Business Law and Ethics: Contract, Remedies and Corporate Governance

This assignment comprises an individual essay and a report on business law and ethics. The essay delves into contract law, exploring its blueprints, the court system within the English legal framework, and the existence of binding contracts in various scenarios. It also examines available remedies for parties involved in contract disputes. The report focuses on ethical corporate governance, using the Enron case as a prime example, and analyzes the implications of the Sarbanes-Oxley Act of 2002. The essay discusses the key elements of a valid contract, including offer, acceptance, mutuality, consideration, legality, contractual capacity, and intent, and applies these principles to advise on whether binding contracts exist in three distinct cases. Furthermore, the report explores the ethical dimensions of corporate governance and the role of the Sarbanes-Oxley Act in addressing accounting scandals. The assignment aims to provide a comprehensive understanding of business law and ethics, contract law, and corporate governance within the context of real-world scenarios.

Business Law and
Ethics

Table of Contents
INDIVIDUAL ESSAY....................................................................................................................3
Introduction............................................................................................................................3
Contract law and its blue prints..............................................................................................3
Court system in relation to the English legal system.............................................................4
Advise Hilary as whether binding contract exists..................................................................5
Explain and discuss various remedies available to the parties...............................................6
Conclusion:......................................................................................................................................6
INDIVIDUAL REPORT ................................................................................................................7
Introduction ...........................................................................................................................7
Discuss the case in context to ethical corporate governance along with Sabance-Oxley Act
2002........................................................................................................................................7
REFERENCES..............................................................................................................................11

INDIVIDUAL ESSAY
Introduction
Business law & ethics define as the kind of law which ensures that each and every
activity performed within the organisation must be ethical. It is said that business ethics are
usually refers to the method in which all the business functions must be done in an effective
manner by adopting all the ethical and legal factors (Beatty, Samuelson and Abril, 2018). This is
the first part of the report which will ensure that there must be proper law and court process
which will assist in resolving all the cases in a well defined manner.
Contract law and its blue prints
Contract is a agreement that is legally binding two parties & is set of principles that is
guiding all the legal contracts. There are some legal aspects of a contract that has to be Present in
order to make a contract legal:
Offer: Offer is one of the initial aspect of creation of contract (Tzafestas, 2018). The person or
a entity has to create a intention to enter in a valid contract.
Acceptance: A contract does not exist legally without a offer is accepting the proposed offer.
Without a mutual consist of both parties a valid contract cannot be created. Acceptance can
never be unambiguous that it should be expressed by performance, deeds or words.
Mutuality: The contracting parties have to agree to a specific agreement that is parties have to
understood and agree to all the terms and substances of a contract. There has to be “meeting of
minds” to give rise to a legal contract.
Consideration: It is necessary that every contract is created for consideration in return. Both the
parties have to provided some value (Kubasek and et. al., 2020).
Legality: Legality is a subject matter that is very crucial for a contract to be valid. There is need
to follow all the statuary regulations according to which contract is created.
There is no requirement that a contract has to be always be in writing.
Contractual capacity:
A person may posses contractual capacity to enter in a contract if they posses legal ability (Weir,
2020). In case of minor there is need to take parents or any guardian permission. If there is no
legal ability then a person cannot enter in any type of legal contract and that contract can't
legally bound a person.

Contractual intent:
A contract may not exist if two parties are not subjectively willing to enter in the contract.
Contract law is governed by a common law throughout a county. Law provides remedies to the
aggrieved party if all the elements are Present in the contract.
Above discussed are the some of crucial aspects of a legal contract that has to be present
in every legal contract. If any of the element is missing in a contract then it does not lead to
creation of a valid justified contract that can be presented in court. Hence, it is necessary that
while creation of a legal contract it must be assured that all the aspects are properly met.
Court system in relation to the English legal system
In the present scenario there are certain aspects that have to be followed to enhance the
regulatory system, English legal system is focussing on a judiciary system that is divided in two
pats that is criminal and civil law (Mnif and Znazen, 2020). Description of this judiciary system
is discussed below:
A unique feature that is part of English law is related to doctrine of judicial precedents
that is reporting of court decision that is from a binding source of law affecting future decision
making. Judge is bounded by court decisions of superior jurisdiction and not for the courts that
are inferior.
Classification of law:
Criminal law: It is concern with committing any offence that is against the society it includes all
types of crones. Criminals are prosecuted by state in this case.
Civil Law: Civil law is concern with disputes that are arising between private parties such as
employer employee or consumer & supplier (Nersessian, 2018). The injured party can sue in
court for obtaining injunction or damages.
Civil proceedings:
It is one of the critical aspects that has to be solved using judiciary premises. All the civil matters
are to be considered for solving with right judgement. In case of civil proceedings there has to be
focus on court type that is country court, supreme court magistrate court and others. Civil law is
focussed on country court and some complex cases that are to be solved before trying a case.

There has to be focus on managing of civil cases to ensure its processing in a specific time
period.
After the case has been assessed there is a need to focus on enhancement of court procedure for
increase the court assistance (Osemy, 2020). Court can have benefits of solving the case but in
some cases of one particular court is not able to solve the case then there is referral to another
court. If the disputed part is approaching other court then sometimes it can lead to procedure
getting delayed for a long time.
There are some legislations that are part of parliament act such as principal legislation is
according to UK parliament.
Advise Hilary as whether binding contract exists
Case 1:
In the present case advertisement that was adopted by Hillary is the offer to sale a product. This
happen in a similar case of Partridge vs Cartifner court had a statement that advertisement on a
public platform is easily accessible by anybody and it is considered as an invitation to offer. In
present case it was made by Eleanor & Hilary when the offer was made by Hilary to sale a
product (Peterson, McDevitt and Soviak, 2018). It was rejected by Eleanor and there was no
mutual agreements to a specific amount that lead to no acceptance of offer and then this lead to
no creation of a valid legal contract.
Case 2:
The rule is based on exception that if in case acceptance is not by use of postal means than
acceptance cannot be revoked if it has been in the transmission mode and both the parties are
bounded by this contract (Shams, 2020). The application is based on factors that Amy did not
revoked the acceptance as she already posted the acceptance letter. But after she posted the letter
she didn't wanted to accept the offer changed her mind and this lead to non creation of contract
between Hilary and Amy as the fax that Consist of denial of offer reached early before the post.
Case 3:
In the the case Hilary and Olivia it is considered as invitation to offer. In this again there was no
legal contract that was created to be bounding the parties as there was no legal acceptance by

Hilary as the offer was rejected and thus parties are not legally bounded to perform the partial or
whole aspects that were part of a contract.
Explain and discuss various remedies available to the parties
There are remedies that are part of contract law that can be specific performance of the actual
contract, damages of the loss or injunction (Serpanos, 2018). Compensation has to be awarded
by the court if there is a breach of contract.
Damages are measured according to the loss suffered by the party. The loss can arise in the
natural course of breach of contract. A party may not be liable to loss that is not a probable
consequence of the breach of contract.
There are no standards to of the actual damage that is result of non performance of act.
Remedies are according to the Present situation (Purcinelli, 2019). For example in case of Amy
and Hilary there can be a compensation request as Amy already accepted the offer and
acceptance was already posted before Amy decided of rejecting the offer. In Hilary and Elenaor
there was no acceptance as Elenaor there is need of specific performance of compensation as
Elenor already declined offer and there has been no legal contract that has been created between
these two parties.
In case of every legal contract above discussed are some of the remedies that are easily
available and can be used by the court according to the situation. The calculation of damages
solely depends on the type of case and the loss type. That is standard measure of damage can be
the amount that can lead to providing of a substitute according to the benefit that could have
been received if contract was performed. In those cases where the cost is speculative the party
can recover all the damages by performing the obligations that were part of the contract. In
present case there are very least chances of specific performance in all the three situations but in
case of present case study Amy earlier accepted the offer and post was already sent so there can
be some damages that Hilary can ask according to the scenario. But in other two cases there was
a clear rejection of the offer and that led to no legal boundaries that were created in case of a
legal contract.

Conclusion:
From the above mentioned aspects it can be said that there are some specific elements of
a contract law. It can be said that business and ethics law that are very crucial for enhancing the
validity of a contract. If all such element are part of a contract only in that case it can be treated
as a valid contract. In the present case there were three different scenarios that are being reflect
and according to that court has to make a particular decision related to damages or specific
performance.
INDIVIDUAL REPORT
Introduction
In every business organisation, business law as well as ethics are quite essential element
which will aid in ensuring that all the activities are performed in an effective manner
(Dierksmeier and Seele, 2018). This is the section of the project which is based on the case of an
organisation Enron company where Sabane-Oxley Act 2002 is going to be considered so that
they can effectively resolve the scandal faced by them.
Discuss the case in context to ethical corporate governance along with Sabance-Oxley Act 2002
Enron corporation case scenario: Enron Corporation was an American energy, services
and commodities based organisation which was located in Houston, Texas. The organisation was
founded in the year 1985 within the location of Omaha, US (Losner, 2017). In the end of year
2001, it has been identified that the financial position of Enron's company getting affected which
was reported as an institutionalised systemic where main frauds has been identified which was
conducted in the field of accounting.
Ethical corporate governance: This is the process which will aid in ensuring that a
business entity need to work in a systematic manner which as a result assist in balancing both
economical as well as social factors. In addition to this, it has been said that ethical corporate
governance share that whenever a business entity adopt existing resources it will does not affect
the general public (Epstein, 2018). Ethical Corporate Governance define as the procedure as
well as policies which is placed in the business entity so that they can effectively deal with
problems.
Sabane-Oxley Act of 2002: As per the given scenario, it has been analysed that investor
decides to invest their money in the commercial activities in order to gain effective results. In

this duration, there are ample number of fraudulent data and information came in front of
individuals which develops huge issues. In order to control such negative issues, higher
authorities commenced Sabane-Oxley Act, 2000. As per this act it is very essential that they
must conduct proper audit so that they can examine all the issues in a fair manner (Hall and et.
al., 2018). The Sarbanes-Oxley Act of 2002 was came in respect to solve all the financial
scandals which was arise in the year 2000 where large number of companies involved which
arise in accounting scandals such as Enron Corporation, WorldCom, Tyco International plc and
many more.
From last few years, it has been analysed that there are different sort of issues arise which
affect their stakeholders. The main aim behind commencing Sabane-Oxley Act, 2002 by the
higher authorities of Enron Corporation is that there are major scandals within Corporate Sector
usually associated with fraudulent accounting statements. In this context, it is said that the
financial report along with accounting statements which was presented by the business
organisation are not appropriate which creates negative influence on the overall stakeholder
(Heywood, 2020). This is the reason because of which investors of Enron Corporation suffer a
loss of $74 billion. After this scandal arise at the business entity this is the organisation which
becomes bankrupt due to fraud in this accounting system. The nature of this fraud is so impactful
which is resultant in loss of huge number of jobs within the company and does not receive any
kind of amount in terms of salary. Along with this, the defaulter in this case was punished by
court for 24 years.
Discussion of the case in context of corporate governance and ethics
It is important to realise that corporate governance & ethics have their own wide
significance for an organisation and in these case management of company was trying to increase
profit. Being unethical will increases the company 's return through inappropriate information
presented by enterprise as well as raising funds from investors (BANERJEE, and KAYA, 2017).
The false information provided by the company will help to attract attention of many investors
towards them. Corporate governance always advice that organisation will be able to shows
correct content about company to investors (Rupp, 2020). It is the dusty of higher level
authorities in a unit to review the decision taken through the various division of the company.
But with respect the case scenario management does not take any responsibilities as it increases
the encumbrance for them as well as debt.

As per ethical values, Enron corporation requires that they must consider their employee as
well as other sketch holders before engaging in any scam. Additionally, this scandal was
widespread in nature that the business firm was not able to conduct business activities in future,
as it would provide to an entity that was not ethical in copulation to the performance of business
activities. Therefore, terms and condition that created many problem for some stakeholders were
violated. However, corporate governance will discuss whether a business firm is only able to
make decision that are beneficial to public and investors who plays a key role in the organisation.
The primary reason backside to all these problems is the high level risk to the corporation's
ability.
Discussion of the case in context of Sabane-Oxley Act, 2002.
This law was presented after the Enron Corporation went through a scam. The responsible Act
states that business activities conducted through the Enron Corporation were not in favour of
legislation and policies. As per the law it is necessary that the organisation set proper accounting
statements but the concerned company was not able to do so. Additionally, it is important that
appropriate audits should be conducted, but at the same time it was established that the Enron
Corporation was not operating in accordance with the law and that the audit result in a major
scandal by the company's management was lacking (Wilbanks, 2016). Furthermore, the primary
reason with respect to making accounting statement is to ensure that stakeholders can determine
the status of the entity, that they will be able to decide whether the company is suitable for
investments.
Hence this is essential for creating a correct accounting standard for a business firm as
future inaccurate statements will result in a negative impact on the working of business firm.
Role and responsibilities of every accountant inside the organisation has defined in beginning
(Gu, and Zhang, 2017). Even the duty of each auditor of organisation has been specified, but at
the same time, the auditors of organisation have not performed their duties, because they do not
try to show true image of the corporation. On condition that similar type of problem will happen
against then auditors of the organisation will must face ample number of problem as they also
held liable for the default. Additionally, scam was vast in nature that business enterprise was not
able to perform business activities in coming once it will giving that entity was not ethical in
respect of doing business activities (Kecskés, 2016). Hence terms and condition that developed
several problem for number of stakeholders was violated. Whereas, corporate governance will

discuss whether a business firm is only able to make decision that are beneficial to the public and
investors who play a significant role in the company. The primary reason behind all these
problems is high level of risk to the company's abilities.

Conclusion
From above discussion we conclude that for dealing with commercial activities, business
law is necessary. Even if Sabane-Oxley Act 2002 is fit law in nature because it ensures that all
accounts as well as business transaction are shown as required by law and it is also necessary to
conduct audits . Additionally it is necessary for a business firm to make accounting statements by
using correct content in an effectual manner so that stack holders can determine the status of
entity. Because the outcome of false statement will negatively affect the brand vale in the market
and due to this legal action will be taken by the government authorities in this regards.

REFERENCES
Books & Journals
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