Business Law and Ethics Project: Contract, Governance, and Enron

This project delves into the realms of business law and ethics, exploring key concepts such as contract law, corporate governance, and ethical considerations within business operations. It begins with an examination of contract law principles, including the essential elements of a contract like offer, acceptance, and consideration, using seminal cases such as Harvey vs. Facey and Fisher vs. Bell to illustrate these concepts. The project then proceeds to analyze various aspects of corporate governance, touching upon the importance of ethical practices and the role of the legal system, differentiating between civil and criminal proceedings. Furthermore, it provides advice on the existence of binding contracts in specific scenarios, followed by a discussion of available remedies for breaches of contract, such as compensation and specific performance. The second part of the project focuses on ethical corporate governance, specifically through a detailed case study of the Enron Corporation scandal and its implications, and the role of the Sabanes-Oxley Act of 2002 in addressing corporate financial fraud. The project underscores the significance of ethical conduct, and the importance of aligning business objectives with ethical standards to prevent negative outcomes. This project offers a comprehensive overview of the practical application of business law and ethical principles in real-world scenarios.

Business Law and
Ethics

Contents
Introduction (Project 1)................................................................................................................3
Main body (Project 1)..................................................................................................................3
Conclusion (Project 1).................................................................................................................6
Introduction (Project 2)................................................................................................................7
Main body (Project 2)..................................................................................................................7
Conclusion (Project 2)...............................................................................................................10
REFERENCES..............................................................................................................................11

Introduction (Project 1)
Business law is an institution regulating industry and trade, and is also regarded a subset of
common law, dealing with both private and public law concerns (Crane, Matten and Spence,
2019). Business ethics is characterised as a method of properly carrying out operational
activities. This part of the report would ensure that the relevant statute and regulations and even
the judicial process adapted for the proper resolution of individual case study that is explained
below.
Main body (Project 1)
Contract law and its blue prints
The contract is declared "to be legally enforceable on the both sides." It has also been studied
that contract law is regarded as the essential law followed by a person in his or her professional
life. The arrangement needs to be in verbal form and even in written form (Weir, 2020). It is
necessary to have two parties who have made a specific arrangement to enter into a particular
contract. A contract specifies various obligations and duties and defines the terms or conditions
of a contractual arrangement. It is necessary for all contractual parties to follow separate
conditions of the contract and if either one party decides to violate the agreement then it is that
entity 's responsibility to repay the other party who is affected. Besides that, it is necessary for
the injured party to have proof in judgment that there is a legal contract between the two sides
and that the damage is sustained only by one party due to breach of the agreement. In order to
assess the fact that a legal contract exists between both the parties, the court will define facts as
to whether an agreement occurs between two parties or not.
In particular, agreement must dominate over the legislation condition of the contract and
approval of it by a fair and lawful agreement. It requires approval as well as recognition which
assists the entry into contractual contract. Offer is known to be "a symbol of readiness or
eagerness to compromise to such terms from one group to another." Giving acceptance is distinct
from offering to another. There is a disparity between two Harvey vs Facey (1893) seminal
decisions that occur as a result of telegram submitted by applicant invent inquiry for low
property's value. The appellant decides the cheap price and then forward it by telegram (About
Harvey vs Facey case, 2013). Afterwards, the applicant forwards the mail that indicates he
intends to buy property at a fixed low price which has been withheld opposed the idea by the

defendant. The complainant then enters court and this means the defendant has contravened the
deal. The Privy Council then stated that the telegram wherein low rates were decided was
deemed an offer to sell and the bid submitted by the defendant's accepted appellant. Therefore,
the sides do not have a binding deal. The Other seminal decision is called Fisher vs Bell (1961),
in which the courts listed all shows in shops or retail outlets as an offer to sell and the individual
who willingly buys these items is decided as a retailer bid (About Fisher vs Bell case, 2016).
The next step is considered as recognition, to shape a contract. The person accepting an offer
from another is known as acceptance. In the aspect of cancelation of an acceptance, this can only
be cancelled when this comes to knowledge of an individual (Madden, 2019). Affirmation
cannot be reversed until it is in the sense of transmitting information and where the sides are
bound together by law. Moreover, the consideration for a legitimate contract is called a second
element. It's just what the parties offer for the reason of forming a deal. It is in the context of
financing and there are also different commitments to do or refrain from doing something for
each other.
It is necessary or mandatory for all parties to the contract to have the intention of entered into a
legal agreement at the time of contract formation. In general, if the contract is concluded
between both the husband and the wife or father and the son, and so on, then the contract is
deemed invalid. The seminal decision called Balfour vs Balfour states that there is an
arrangement between wife and husband then the court stated that there is no legitimate reason
between wife and husband, and that it is not established as a contractual obligation.
Court system in relation to English legal system and advise the parties above which court action
to pursue.
In the current aspect, the nation has stressed the use of legal procedures to sustain peace in the
region. In addition, the English legal system highlighted the need to take reasonable actions to
produce effective outcomes. In order to settle these types of cases, the justice system is very
critical in that it divides into two sections that are considered criminal and civil. Explanation
given below for specific judicial system:
Civil Proceedings: It is decided as a significant matter and shall be settled in general by the
judiciary. The Legal Issues are considered to be a less complicated matter to be settled by court
judges (Ferrell, Ferrell and Hair, 2019). There are various forms of court during civil trials, such

as District Court, Supreme Court, High Court, and so on. Hence the majority of cases which
must be decided under a given country's legal procedure.
Criminal Proceedings: It is important in the case where crime is perceived to be complicated in
nature and effects a lot of public in difficulty. In judicial cases, there are various types of legal
trials in which the matter is decided. There are various forms of judicial trials, such as District
Court, Court of Appeal, Crown Court etc. The magistrate then stressed the need to solve full
categories of cases within a fixed period of time.
It is necessary for both parties to take assistance from the nation court after reviewing the
ultimate case and growing knowledge of court proceedings (Mea and Sims, 2019). It is helpful
for successful settlement of the cases relevant to the question of compromise. Furthermore, if
doubtful parties are unable to settle any kind of problem by area code then in this case they will
take support from other court to draw a conclusion. Although if the problematic party appealed
to another court then it takes way too long to settle certain kinds of disputes or difficulties. To
aid in this, it is necessary for doubtful parties to enhance their skills and knowledge regarding the
nation's legal process to settle issues in great style. The lengthy process has to be practised to
address complex problems in an enhanced manner.
Advise Hilary as to whether binding as whether binding contract exist within herself and each of
following people i.e., Eleanor, Amy and Olivia.
Case 1: In this case, the advertising provided by Hilary is considered as an invite to bid. The
court has stated that advertising is deemed an opportunity to bid. Besides this, Eleanor proposed
to Hilary at lower price and Hilary rejected the bid only because of lower price offered. After
that, as Hillary proposes to Eleanor but Eleanor rejected it and there is a disagreement or
disagreements emerge between both sides.
Case 2: It is viewed as a general law that cannot be withdrawn after approval as it is issued using
postal service when it is held in transmitting form and all sides are obliged by a clear
arrangement when the document is submitted by the acceptor. By using this method, this will
also infer with the theory of truth or knowledge that Amy is unlikely to withdraw acceptance
because she has already submitted acceptance letters. This is known as Entores vs Far Miles East
company's decision.

Case 3: Hilary will be willing to hold the note as an opportunity to bid. Olivia made painting,
that is linked to the purchase of artwork, which had been refused by Hilary, it is perceived to be a
new deal between the two parties.
Explain and discuss various remedies available to the parties.
Contract legislation provides different measures or alternatives, such as reimbursement as
well as individual results. Compensation or refund shall be regarded as a remedy which the Court
shall award in accordance with some kind of financial damages (Bull and Ridley-Duff, 2019).
They offer funds or other benefits to a party experiencing a loss as a result of contract
termination. The other solution or issue is reasonable results in lieu of this, which means there
are certain circumstances or cases under which compensation will not be assessed as an
acceptable or sufficient solution. In these types of cases, the court can approve the direct contract
relating to real results.
These two forms of remedy are decided by the Court for the purpose of announcing unique
decision in a given situation and to offer protection to the party found innocent in any case.
Conclusion (Project 1)
On the behalf of above part of report this can be stated that business law is regarded as a
very relevant law connected with different kind of corporation’s case. In any deal, relation to
term or conditions, it is important to have both a bid and approval. This part of the report
concludes that the relevant statute and regulations and even the legal process is followed in a
proper manner to handle individual case study.

Introduction (Project 2)
Business law as well as ethics are an integral aspect of the professional enterprise, since they
guarantee the action or operation is performed in an acceptable way and intended to produce
positive outcomes (de Bakker, Rasche and Ponte, 2019). This report is based on Enron
Corporation and it will also focus on the Sabane-Oxley Act 2002 controversy. In broad manner,
the Enron company presented their financial information to stakeholders by manipulating data.
Due to which company paid huge amount of penalty and faced major issues. In relation to this,
role of Sabane-Oxley Act 2002 has been described in detailed manner.
Main body (Project 2)
Discuss this case in relation to ethical corporate governance and the Sabane-Oxley Act of 2002
Enron corporation case scenario: In 2001, it was observed that the financial condition of Enron
's company was continuously stated by the institutionally mechanism through which the financial
fraud is measured.
Ethical corporate governance: It is known as a method that seeks to ensure that each company
carries out its function in a certain way that results in keeping an acceptable balance between
economic factors. In other words, ECG relates to the procedures and strategies that an
organisation has in order to resolve problems pertaining to how it is operated and performs day-
to-day operations. It is important to note that there are businesses mainly interested in creating a
product or service that is used for profit production (Arnold, Beauchamp and Bowie, 2019).
However, this purpose must be matched with protection to ensure that a business seeks gain
without crossing boundaries into the domains of unethical conduct. Besides this, each company
takes on several choices, but it is also necessary to ensure that it does not cause any sort of
problems for both the public and investors. Furthermore, ethical corporate governance gives its
opinion as an entity insists on maximum resource use which contributes to the reduction of any
questions or challenges for the general public. ECG is deemed essential for timely achievement
of the goal of companies. It is also critical that the operations or tasks of an enterprise entity must
be carried out or coordinated in an ethical way, but in the sense of an entity they struggle in a
particular field and result in broad penalties.

Sabane-Oxley Act of 2002: In such situation, the investor insists on spending their money in
some market venture to gain profitability in the potential. There are numerous institutions that
send the public false data or knowledge in mentality of investors, and this results in the
development of problems. Therefore, this Sabane-Oxley Act, 2000 started to track and regulate
all of this operation or work in an effective way to maintain that no company can supply to its
stockholder with any sort of fraud data and information. In addition, separate financial
knowledge is necessary to communicate in an acceptable way in the company. Auditing is
necessary to perform or coordinate to obtain correct knowledge to the stakeholder (Brenkert,
2019). In addition, the main aim of enforcing this act is to ensure that no corporate entity has
been established by the corporation to manipulate some sort of legislation and sought to collect
knowledge that is related to the controversy. There are different forms of regulations to aid with
this, ensuring that of corporate entity documentation is kept in a suitable way and needs to be
relevant to commercial operations or work. In this case, the company is concentrated on
upholding the rules and legislation or statutes otherwise they can incur heavy fines for the given
time frame. It is so because this rule offers a way in which business entities are entitled to
present and communicate their financial information which is authorized by auditor and prepared
in an accurate manner. Though, this act is not limited till presentation of financial information.
The main motive behind this act is to guiding different sectors companies to conduct their
operations and activities in accordance of proper ethical rules and regulations so that everyone
can get benefited.
In previous years, there are many companies that plan various kinds of controversies, resulting in
multiple types of problems or concerns for stakeholders. In addition, the primary objective of
introducing this act in relation to the Enron Company as they are operating or planning one or
two is a controversy in this field related to false accounting statements. Here, the financial
statements and accounting statement provided by company is deemed to be inaccurate and have
detrimental impact on the stockholder. They are facing a loss of $74 billion due to fake entity's
financial statement. The company was classified or split into bankruptcy after planning this kind
of controversy that comes under the top 10 biggest corruption-related controversy. This scandal
is seen as a negative thing because the institution's employee has lost their work without earning
any sort of compensation. The defendant was sentenced with 24-year imprisonment in this case.
Discussion of the case in terms of Corporate Governance and ethics

It is necessary to consider the corporate governance as well as the importance of ethics within the
business, in situations where company management has been attempted to improve its profits.
Organization profit margin would rise by increasing capital from investors, and organisation that
is deemed unethical as they supplied illegal details about finance to shareholders. The fake
knowledge that the company provided was focused on attracting the number of investors towards
them. Corporate governance offers recommendations to the company aimed at providing
members or customers with the real truth or facts about the performance. It is the obligation or
task of top management in an enterprise to take the right choices that will improve the business
in the future (Darwish and Abdeldayem, 2019). But in connection to this situation, the
management did not take any obligation which resulted in high pressure and also to a growth in
the debt in the future.
As far as the ethical principles are concerned, it is essential for Enron Corporation that they
should have decide about the workers and clients’ future, before engaging in any controversy.
Furthermore, the controversy has been found large in scope and the company is not able to
coordinate the operation and work in the future. Thus, it is also important for an organisation to
meet all terms and conditions otherwise a lot of problems would be created in the potential.
Corporate governance offers consideration of effective decision-making that is useful to both the
public and the customer who is essential to the corporation.
Discussion of the case in terms of Sabane-Oxley Act, 2002.
These rules emerged in the aftermath of the Enron Corporation fiasco. The statute suggests that
Enron Company's corporate enterprise operation was not under to all legal practises and
regulations. According to this act, making an appropriate accounting statement is essential for
the company. If the company did not produce any form of accounting statement mandated by
statute, it would enforce heavy penalties. Furthermore, it is necessary that adequate auditing
should be conducted and it was examined that some organisations were not doing their work per
the law and failure of audit resulted in the greatest controversy being created by company
management (Miklian, Alluri and Katsos, 2019). In addition, the key justification for the creation
or preservation of an accounting statement is to ensure that creditors are able to determine the
position or circumstance of the Entity in which they consider that the entity is suitable for

investment purposes or not. Consequently, upholding the correct accounting norm is essential for
the reputation or credibility of the company.
Thus, the beginning of law is defined as a responsibility of any company accountant. It is also
the duty of the institution's auditor to obey the legislation in a specific manner. If there are some
kind of disputes that happen against the institution's accountant, then companies may face a lot of
problems or difficulties for that they are entitled to incur fines. Controversy can be large in
nature in favour of this, the company entity cannot be able to plan some form of commercial
operation or work in the future. In comparison, corporate governance will consider why the
company is reluctant to make any type of judgement that is favourable to both the public and the
customer that is important to the corporation. High risk taking management skills is the key
cause for all this sort of problem.
Conclusion (Project 2)
Business law is critical in order to deal with company practises or operations. While this Sabane-
Oxley Act 2002 is called the correct legislation of existence as it guarantees that all company
accounts or audits are subject to the legislation. To assist with this, it is necessary for companies
to manage financial records by correctly using the required details. Since misrepresentation
results can make negative effects on the corporate brand reputation or credibility in the markets
in front of the community.

REFERENCES
Books and journal:
Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press, USA.
Weir, M., 2020. Law and ethics in complementary medicine: A handbook for practitioners in
Australia and New Zealand. Routledge.
Madden, T.M., 2019. Law and Strategy and Ethics. Geo. J. Legal Ethics, 32, p.181.
Ferrell, O.C., Harrison, D.E., Ferrell, L. and Hair, J.F., 2019. Business ethics, corporate social
responsibility, and brand attitudes: An exploratory study. Journal of Business
Research, 95, pp.491-501.
Mea, W.J. and Sims, R.R., 2019. Human dignity-centered business ethics: A conceptual
framework for business leaders. Journal of Business Ethics, 160(1), pp.53-69.
Bull, M. and Ridley-Duff, R., 2019. Towards an appreciation of ethics in social enterprise
business models. Journal of Business Ethics, 159(3), pp.619-634.
de Bakker, F.G., Rasche, A. and Ponte, S., 2019. Multi-stakeholder initiatives on sustainability:
A cross-disciplinary review and research agenda for business ethics. Business Ethics
Quarterly, 29(3), pp.343-383.
Arnold, D.G., Beauchamp, T.L. and Bowie, N.E., 2019. Ethical theory and business. Cambridge
University Press.
Brenkert, G.G., 2019. Mind the gap! The challenges and limits of (Global) business
ethics. Journal of Business Ethics, 155(4), pp.917-930.
Darwish, S. and Abdeldayem, M.M., 2019. Risk Management and Business Ethics: Relations
and Impacts in the GCC. International Journal of Civil Engineering and
Technology, 10(10), pp.489-504.
Miklian, J., Alluri, R.M. and Katsos, J.E. eds., 2019. Business, peacebuilding and sustainable
development. Routledge.
Online:
About Harvey vs Facey case, 2013. [online] available through:<
http://www.casebriefsummary.com/harvey-v-facey-1893/ >
About Fisher vs Bell case, 2016. [online] available through:<
https://lawcasesummaries.com/knowledge-base/fisher-v-bell-1961-qb-394/>