When creating a contract, a negotiator is not only doing so to reach an agreement between two or more parties, but to create an agreement that is durable; whereby parties of the contract are legally bound and committed to its promises . “A legally binding contract is defined as an exchange of promises or an agreement between parties that the law will enforce, and there is an underlying presumption for commercial agreements that parties intend to be legally bound” . When a contract does not expressly address a contingency that occurs, the morality of breach is assumed here to depend on what the contract would have said had it addressed the contingency. Morality in contracts becomes crucial to parties entering into a contract. This is where the role of ethics comes in. List of illustrations:
1.Shell Oil corporations’ Brent Spar Incident
2.Individual Case: Gerbert vs Gerbert (a clash between brothers after a contract) 3.Gujarat Housing Board vs Vipul Corporation on 21 June, 2004 . 4.Odorizzi v. Bloomfield School District CA Ct of App 54 Ca Rpt 533 . 5.ONGC vs Streamline shipping company PVT. Ltd. on 22 March, 2002 6.International Telemeter v. Teleprompter, 592 F.2d 49 (2d Cir. 1979). 7.State Of Kerala vs United Shippers And Dredgers Ltd. on 15 July, 1982 8.Situation: Kitchen Renovator vs a construction company
9.Situation: Kitchen Renovator vs a construction company
10.Situation: Kitchen Renovator vs a construction company
11.Situation: Kitchen Renovator vs a construction company
The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The most common form of business all around the world is corporation. There are more than 2 partners who either wholly or has limited liability over the business. In such a scenario the need to bind by certain terms arose both within the organization by the stakeholders and outside the organization with the suppliers and wholesalers. This dire need gave rise to “contracts”. The leaders of the organization cooperate with a set of written rules bounded by every other stakeholder. HOW CONTRACT?
It all started as an idea of shaking hands, the idea it expresses has had greater impact on Business ethics. Just a simple handshake denotes the idea of agreement in economic contexts. A contract is an agreement entered voluntarily by two or more parties, each of whom intends to create one or more legal obligations between or among them. The elements of a contract are offer and acceptance by competent persons having legal capacity who exchanges consideration to create mutuality of obligation, and, in some circumstances, do so in writing. A contract is always enforceable by law and has the following essentials. 1.Intentions to create a contract
2.Offer and acceptance
4.Capacity to enter into contract
5.Free consent of the parties
6.Lawful object of consideration
Being Ethical in contracts is behaving in accordance with social conventions, religious beliefs and law where the humans are basically evolved in a moral sense and possess the ability to engage in moral behaviour. The law here is aforesaid liability in contracts where the generic importance is of getting a fair share in corporation profits. That is why it becomes extremely important to maintain ethics in contracts. The lawful object of consideration is considered very important in the contract and ethics related to contract. This is because in case of contract breach ethically or non-ethically reimbursing the value of lawful object of consideration is hereby treated as lawful. It is therefore imperative that contracts are created to be as durable as possible so parties are unable to find legal ‘loopholes’ and use their power, wealth, ignorance or cultural differences in setting contracts aside. Apart from that the ethical behaviour of...