Essay Example on the Legal Environment of Business

The legal environment of the business refers to the code of conduct that defines the legal boundaries for business activity" (Research Starters). The business nature is the one that will determine the legal jurisdiction it will have. This legal jurisdiction can be continuously influenced by the government, the needs of the business, the consumers, the community, and, the demands that the business has.

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The paper will entail a general discussion of the provided legal business scenario. The paper will also entail answering the questions asked, and giving explanations where necessary.

Question One

Negotiation can be described as the act of having a discussion with the plan of coming to an agreement between the two or more parties involved. With the exclusive negotiation agreement ordering that unless it is in writing, no distribution contract exists. Chou and the Big Time Toymaker (BTT) did have a contract even though the e-mails that they used did not have the word contract in it. A legal contract can be made up of the basic elements that include consideration, mutual assent, legality and, capacity. This is because they had come to an agreement on all of the terms. Therefore, they had mutual assent.

Question Two

The fact that may weigh in against Chou regarding the parties' objective intent to contract is that they communicated through e-mail, and there were no signatures on any document because they had not met physically.

Question Three

Communication via e-mail impacts the questions answered above. This is because legal contracts require signatures of the respective parties involved, and in this case, none was evident.

Question Four

The statute of frauds is the requirement that certain contracts have to be put into writing before they become valid. In the above case, Chou and the BTT did not have any contract in writing. Because their contract involved the sale of Chou's new strategy game Strat', the contract should have been in writing. This is the reason that why BTT took advantage of Chou.

Question Five

The doctrine of mistake refers to the legal term that is used to annul a contract because the parties in the involved contract have misunderstood each other. BTT could have avoided this contract by claiming that they had a misunderstanding in the contract. The other defense that would allow the contract to be avoided is by using the statute of frauds.

Question Six

Consideration can be defined as something valuable that is given by the parties involved in a contract so as to go into an agreement and be able to trade mutual performances. This can be in the form of unilateral and bilateral contracts. The above agreement had legal consideration because there was payment of the 25000$ from BTT to Chou.

Remedies for breach of contract

If BTT had breached a contract with Chou, there are many remedies that would have been applied. One of the remedies would have been the award of damages. Award of damages is the most common remedy applied and includes compensatory damages and punitive damages. Compensatory damages are paid to cover the loss incurred by the non-breaching party. Punitive damages are awarded to the wrongdoer as an act of punishment to warn others not to go down the same road. BTT would have been awarded both the compensatory and punitive damages as punitive damages follow suit after compensatory damages. This is because they willfully breached the contract.

Another remedy that could have been applied is repudiation. Repudiation can be termed as the condition of a breach that allows the innocent party involved to end the contract or demand the contract's performance. Chou would have used repudiation against BTT.

Conclusion

The legal environment of a business is important as it determines the future of the business.

References

"Legal Environment of Business" Research Starters eNotes.com, Inc. eNotes.com 12 November 2015 <http://www.enotes.com/research-starters/legal-environment-business#research-starter-research-starter>

The Legal Environment of Business, Chapter 6 Theory of Practice.