Analysis of Contract Law: A Business Law and Ethics Case Study

This case study examines contract law and its ethical implications within a business context. It analyzes two scenarios: the first involving an unaccepted offer and a subsequent counteroffer, concluding no contract was formed, thus negating rights and responsibilities. The second scenario explores an agent-principal relationship, determining that a contract existed between Darwash and Charlie, holding Charlie liable for the incomplete work done by his agent, Eddie. Darwash is entitled to remedies such as damages or specific performance from Charlie. The study emphasizes the importance of offer, acceptance, consideration, and intention to create legal relations in forming a valid contract, and it highlights various remedies available under contract law, including damages, specific performance, injunction, repudiation, and rescission. Desklib provides a platform for students to access similar solved assignments and past papers.

Business Law and
Ethics

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Case scenario 1............................................................................................................................3
Case scenario 2............................................................................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business ethics and laws are two different concepts wherein the ethics are applied to
every aspect of the business conduct and is also relevant to the individual and organization's
conduct. These are originated mainly from the legal system, individuals or organizational
statements. It is the values, norms or practices which may be ethical or unethical that guide the
businesses to function appropriately. On other side, the business law is a set of regulations and
rules which mandates the organizations to follow so that there is smooth functioning of it. It
protects the rights of every person associated with it which includes employees, investors, etc.
(Koven and Perez, 2021) This essay shall deal with law of contract wherein concept of contract,
its conditions, rights and responsibilities shall be covered in two different scenarios.
MAIN BODY
Case scenario 1
The contract can be defined as a document which consist of the terms and conditions of the
parties together with their mutual obligations. It is being made enforceable under law. It can be
binding on parties when it fulfils the essential requirement of the contract and in case there is
breach of it, the party can claim the appropriate remedy under law. (Karpavithra and Karvittal,
2017).
The contract consists of the essential requirements which are required to be present in it
in order to give it the status of binding. The first element is agreement between parties which
involves and offer as well as its acceptance by other party. When one party willingly makes
promise to do or not to do something it is an offer and when the other party is agreed to it, it
provide its acceptance to it. The acceptance must be communicated clearly to other party and
within the time period which is being stipulated in it. The other element is consideration which
involves the value of something that is paid on behalf of the promise which is required to be
fulfilled. Last element is legal intention wherein the court makes presumption in commercial
contract that parties have intention to create the legal relation while in the social or domestic
contract, a reverse presumption n is taken by court. (Lee, 2021).
When discussing in context to the above case scenario, there is no legal contract being
framed between the parties. Avril made the offer to Belinda by quoting the price of €750 to
which Belinda did not accept it so the contract did not form. The offer also consists of stipulation

that that acceptance must be given within 7 days. So Belinda responded to not accept the offer by
an email. After couple of days, when Belinda made acceptance to the offer, Avril offered the
quotation of €900. This is the counter offer. It means when the offeree responds to the offer
another offers on varied term, it is counter offer. In the case of Hyde v. Wrench, defendant have
offered to sell the farm for €1000 to claimant to which claimant replied with offer of €950 to
which defendant did not accepted. Then claimant accepted the offer for €1000 but defendant
rejected it so claimant brought an action for the specific performance (Etzler, 2020). The court
held that there is not contract between them due to counter offer being made as when the terms
of the contract differs, it is counter offer and no contract exist between the parties. It also
destroys the original offer as it does not want to make it open for the offeree to accept it again
(Ciulla and Scharding, 2019).
So in this case, there has been no contract between Avril and Belinda as Belinda has
communicated her rejection first and as per stipulation, her acceptance was communicated later,
so there is no contract between them.
Rights are those which are guaranteed to the parties by the legal contract which is valid.
The first includes right to the specific performance of the contract which states that the [arties
are bound to fulfil their obligation and in case any party denies it, the other one has right to claim
its specific performance. (Arvind and Steele, 2020). Second is right to claim remedies when
there is breach of contract. The law provides for the remedies which can be claimed by
aggrieved party in case of breach. (Luts and et. al., 2021).
Now there are many responsibilities being given to the parties who have entered into the
contract which involves firstly to fulfil promises which are specified and enumerated in contract
and when any obligation is put in question, it is taken into consideration that the party has
reasonable capacity to perform or refrain the task. (Calahorrano Latorre, 2020). Second
responsibility includes to deal in the fair and truthful manner with the other party (Hess, 2018).
Next is that the parties should not make use of the vitiating factors such as coercion or force at
the time of obtaining the consent from parties (Garro and et. al., 2021).
Hence, as there is no contract between parties, so there are no rights and responsibilities
on the parties to fulfil.

Case scenario 2
The contract is a binding agreement between the parties and its essential includes offer,
acceptance to it, consideration and intention to create the legal relationship. As in the given case
scenario, Charlie and Eddie have the agent principle relationship which is a common law rule
(Skelton, 2020). As at the time when Darwash contacted for wire replacement, Charlie replied
that an eventual contract will only be made by him and send Eddie on its behalf for assessing the
work. Moreover, when Eddie quoted the price, Darwash communicated its acceptance to Charlie
to which Eddie replied for beginning the work. This shows that their agent principle relationship
between them. The contract was however being made between Darwash and Charlie as Eddie
works as agent for him so Darwash is entitled to pay for the amount of €3500 only which was
quoted in quotation and will not be entitled to pay €500 extra as acceptance was taken only for
the sum of €3500.
Moreover, now that the work or the contractual obligation is not fulfilled properly,
Charlie shall be made liable for it as a principle is generally made liable for the acts of agent.
Darwash is entitle to claim the remedy for non-performance of contract from Charlie as the
contract was being framed between Charlie and Darwash and not Eddie. In case the contractual
obligation is not being fulfilled appropriately, Darwash can claim the remedies which includes
firstly damages which is the award of money aimed to compensate innocent party as its main
purpose is only to place injured party to the position if the contract was performed (Dempsey and
et. al., 2021). Then is repudiation which is available for breach of contract and involves ending
the contract. Third is rescission which is available only on discretion of judge that is aimed to
place parties at pre contractual position (Smits, 2017). Fourth is specific performance of
contract which is available at discretion of the judiciary as it is the order of court that requires a
party to perform the contractual obligation. It is available when damages are considered as the
inadequate remedy (Knapp, Crystal and Prince, 2019). Fifth is injunction which is mainly of
three types that includes interlocutory which means temporary injunction till the hearing of the
court. Second is prohibitory wherein court orders the party to not do something. Third is
mandatory which is an order that the party should do something (Fabre-Magnan, 2021).
Under this case scenario, Darwash can claim either damages as the remedy or specific
performance of contract so that it can be placed in same position as if contract was performed.

The rights under the English law for the contract includes firstly full disclosure of
information wherein the parties must disclose all materiel facts to the other party so that there is
transparency being maintained (Evans, 2018). Then is right to timely consideration wherein the
party must provide the amount of consideration to the other party on time as there must not be
any delay in it (Jerez, 2017).
Hence it can be said that there is a relationship of principle and agent between Charlie
and Eddie so Darwash must claim its remedy from Charlie and not Eddie as it was acting on
behalf of Charlie and not independently because contract was made between Charlie and
Darwash and not Eddie.

CONCLUSION
It is concluded from this essay that business law and ethics is two different concepts
wherein the law sets the boundaries within which the organisations are required to work while
ethics are guiding principles. The contract is an essential legislation under business law which
deals with agreements made between the parties. Its essential ingredients include offer by one
party, the acceptance made by other, an intent to creation of legal relations and the amount of
consideration. There are many remedies under law of contract which includes damages, specific
performance of contract, injunction, repudiation, rescission, etc.

REFERENCES
Books and Journals
Arvind, T.T. and Steele, J. eds., 2020. Contract Law and the Legislature: Autonomy,
Expectations, and the Making of Legal Doctrine. Bloomsbury Publishing.
Calahorrano Latorre, E.R., 2020. Contract Law and Emergency: Institution Recycle and Return
of Principles in Covid-19 Context. Ius Humani, Revista de Derecho. 9. p.159.
Ciulla, J.B. and Scharding, T.K. eds., 2019. Ethical business leadership in troubling times.
Edward Elgar Publishing.
Dempsey, J., and et. al., 2021. Breaking the Privacy Gridlock: A Broader Look at
Remedies. Available at SSRN 3839711.
Etzler, J.G., 2020. Equitable Compensation and the Regulation of Fiduciary Relationships.
In Restitution and Equity (pp. 235-257). Informa Law from Routledge.
Evans, M., 2018. Effectiveness of Available Civil Remedies as a Factor Influencing Prosecution
of Economic Espionage Act Cases. Washburn LJ. 57. p.463.
Fabre-Magnan, M., 2021. A Theory of Contract Law: What Meaning and for What
Purpose?. European Review of Contract Law. 17(2). pp.198-210.
Garro, A.M., and et. al., 2021. Use of the UNIDROIT Principles to Interpret and Supplement
Domestic Contract Law (Vol. 51). Springer Nature.
Heaton, J.B., 2017. The" Long Term" in Corporate Law. The Business Lawyer. 72(2). pp.353-
366.
Hess, B., 2018. The Private-Public Law Divide in International Dispute Resolution. Brill.
Jerez, J.C., 2017. The Unexpected Change of Circumstances Under American and Spanish
Contract Law: Different Concepts, Different Methodology, Similar
Outcomes. European Review of Private Law. 25(5).
Karpavithra, S. and Karvittal, S., 2017. The Role of Indian Ethics and Values. International
Journal of Engineering and Management Research (IJEMR). 7(2). pp.560-569.
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2019. Problems in Contract Law: cases and
materials. Aspen Publishers.
Koven, S.G. and Perez, A., 2021. Corruption and Business Ethics. In Oxford Research
Encyclopedia of Business and Management.
Lee, K., 2021. Discrimination as Anti-Ethical: Achieving Systemic Change in Large Law
Firms. Ohio State Legal Studies Research Paper, (621).
Luts, V.V., and et. al., 2021. Convergence of the Contract Law of Ukraine and EU Member
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Nunes, M.F. and Park, C.L., 2021. Business Ethics. In Business Ethics and Environmental
Fraud (pp. 1-45). Palgrave Macmillan, Cham.
Skelton, A., 2020. Restitution and contract.
Smits, J.M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.
Zudilkin, D., 2021. Keys to business ethics improvement in Belarus.