Business Law and Ethics: Essentials of a Valid Contract and Court System in English Legal System

BUSINESS LAW AND
ETHICS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
1. Define Law of Contract & Explain all the Essentials of a Valid Contracting....................3
2. Explain the Court System in Relation to the English Legal System and Advise the Parties
Which Court to Approach.....................................................................................................5
3. Advise Hilary as to Whether Binding Contracts Exist Between Herself and Each of the
Following People: Eleanor,Amy and Olivia..........................................................................6
4. Explain and discuss the various remedies available to the parties.....................................6
TASK 2............................................................................................................................................7
Introduction to the case..........................................................................................................7
Facts of the Case.....................................................................................................................7
Ethical Corporate Governance and Overview of Sarbane-Oxley Act 2002...........................7
Relationship Between Ethical Corporate Governance and the Sabrane-Oxley Act 2002......9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Every business has to follow certain laws and regulations which helps them for the
smooth functioning of the business. These laws makes significant impact upon the business in
many ways and leads in protecting the rights of all the parties who are doing business. Contract
law is one such law which is widely used by business in doing their day to day transactions. This
law has been framed in such a way so that both the parties respect the terms and condition of the
contract and if either of the parties breaches it, they will be liable to pay compensation to the
sufferer party. Also every company should follow certain ethics which will ensure the strong
corporate governance. Having a strong corporate governance ensures that there will be no illegal
activities taking place in the company. The most important principles of a strong corporate
governance is that to follow the ethical principles by the company by doing business. In this
report it will be seen that how failure of corporate governance hamper the image of a company
by referring a case of Enron in which it will be discussed that how this failure has affected the
company in a negative manner which lead to the passing of a new act.
There are also certain essentials of a contract which need to be present while examining
an agreement as a valid contract or not which will be discussed further. Also certain fact based
problems will be examined and it will be discussed whether the valid contract was formed or not
between the parties. Also various legal remedies available to the parties after breach of the
contract will be explained.
MAIN BODY
TASK 1
1. Define Law of Contract & Explain all the Essentials of a Valid Contracting
A contract can be defined as “a legally binding agreement” in which all the prescribed
essential elements of a valid contract are present. Anybody can make an agreement but whether
that agreement amounts to a legally valid contract or not is the most common question which
comes before the court. In these types of cases where one party states that there was no valid
contract present, the court will examine whether the essentials of the contract are present or not
in the agreement which is in question. A contract agreement identifies the various rights and
duties of the contracting parties and if these parties violates any of the terms of the contract it
will amount to the breach of that contract and the party who has breached the contract will be

liable to pay compensation to the other party whose rights has been violated because of such
breach(Bayern, 2016).
The various essentials which has been enumerated under the English Contractual Law
helps the courts while determining the validity of the contract. While determining the validity the
courts must consider the following things:
(I) “There was an Agreement Between the Parties”: The court will see whether
any agreement was made between the parties or not. It is the basic essential to
find out about the existence of the valid contract. The agreement can be either
“Written” or “Oral”.
(II) Intention of the Parties: It is also an essential that parties who are entering into
the agreement are having an intention to enter into a legal relationship with each
other and they are serious about this contract. The most important case regarding
this is of Balfour Vs Balfour in which there was an agreement between husband
and wife and both of them did not intended to enter into a legal relationship.
When the husband breached the agreement and the matter came before the court,
the court stated that there was no intention of the parties to enter into a contract,
thus no legally binding contract exist.
(III) Consideration: To enforce any of the agreement as contract it is
necessary that there must be some sort of consideration present. Consideration is
nothing but an agreed price or some promise which both the parties agrees to each
other(Corbin, 2018).
While entering into an agreement it is must that one party makes an “Offer” while the
party to whom the offer has been made must “Accept” that offer and the “Acceptance of the
Offer” must be communicated to the offeror in the prescribed manner if any. The acceptance can
be given either expressly or through any conduct which is known as implied acceptance. For
Example if Mr John has made an offer to Mr Fredrick that if Mr Fredrick give his wrist watch to
Mr John, he will give $10 to him. Here in this case Mr Fredrick has sent his to Mr John without
giving his express acceptance regarding the offer. This conduct of Mr Fredrick will amount to
acceptance by conduct.
There is a huge difference between the offer and an “Invitation to Offer”. Generally
people get confused between these two. The court has distinguished these two in the celebrated