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Corporate Law: Contracts and Sales Essay

Contracts and Sales: Introduction and Formation

A contract is an agreement between two or more individuals, with the intention of making a legally binding relationship. The contract has to be binding for it to be enforceable in a court of law, for there are some contracts that are not enforceable by law. For example, a gentle man’s promise, domestic arrangement and social invitations are unenforceable because they lack the basis for action (Bryson, 2005).

In the formation of a contract, there are two sides of the parties involved; the one who is the seller of the goods or services and the buyer. The seller is called the offeror and the buyer the offeree. A contract must have the following elements;

There has to be an offer from the offeror and acceptance from the offeree.

There has to be an intention to create legal relations.

There has to be a consideration, or the contract must be under the deed.

The parties must have contractual capacity.

There has to be a genuine consent from the parties.

Contracts and Sales: Performance and Remedies

Contracts and sells go hand in hand, especially the sales in credit. However, it is impossible for the business to be carried out without credit. As such, the details on credit have to be considered and involve contractual obligations as well as liability. In the event that the firm has entered into an agreement to sale of goods and a breach has occurred, the case will be treated as a contract. Considering the case study of Robins & Robins Company, the offence committed by the firm is very serious. However, the mistake committed was as a result of the innocent misrepresentation of the firm by Casings, Inc. This is a case of false representation of material facts, and the firm should consider legal redress or otherwise from the supplier, in the event that the firm goes into a legal battle with Casings, Inc. The firm may sue for damages from Casing Inc. Here, the later company will be obliged in a court of law, to pay for damages estimated by a government auditor.

Robins & Robins Company may also put up action in court for specific performance from Casings, Inc. This entails a special performance from the offending party, to the plaintiff by court order, to be used as part payment to damages. The firm may further seek action for injunction, against the services of the accused. This should be based on the grounds of the misrepresentation suffered by the plaintiff (Carpenter, 2006).

Business Property

Business property has to be registered in the name of the company as the company is a legal person. The property sell and purchase must involve more than one signatory, to safeguard on the company assets. The law on property considers the property in terms of real and personal property. During action in court where the case involves significant consideration, restriction in specie may be enforced to cover for damages on the offended party (Bryson, 2005).

In the event that land is the subject in question, the management has to make a good choice while adhering to the laws on leases while leasing. If the firm is the leaser, it has to observe the easement and profits a prendre while using the property of a third party to avoid legal battles due to offences to the party. In addition, the firm has to ensure that appropriate rent charges are charged to the firm. The rights of entry and land taxes should also be observed where the firm is the leader. Lastly, the firm has to consider future interests in the land in question during planning. In favourable conditions, the firm may consider mortgage during land acquisition (Carpenter, 2006).

Business and the Constitution

A business should be able to adhere to the various laws that are put in place by the local authorities. Failure to this might lead to court battles and destruction of company goodwill. The constitution contains the specific actions that the firm has to make it observe in its day to day business.

Administrative Law

Administrative law may either be procedural or statutory with instructions for specific circumstances. The firm must ensure that it has followed to the later all the administrative policies and procedures in question from the government. In addition, the firm has to ensure that appropriate rent charges are charged to the firm. In favourable conditions, the firm may consider mortgage during land acquisition (Carpenter, 2006).

International Law

This is the law that governs the international community as well as international business relations. In this case, the film follows the laws while carrying out business with an international partner. These laws must also be consistent with the laws of the United Nations.

Business Torts

On the other hand, the firm may have to consider the involvement of advice from a lawyer concerning the law of torts. In this case, the firm is obliged to pay for any damages from the offences committed by any of its employees on their line of duty. Furthermore, one of the employees bribed administrative personnel. In most countries, this is considered a serious crime by the government (Carpenter, 2006).

In this specific case, the firm finds itself in a dilemma after committing serious self-made crimes. According to Blanchard and Peale, there is no right way of doing something that is wrong. They suggested that most of the people know right from wrong, but they put themselves in tough situations because they made the wrong choices. In this case, the firm knew very well the consequences of its action. Unfortunately, the firm chose to ignore the right procedures for dealing with the situation. In the end, the firm is faced with a scandal that it can hardly contain. Morally, the firm is supposed to be an example to the public as well as other firms; however, this was not the case.

Business Ethics and Social Responsibility

On the other hand, the management personnel were supposed to avoid the grey area in a dilemma between right and wrong. Instead, the management took advantage of its position in the industry, ignoring all the laws and rules concerning the situation. The management has to answer the several questions used by Blanchard and Peale like, is it legal? Is it balanced? Does the practice consider the feelings of the parties involved? How will the activity make me feel about myself? The manager should, thus make a personal analysis of his actions. This will help him to make a general analysis on his actions (Carpenter, 2006).

The firm has completely failed on its corporate social responsibility. In the prevention of the customer wellbeing, providing the customer with explosive contaminated medicine. The corporate social responsibility is essential for any firm to build its goodwill. The firm that fails to meet its responsibility to the general public faces a tough decline in its sales due to the loss of goodwill by the firm. To avoid this, most firms meet this responsibility to the general society by building schools, sponsoring bright students from poor backgrounds.

Corporate social responsibility is also a way for the firm to give back to the society. The firm gives back as a form of thanks from the support accorded to it by the society as customers. A firm that is able to meet its social responsibility can easily achieve growth and expansion targets. This is because; the firm is able to build a strong goodwill on its image and in return a very high growth in sales. The customer loyalty is also enhanced, and this gives the firm a stable stream of income thus stabilizing the company even more (Carpenter, 2006).

Management of Employee Conduct: Agency

In this case, the CEO of the firm should suspend all the managers that were involved in the scandal. In order for the firm to get the exact course of the problem, the firm should seek the help of external auditors. There should be a team of qualified personnel to enquire on the whole saga. An investigation should be carried out to involving all the deals that the firm has ever entered in to with Casing Inc. From these details, the firm should be able to establish on the credibility and course of action against the managers involved. In this reports from the investigation the firm will also be able to establish its position after all is said and done.

In the case of the Canada resident against the company, the firm may be found guilty and be liable for the payment of damages. In this case, the firm has more evidence than it can deny in the eyes of the public. Furthermore, the law protects the wellbeing of the people against such injustice. The pharmaceutical industry has strict laws that must be observed, the nature of the profession involves human life which it is entrusted to. Practices that go against this policy are taken seriously by the pharmaceutical board of the given country (Carpenter, 2006).

The only way that the firm can be able to solve the whole scandal, without doing more damage to its image, is by talking to the parties involved to solve the case out of court. In the event that this is not possible, the firm may have to put all the blame on the supplier company. It will have to accuse supplier of misrepresentation. The firm will then sue for damages for goodwill (Carpenter, 2006).

In the case study of Pastor Forester, the accused committed all the offences against the teachers. Unfortunately the school as well as the board of directors will be liable to his actions. In this case, according to the law of agency the master is liable to the actions of the agent acting on their behalf.


Bryson, M. K. (2005).Company Law. Chicago: Wontan Publishers.

Carpenter, M. (2006). The law of contracts. New York: William & Sons Publishers.

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IvyPanda. 2021. "Corporate Law: Contracts and Sales." February 7, 2021. https://ivypanda.com/essays/corporate-law-contracts-and-sales/.


IvyPanda. (2021) 'Corporate Law: Contracts and Sales'. 7 February.

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