Business Law and Ethics Report: Enron Scandal and Legal Framework

This report delves into the realms of business law and ethics, presenting a comprehensive analysis of key concepts and real-world applications. The report is divided into two primary sections. The first section focuses on contract law, defining its principles, outlining the essential elements of a contract, and examining the English court system. It then analyzes a case scenario involving Hilary's advertising business, evaluating the existence of binding contracts between Hilary and other parties (Eleanor, Amy, and Olivia), and exploring available remedies for breaches of contract. The second section shifts its focus to ethical corporate governance, using the Enron scandal as a case study. It discusses the implications of the scandal in relation to ethical corporate governance principles and the Sarbanes-Oxley Act of 2002, highlighting the significance of these elements in maintaining financial stability and investor trust. The report concludes by emphasizing the interconnectedness of business law and ethics in fostering responsible business practices and preventing fraudulent activities.

BUSINESS LAW AND
ETHICS

Table of Contents
MAIN BODY...................................................................................................................................3
PROJECT-1.....................................................................................................................................3
Following question is to be answered .............................................................................................3
Define contract law and describe all the blue prints of a contract..............................................3
Explain the court system in relation to the English legal system and advise the parties above
which court action to pursue.......................................................................................................4
Advise Hilary as to whether binding contracts exist between herself and each of the following
people: Eleanor, Amy and Olivia................................................................................................4
Explain and discuss the various remedies available to the parties..............................................4
PROJECT-2.....................................................................................................................................5
Discuss this case in relation to ethical corporate governance and the Sabane-Oxley Act of
2002. ...........................................................................................................................................5
CONCLUSION................................................................................................................................6
REFRENCE.....................................................................................................................................7

INTRODUCTION
Business is the process that is used for performing of certain activities that is helpful
making production of product and services possible. In order to provide legality to such
transactions business laws and contract laws are formed that helps such organization to work
under the framework specified by the government. Ethics are that kind of laws which are there to
create discipline and order at workplace. Such set of rules is being formed to maintain discipline
and order at workplace. Both the law covers wider scope and nature is dynamic of these laws. In
this file two parts are there first part is based on a case scenario and questions has to be answered
based on this. The second part is based a case study of Enron scandal and its relevancy with
corporate governance, Sabane-Oxley Act of 2002.
MAIN BODY
PROJECT-1
Case scenario: In this case Hilary advertising is an printing press specialised in trade and
charges £15,000. Eleanor has offered Hilary £10,000 for the printing press and regrading this
wrote a post to her. Hilary again send a post that she can accept order in £13,000. She again
wrote to Elanor that accepting offer has been made of £10,000. After posting the letter she again
changed her mind denoted to ignore the letter by sending fax. Hillary held summer sale at her
gallery that is having notice stating that painting by Trumpeter is on sale for £1 to customer that
comes first. Olivia has been waiting outside the shop for two days before sale was to be
commenced and as the sale started Hilary said that painting is not for sale any more.
Following question is to be answered
Define contract law and describe all the blue prints of a contract
Contract laws are that kind of laws that has been formed in order to make transactions
related to business activities to be formed (Key, Azab and Clark, 2019). These laws makes
business activities to be conducted in smooth manner. Agreement formed within business is
considered to be a valid contract only when elements like offer, acceptance, consideration and
legality is maintained. These laws are there for dealing with building of relations with strong
base. An contract is considered to be legal when it is been based over activity that is legal within
the eyes of law.

Explain the court system in relation to the English legal system and advise the parties above
which court action to pursue
Legal system of UK has formed various laws that has been formed to cover various
aspects present within the country. Laws in UK deals with various activities that has been
dealing with crimes and wrongs that is happening within the society. These rules and regulations
formed by the government deals with criminal and civil cases which are impacting society. In
order to make smooth functioning of laws judiciary has been formed that consists of various
courts. These courts are being given power as per there jurisdiction. Supreme Court is the last
court and judgement passed by it is applicable to all courts that exists within a legal system. Then
comes High Court that deals with all kind of cases which has been passed from lower courts. In
this three divisions are there that is queens bench, court of appeal and family courts. In queens
bench only criminal cases are heard, court of appeal deals with civil related cases. Then comes
family bench which takes matters related to marriage or any kind of family dispute that involves
relationship's within it. Then comes lower court that hears the matters or cases for first instance.
Since in the given scenario contract law is the base law that is applied and is of civil
nature. So, court dealing with civil cases is going to be handle the case.
Advise Hilary as to whether binding contracts exist between herself and each of the following
people: Eleanor, Amy and Olivia
Binding contracts means legal agreements that is existing between parties and is legally
enforceable. This can be both oral and written form. Only agreements should exists in which
elements of contract is involved. Upon considering the above definition it can be observed that
contract has been formed between Eleanor, Amy and Olivia in both oral, written form. Due to
presence of offer and acceptance(Green, 2018).
Explain and discuss the various remedies available to the parties
In contract wrong committed is regarding breach of contract and remedies regarding it
are damages, repudiation, recession, specific performance, injunction and restitutory awards.
Damages in this money is being compensated to the claimant and is applied in case of breach of
contract. In repudiation ending of contract is required because of breach and is given under
certain condition that has opposed breach. Rescission is available over direction given by judge.
Such kind of remedy condition should exits pre-contractually. Specific performance remedy

available when there is any kind of contractual obligation. For granting this the court should seek
for damages with adequate remedy, type of contract and equity within a order is also required.
PROJECT-2
Case Scenario: Enron scandal is an organization that is based in America and become
bankrupted. It is one of the five largest audit and accountancy of partnership in the world. This is
considered to be one of the largest fraud in the history of America. This organization was formed
after merging of Huston Natural Gas and Inter North. Jeffrey Skilling has been hired over
developing of staff of executive which has been used to cover loopholes, special purpose which
has been hired in order to make poor financing report. This has was hide by the organization that
it is dealing with poor debts and failed projects. The shareholders of Enron has filed law suit of
forty billion dollar after seeing the stock rate going down to less than a dollar in mid 2000. Also
the deal offered by its rival failed. Then investigation was started by U.S. Securities and
Exchange Commission. An case was filed under code of United States Bankruptcy Code. Arthur
Anderson was found guilty over illegally destroying the documents that is relevant for
investigation. Also license to audit is being cancelled by public organization was closed.
Till the time Supreme Court gave its judgement the organization lost majority of
customers but still shareholders received limited returns out of the lawsuit.
Discuss this case in relation to ethical corporate governance and the Sabane-Oxley Act of 2002.
Corporate governance in this system rules, practices and process that helps in directing
and controlling of firm. Under governance there is balanced involved which seeks over gaining
interest within an organization. Such governance provide framework for making achieving of
goals and objectives. Also this makes management to be focused over forming plan of action and
measuring aspects related to internal control (Dorff and Gary, 2016). In this kind of governance
refiring of specific rules , control and resolution is being formed for giving direction over
corporate behaviour.
Advice of shareholders is important which has been indirectly being impacting
governance. Board of directors is uncertain that mainly involves equity within its valuation. In
this importance of an organization over investors is there to show directions through business
integrity. If there is good governance then building of trust is possible upon investor. This has

been resulting into corporate governance which makes financial stability possible which makes
long term investment possible. It makes participation of an organization possible within the
market. In communicating corporate governance is one of the most key component over building
relationship with community and investors.
Sarbanes-Oxley Act of 2002: In this act various amendment has been made to deal with
frauds and has been formed by U.S Congress on 30th July over the year that has been protecting
investors in making corporation possible. The Act has been formed to deal with frauds and strict
reforms has been formed which has been helping in forming of reforms that has amended to
punish lawbreakers. In this act response over finance frauds scandals that involved publicly.
Many kinds of frauds is there which has impacted trust formation and created issues. This has
been impacting trustworthiness in order to create demand which has been impacting regulatory
standard form decades (Alahmad, and Silverman, 2017).
Corporate governance is being formed to deal with corporate functions and process that is
being followed by management to control activities of a business for maintaining of ethics. It is
related to the case in a way that this helps in dealing with factors related to fraud. The SOX Act
2002 is related with the case in a way that it has been formed after the fraud in order to avoid any
of them in future.
CONCLUSION
From the above file it can be concluded that concept of business law and ethics is related
to each other. Both of them helps in dealing with various aspects of frauds. This file is divided
into two part in which first part contains a case scenario that is related to contract law and
questions regarding it is being answered. In second part an case study is being covered that is
related to corporate governance and has lead to formation of SOX Act 2000 that is dealing with
frauds in better manner.

REFRENCE
Books and journals
Alahmad, G. and Silverman, H., 2017. Research Ethics Governance in the Arab Region–Saudi
Arabia. In Research Ethics in the Arab Region (pp. 229-235). Springer, Cham.
Dorff, E.N. and Gary, M., 2016. Donations from Ill-Gotten Gain in Jewish Law and Ethics and
in American Law. Journal of Jewish Ethics. 2(1). pp.1-40.
Green, B., 2018. The Challenges and Rewards of Teaching Legal Ethics. Prof. Law. 25. p.3.
Key, T.M., Azab, C. and Clark, T., 2019. Embedded ethics: How complex systems and
structures guide ethical outcomes. Business Horizons.62(3). pp.327-336.
Ostas, D.T., 2018. Ethics of Tax Interpretation. Journal of Business Ethics. pp.1-12.
Paul, P., 2019. A gap analysis of teaching marketing ethics: Desired versus current state. Journal
of Education for Business.94(7). pp.460-470.