legal effect it must be
communicated to the offeror.
The second element Consideration is important for a contract to be binding.
Consideration is “something of value” which makes a promise enforceable. Consideration for a
promise must be give in return for the promise.

Intention to create a legal relationship is one of the basic elements of a contract. Legal
intentions are necessary to make a contract legally binding. Many a times social arrangements
take place which cannot be called a contract because they don't have the intention to be legally
binding. Intention of legality in the arrangement is important for it to be called a contract.
Avril made an offer to Belinda under the first condition of the Contract. He proposed the
terms and conditions of the contract and willingly expressed about it but it was not accepted by
her and the second condition of acceptance was not fulfilled due to which there was no
successful completion of the contract (Draper, and Newton, 2017). Consideration was included
in terms of payment of money for the construction of shed by Belinda and there was also legal
intention in the offer for it to become a contract. He thus changed the conditions of the pay in the
contract during the second time when tried to accept the offer after change of mind.
A contract being a legally binding agreement it therefore provides the parties with some
rights and responsibilities which they get and have to perform when they enter a contract. If
Avril and Belinda enter into a contract they will have these as a type of protection of their
interests. The rights and responsibilities provided are that if there is a breach of contract and
the party suffers losses due to it then the injured party is entitled to get damages and remedies
and it will be the responsibility of the person to fulfil the same. The injured party is also eligible
to get relief in the form of specific performance of contract being ordered by the court to the
damager and compelling him to perform the same. The court may also order the party and stop
him from committing a breach of contract by way of injunction, because it refrains a party from
doing so in favour of the innocent party. Injunctions can be mandatory or prohibitory and they
can be ordered on interim or final basis.
CASE SCENARIO 2
Contract happens between two parties which are the offeror and offeree. Here Darwash
presented the offer with a legal intention to the agent charlie for fulfilment of a work in promise
of payment of £3,500. The offer was accepted by Charlie with the legal boundations but he
misrepresented the facts of agreement to him (Durovic and Janssen, 2018).
There are various rights and remedies which Darwash is entitled to get as a party of the
contract. He suffered losses due to not having any idea of the agent being involved in the

contract. He was also not satisfied by the work done by Eddie who was sent by the agent
Charlie .
Thus, he can get the following rights and remedies, he can file a suit against the agent
and his worker for not following the condition of consideration which was decided in the
contract. He can terminate the contract for defective performance wherein Eddie did not
perform the role assigned to him properly which amounts to breach of contract(Naidoo, 2021) .
This serious defect in performance can be taken up by Darwash as equal to non performance due
to the very fact that it would need him to get the entire work redone. Charlie incapacitated
himself by giving the terms of contract to the third party which was Eddie to carry out the work.
Darwash, as the injured party can also refuse to accept the breach and thus will have the
right to enforce the other party's primary obligations of work. Due to a party's non performance
of the obligation and their defectiveness, the injured party is released from the obligations of the
contract and is provided remedy in various forms which is termed as termination for breach. The
right to terminate completely depends on the injured party of the contract.
Vitiating factors are factors which make a contract invalid. Misrepresentation, mistake
are the factors responsible for vitiation. Even the contracts which are drafted with utmost care
can become unenforceable if the vitiating factor applies(Riefa and Willett, 2018).
Misrepresentation is false statement of facts and terms of a contract, whole parts of the truth are
not fully presented by one party to another party. Charlie hid the facts that he was a agent who
contracted other people to work, he intentionally misrepresented facts of the contract from
Darwash. He fradulently peresented falsehood of facts. Darwash can get the remedies like
Rescission which is the discretionary power of court that establishes and sets aside the terms of
the contract and brings the parties in the original position before the contract was made. The
court can also provide indemnity in his favour wherein payment for expenses can be ordered.
The injured party can claim remedies for the loss and substantial damage caused to it by
the other party. The injured party must show that it has suffered actual loss and is thus entitled
for compensation (Temte, 2019). But several times damages are not appropriate remedies for the
injury suffered by the party, it is inadequate based on the loss the injured party has suffered due
to end of contract and non performance of promises.
Specific performance and injunction are also the ways of compensating the injured
party. It is at the discretion of court to order for Performance of certain terms of the contract

specifically, if it finds it appropriate to do so in favour of the injured party. Injunction is a way of
stopping the party who damages from committing a breach of contract because it refrains a party
from doing so in favour of the innocent party. Injunctions can be ordered on interim or final basis
and they can be mandatory or prohibitory.
CONCLUSION
It can be concluded by the report that Contract law of UK is neither too vast nor is a
simple document. It effectively explains the elements of a contract which are essentials for a
valid contract. The parties of both the contracts which are legally binding and thus need to fulfil
the obligations of agreement. In the first case if Belinda formed a Contract with Avril, she could
sue him for breach of contract and in second case, Darwash can file a suit against Charlie and
Eddie for fulfilment of the conditions of contract. This legislation thus provides the injured party
with damages/remedies in relation to the breach of contract and damages done to a party, etc.
REFERENCES
Books and Journals
Austen-Baker, R., 2017. Implied terms in English contract law. Edward Elgar Publishing.
Carrick, S.N., 2019. Athlete Image Rights and the potential tax consequences in the UK and
Canada.
Ceil, C., 2018. The Development of Legal System in England and Wales. Available at SSRN
3520535.
Draper, M.J. and Newton, P.M., 2017. A legal approach to tackling contract
cheating?. International Journal for Educational Integrity, 13(1), pp.1-16.
Durovic, M. and Janssen, A., 2018. The formation of smart contracts and beyond: Shaking the
fundamentals of contract law. Smart Contracts and Blockchain Technology: Role of
Contract Law”,(L. DiMatteo, M. Cannarsa & C. Poncibo eds Cambridge University
Press 2019)(forthcoming), https://www. researchgate. net/publication/327732779.
Naidoo, A., 2021. Complete Contract Law: Text, Cases, and Materials. Oxford University Press.
Riefa, C. and Willett, C., 2018. Enforcement and Effectiveness of Consumer Law in the UK.
In Enforcement and Effectiveness of Consumer Law (pp. 673-695). Springer, Cham.
Temte, M.N., 2019. Blockchain challenges traditional contract law: Just how smart are smart
contracts. Wyo. L. Rev., 19, p.87.