Business Contract between Terrence and Samantha - Assignment Example

Business Law Name Date Question 1 Issue The issue is whether the board of directors acted in an ethical manner by keeping the information about the side effects of the new rheumatism drug confidential. This is after the research that was commissioned by the company indicated that the drug has little side effect. The decision of the board was aimed at ensuring that the company is able to get profit from the drug and keeps the shareholders happy. Rule The board of directors chose not to reveal to the public the side effects of the drug as it would have ended up affecting its sales and profitability. The drug manufacturing companies are required to provide accurate information with regards to their products1. This ethical principle is for the purposes of ensuring that human safety is enhanced. The ethical principle also requires the pharmaceutical companies to observe good manufacturing practice. Quality assurance is an important aspect in the manufacture of drugs. The ethical principles require that the drug should be of high quality in order to meet its intended purpose. The drug manufacturers have an obligation to the community and the members of public. The ethical principles therefore require the companies to uphold the reputation and public trust of the profession. This is considering that most of the people use the pharmaceutical products without questioning whether or not it has other effects on their health. Commitment to the development of the profession is also required of the pharmaceutical companies manufacturing drugs. Application The decision of the board of directors has broken the principle of public trust. This is due to their failure to disclose the information about the side effects of the drugs. The principle of revealing accurate information about a drug to the members of the public has also been broken. This is considering that the safety of the users of the drug may be compromised by the side effects. The company paid scientists to carry out further investigations on the drug. This is an indication that directors fulfilled their ethical obligations with regards to quality assurance. However, the directors failed to use the ethical principal with regards to quality for the purposes of providing the consumers with accurate information. In the case of Rumenos v The State of Western Australia, the defendant was handed a jail sentence for manufacturing a drug that has the potential of causing harm to human health2. The company has failed in its obligations to promote professional development. Conclusion In conclusion, the directors of the company have breached the ethical principles through their decision not to inform the customers about the side effects of the drug. The ethical principles of trust, informing the customer, enhancing the profession and quality have been breached by the directors. The directors have chosen profitability over ethics which has negative impacts on the consumers. It is an indication that the company does not value the lives of the people but it is only concerned with profit making. Question 2 Issue The issue is whether Quentin’s father was justified to break his promise to pay the university fees for the year. This is after Quentin changed his mind to take a year off and travel overseas. He had however fulfilled the conditions that had been placed by his father which required him to work at the restaurant every Sunday for the whole year. He had to forgo the Tennis scholarship that he had been offered as a talented student in order to work at his father’s restaurant. Rules A promise is considered a contract that has to be fulfilled by the party. A promise may either be formal or informal3. However, an informal contract is still binding. It is also the duty of a parent to take care of their children who are still under them and provide the necessary support. The principles of justice require everyone to act in a just manner towards others. People should be treated justly regardless of the situation. The principle of truth requires that people should act in an honest manner when dealing with others. It is important for people to provide honest information and to be true to their promises. Faithfulness is a principle that requires the individuals to be committed to one another as well as their own promises. Two wrongs don’t make a right is one of the important principles that governs the human relations. This principle considers any wrong action as wrong and it cannot be justified through any means. This is especially when two people or two groups are trying to justify a certain action. Principle of fairness requires that decisions made should be satisfactory to everyone. The equal consideration of interest is a principle that has to be considered when making decisions. This is for the purposes of promoting justice and fairness. Application The promise that was made by Quentin’s father is considered a contract and is therefore abiding. His refusal to abide by the promise is considered is a breach of the informal contract. In the case of Walton Stores (Interstate) Ltd v Maher, it was held that a promisor makes a promise and encourages the promisee to rely on the promise4. As a result of this, the promisor cannot ignore the promise made. Quentin’s father has contravened the principles of rights as he is responsible for the welfare of his son. If Quentin was 17 his father could have the authority and right to stop him from going overseas. The principles of fairness have also been breached by Quentin’s father after negating on his promise. This is considering that Quentin had to give up the tennis scholarship opportunity in order to work at the restaurant. The principle of faithfulness was upheld by Quentin as he worked the whole year as promised. His father has however breached the principle of promise as he has refused to party for the university fees. In terms of conflict of interest, Quentin has chosen traveling overseas and suspending his studies. As an adult, it can be assumed that he had a proper reason for doing so. The principles of justice has been breached by Quentin’s father as it is unjust to deny Quentin his rights after working the whole year and forgoing his tennis scholarship. Quentin’s father has also failed to resolve the issues through equal consideration of opportunities. He is therefore in breach of the two wrongs don’t make a right principle. Conclusion Quentin’s father is in breach of most of the principles including the rights as well as the informal contract. As a result of the breach, he could be compelled to pay for the university fees as promised. The actions of Quentin’s father cannot be justified as Quentin fulfilled his part. The actions of Quentin’s father could have been justified if Quentin was 17 years as his decision to travel overseas on his own as a minor could have been wrong. Question 3 Issue The issue is whether there was a breach of contract by Samantha after she assured Terrance that her Holden Mona car did not have rusted suspension. This is after Terrance inquired about the problem as the rusted suspension was not visible to the eye. Terrance had raised this issue after his friend had trouble with a Holden Monaro. Rule A contract comes into effect when both parties agree to the terms and condition5. However, one party should not have an undue advantage over the other in the contract. This requires the parties involved to ensure that adequate information is provided and coercion tactics are not used. A party may be in breach of contract if coercion tactics is used. A contract is considered valid whether it was made verbally or in writing. Any verbal information that is provided whether in writing or verbally during the contract is considered valid. A silent contract is also considered valid if some of the concerns raised are not part of the written contract. A contract is considered invalid if one of the parties acted in a manner that may lead to undue advantage top the other party. A silent contract can be considered void in case one of the parties used undue influence over the other party. However it is also important to note that the parties involved should ensure that all the information is availed to them. Application A valid contract was made between Terrence and Samantha with regards to the purchase of the car. Samantha assured Terrance that the Holden Monaro did not have rusted suspension. This led to the purchase as it was a concern for Terrence. The purchase contract was however silent with regards to the suspension. Although the contract was silent about the suspension, Samantha was in breach of the contract. This is because she provided false information to Terrance after he raised the question. In the case of Shepperd v The Council of Municipality of Ryde, the high court held that the assurances that were made by the council contributed to the signing of the contract between the two parties6. This is despite the contract being silent on the issues. In the case of JJ Savage v Blakney, a promise was made that the boat being manufactured for the client would attain a speed of 15 mph7. This was however not mentioned in the contract although it contributed to the signing of the contract. The lower court noted that had the promise not been made, the contract would not have been signed. This is the same situation of Terrence as he would not have signed the contracts had he been told that the suspension had rusted. Conclusion Samantha is in breach of the contract as a result of the false information that she provided to Terrence which influenced his purchase decision. As a result of the breach of contract, the contract can be decaled null and void and Terrence given back his money. References Rumenos v The State of Western Australia [2011] WASCA 59 Walton stores (Interstate) Ltd v Maher [1988] 76 ALR 513 Shepperd v The Council of the Municipality of Ryde [1952] 85 CLR 1 JJ Savage v Blakney [1970] 119 CLR 435 McKendric, E, 2014, Contract Law: Text, cases and materials, Oxford University Press. World Medical Association, 2013, World Medical Association Declaration of Helsinki: ethical principles for medical research involving the human subjects, Jama 310(20), 2191. Read More