Question

1. What is the definition of business ethics?
2. What is meant by the term social responsibility?
3. Identify two purposes that a code of ethics might serve in a business.

Chapter 10

4. How is a contract generally defined?
5. What are the different classifications of contracts? (List and explain).
6. What are necessary elements of a legal contract? (List and explain).

Chapter 11

7. How is a contract properly discharged?
8. Explain the term breach of contract.
9. What are two possible remedies for a breach of contract?

Answer 1

Business ethics is the examination and study of ethical principles and moral/ethical problems that arises at workplace. It governs the policies and practices that are developed within a business to conduct themselves internally and with external entities.

Social responsibility is a model of operation that recommends that organization need to realize that there are larger responsibilities other than only money. These responsibilities of the organization is towards the stakeholders, environments and the society at whole.

Code of ethics are a set of business rules and documentations that are used by organization and the employees. The purpose the serve are

• Provide a guideline for employees to conduct themselves ethically
• Assist in decision making process for employees in case of dilemmas

Contract can be defined as a legally binding agreement between two or more parties who are competent. The agreement needs to be voluntary and deliberate in nature for it to be a valid contract.

Classification of contracts can be done according the following

• Classification by formation: It could be express, implied or quasi contract. These are different types of contract formation.
• Classification by performance: Unilateral and bilateral contracts. These types of contract dictates who are responsible for the performance and under what condition.
• Classification by execution types: Executed and executory contracts. In other words these are completed (performed) or partial (performance pending) contracts.

The necessary elements for a contract are the following.

• Offer: for a contract to begin formation there has to be an offer from one of the parties
• Acceptance: the offer has to be accepted by the other party explicitly
• Consideration: there has to be an exchange of money, effort, services or goods between the two parties
• Legal intentions: the parties need to have an intention to be legally bound