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In this assignment first we are going to discuss about the how business-people come to
have duties under the law of contract and the main legal requirements for the formation
of a contract with practical examples and applied theory to support the arguments and
then we are going to discuss about how business-people come to have duties for
negligence under the law of tort and the main legal requirements for liability in
negligence with practical examples and applied theory to support the arguments and then
we are going to discuss briefly about the E-commerce and how business-people have
duties under the law of e-commerce with exactly one legal requirement of the Ecommerce Regulations 2002 and then finally we will discuss briefly about the business
ethics and then thoroughly about if the business-people operate mainly out of selfinterest or not and then we are going to discuss briefly why we are disagree with
statement of "The Wealth of Nations" (1776) by Adam Smith.

Contract and how do business-people come to have duties under the law of
When two or more parties agreed upon specific terms and conditions in written and
willingly want to perform their duties and responsibilities is called agreement and when
the agreement is enforceable under the law is called contract. Every contract should need
to have the offer and acceptance from two or more parties and with something in return
(consideration) and with the purpose to make legal relations.

The main legal requirements for the formation of a contract are as follows:


The ability or capacity to understand and know the contract is called as capacity. In a
valid contract all the parties must need to have capacity like companies and adults
except minors because they dont have the capacity to know and understand the
contract. Those who are under the age of 18 are called as minors in most of the

Mutual Agreement

When both the parties understand the contract and have a meeting of mind then there is
an agreement and they also need to make sure that there are no mistakes or
misunderstanding is present in the agreement and contract and when the offeror (who
made the offer to the other party) is clear, specific and using a proper channel of
communication to the offeree (the other party who accept the offer). Some invitation are
made in excitements are not valid like social invitations.


Consideration means something in return or exchange of actual value like tangible

products like cash etc and intangible like services. For the formation of contract
consideration must exist in a contract.

A Legal Object and Purpose:

The object and purpose of the contract must be legal and if it is not legal like smuggling
of drugs or sale of stolen vehicle is a void.

Breach of Contract:

When one party in the contract fails to perform the duties which are mentioned in
the contract then the other injured party has the option to void the contract and claim for
the damages.

Contract formalities:

To form a contract both Statute of Frauds and the parol evidence rule must need to
followed and it means that both the parties should sign the contract and the contract must
be in written.
Tort Law:
Persons who have suffered damages from the wrongful act or wrong doing of others have
the right and obligations to claim for compensation under the tort law.
Example: Donoghue Vs Stevenson (1932):
May Donoghue went to the caf with her friend, her friend bought a drink of ginger beer
for her after while May Donoghue after consuming of the drink found the decomposing
remains of a dead snail and after that she became ill and she went into the court to sue the
manufacturer for the act of tort negligence and the court announced the decision in the
favour of May Donoghue.
It is not easy to absolutely determine the most cases of negligence because there are lot of
factors involved in it. The main calculation used to determine whether the act was
negligent is to believe that what a sensible prudent individual would do, mentioned the
knowledge and the age of the tort feasor, and other important factors.
How do business-people come to have duties for negligence under the law of tort
and requirements for negligence?

There are four requirements which the presumed negligence must satisfy before a court to
award damages is as follows:
1. For reasonable care there must be legal duty to perform.
2. There should have been a failure to complete that duty.
3. The claimant must have suffered a loss or injury.
4. The proximate cause of the injury or loss must have been through the act of
To award the damages and claims there must be a presence of all these above four
It is the art and science of selling the goods and services online or when the companies
carry out their financial transaction online to sell their goods and services online to
achieve profits. And it can be of business to consumer, business to business etc.
Do business-people have duties under the law of e-commerce and the legal
requirement of the E-commerce Regulations 2002 is mentioned below:
Legal requirements for Ecommerce:
There are three main regulations and directives that the ecommerce business has to
comply with are the Data protection Act 1998, Distance Selling Act 2000 and Ecommerce
regulations 2002.
Information (Regulation 6)
A service provider should make the following information quickly, easily and
permanently accessible:

Service provider must mention the name of its company and the geographical address of
their home branch or parent company. Email address of the service provider must be
available on the website for direct communication and the details of some relevant or
important trade registration must be available on the website and the details of some
relevant and important authorisation scheme and where the business is part of a
profession whose qualifications are recognized across Europe, details of the relevant
professional body, title & member state, and reference to any relevant professional rules
and service provide the information regarding the VAT number and where the prices are
listed and whether the tax and delivery cost is included in the cost or not.
Business ethics and do business-people operate mainly out of self-interest or
It is not from the benevolence of the butcher, the brewer or the baker, expect our dinner,
but from their regard to their own self-interest. We address our selves not to their
humanity but to their self-love, and never talk to them of our necessities but of their
There are some business-people which do not operate mainly out of self interest like
Anglo American Multinational Company has contributed a lot towards society and
environment like they recently won three awards in a row on 18th December2009 at
Australian Mining Prospects Awards and also there are some other companies are not just
working for their self interest but by also contributing towards social, environmental
issues like Sainsbury has also doing well in following the business ethics and they also
have achieved success like winning award at the annual Drinks Business Awards 2011
because of their efforts to reduce the effect of their carbon footprint and also for effective,

efficient and improved supply chain management. But yes there are some companies
which only thinks for their self interest or their only aim is to maximise their profits only
or to just to expand their business globally to maximise the return for shareholders or to
increase the shareholder value only like recently IKEA company (which deals in
providing home furniture and home furniture etc) was exposed over the issue of child
labour and environmental issues like when multinational chief executive manager Anders
Dahlvig make public that some the overseas suppliers are using child labour and some of
their overseas suppliers of wood are violating the environment laws by cutting down in
protected areas. And one of the presenter of BBC news channel asked Dahlvig about the
issue of child issues and environmental issues and in reply Dahlvig told that : If you
know how production takes place in the world you cannot guarantee that, for instance,
there is no child labour or that some wood doesn't comes from illegal (logging at
protected) forests.
The main objective or aim of the every business is to increase their profits and increasing
the returns of their shareholders but most of the companies are realizing the importance
of the global issues like global warming and child labour issues by involving stakeholders
in their decision making to make this world a better place to live like Anglo American has
engage their stake holders decision making process and the management is using a SocioEconomic Assessment (SEAT) process to assess the impact of their business activities on
society, environment and company. Satisfying the customers should need to be the main
objective of any company by focusing on the transparency in warranty and guarantee
claims for the customers in case of any damages.

So all the companies must not sacrifice the social cost or environmental cost just to
increase their own profits and to achieve growth and success the core management of the
organization should needs to be ethical based. And the companies must not manipulate
the accounts of the company to show higher or lower profits to attract the shareholders
and investors. The companies should not sell goods and services at cheap price or below
the cost price for just to remove the new entrant into the market.
Companies like Anglo American, Sainsbury are setting examples for other companies to
follow the business ethics and how the companies can maximize the profits while side by
side doing the social responsibility and following the environmental laws and also caring
about their employees. So by seeing this I dont agree that the companies only work for
their interest and just to increase their profits only. And the U.K government is also
making laws in the public interest like The Public Interest Act 1998 (UK) in this the
employees are protected under the law for Whistle Blowing which means making a
statement or disclosure in the interest of the society or public like if any employee or
worker is allowed to disclose in public about any wrong going on his/her company but
only through the right or correct process to disclose it.
E-commerce is on boom these days because people dont have time to go to stores for
shopping and they dont even want to spend their money on transport and they can shop
any time on line because all the online websites stores of various companies are open
24/7 so it is very convenient for the customers to shop any time but the security issue is
always involved in online shopping because the customers have to give their bank details
and personal details so the UK government needs to be make strict laws in case of

security issues which the customer are facing and the government also need to make strict
laws against the bogus online companies which sends fake emails to the customers in
order to collect the personal details and bank details of the customers and law of tort and
contract provide safety for people and create trust in the mind of the customers.
Regarding the business ethics the main aim of all the companies is to increase the profits
and increase the return of the shareholders or maximize the shareholder wealth but all the
organizations must do side by side social responsibility and contribute towards
environment by following business ethics. And also the companies need to train their
employees to follows the business ethics and the top management can also set examples
like in case of Anglo American is playing a great role regarding the environmental issues
and social responsibility by creating jobs where ever they go for business like created
employment opportunities in parts of Africa for local public.