Lecture-4:

Legal Contracts and

Corporate Ethics

Scientific Ethics and

Safety
ENGR / SCI 304
Sherif H. El-Gohary , Phd
Assistant Professor,Biomedical Engineering
shamdy@zewailcity.edu.eg
Definition of a Contract
• A contract is an agreement that is
enforceable by a court of law or equity

• If one party fails to perform as promised,

the other party can use the court system to
enforce the contract and recover damages or
other remedy
Parties to a Contract
• Offeror – The party who makes an offer to enter into a
contract
• Offeree – The party to whom an offer to enter into a
contract is made

Offer
Offeror Offeree

Acceptance
Offeror makes an Offeree has the
offer to the power to accept the
offeree offer and create a
contract
Elements of a Contract

1. Agreement 2. Consideration

3. Contractual
4. Lawful Object
Capacity
Classifications of Contracts:
Formation (1 of 2)
1. Bilateral contract – a promise for a promise

2. Unilateral contract – A promise for an act

3. Express contract – A contract expressed in oral

or written words

4. Implied-in-fact contract – A contract inferred

from the conduct of the parties
Classifications of Contracts:
Formation (2 of 2)
5. Quasi-contract – A contract implied by law to
prevent unjust enrichment

6. Formal contract – A contract that requires a

special form or method of creation

7. Informal contract – A contract that requires no

special form or mode of creation
 Classifications of Contracts:
Enforceability
1. Valid contract – A contract that meets all of
the essential elements to establish a contract
2. Void contract – No contract exists
3. Voidable contract – A party has the option
of voiding or enforcing the contract
4. Unenforceable contract – A contract that
cannot be enforced because of a legal
defense
Classifications of Contracts:
Performance
1. Executed contract – A contract that is
fully performed on both sides

2. Executory contract – A contract that is

not fully performed by one or both
parties
Agreement
• Agreement – the manifestation by two or
more persons of the substance of a contract

• It requires an offer and an acceptance

Offer
• The manifestation of willingness to enter into a
bargain, so as to justify another person in
understanding that his assent to that bargain is
invited and will conclude it [Section 24 of the
Restatement (Second) of Contracts]
Termination of an Offer
1. Revocation of the offer by the offeror
2. Rejection of the offer by the offeree
3. Counteroffer by the offeree
4. Destruction of the subject matter
5. Death or incompetence of the offeror or offeree
6. Supervening illegality
7. Lapse of time
Option Contracts
• An offeree can prevent the offeror from revoking
his or her offer by paying the offeror
compensation to keep the offer open for an
agreed-upon period of time
• This payment is called an option contract
• The offeror agrees not to sell the property to
anyone but the offeree during the option period
Offer and Acceptance - Summary
Communication by Offeror Effective When

Offer Received by offeree

Revocation of offer Received by offeree

Communication by Offeree Effective When

Rejection of offer Received by offeror

Counteroffer Received by offeror

Acceptance of offer Sent by offeree

What is a Contract
• a: a binding agreement between two or
more persons or parties ; especially one
legally enforceable
• b: a business arrangement for the
supply of goods or services at a fixed
price
-Merriam-Webster
Examples
• Credit Card Agreement
• Signed agreement related to a job
• Online agreement when starting a Facebook
or email account
• An agreement to buy something from a
friend
• Buying something from a store
 2. CORPORATE
ETHICS

As times change, so do
social norms for personal
and professional behavior,
but that doesn't mean basic
etiquette doesn't matter.
Performance and quality
are important, too, of
course, but not exclusively.
We sometimes forget that
business is about people.
There is no shortage of
competent and reliable
people in the business
world and manners can
make the difference.
• It is against the law

• It is unethical
EMPLOYMENT LAW
 The Law and Ethics Relationship
Legal

Legal & Legal &

Unethical Ethical

Unethical Ethical

Illegal & Illegal &

Unethical Ethical

Illegal
 Is “legal” the same as “ethical?”

• YES: • NO:
• Law defines duties, • Law does not address
rights, “allowable all ethical dilemmas
conduct.” • Legal duties may not
• Compliance approach meet standard of
to business ethics: ethical conduct
fulfill legally • “Beyond Compliance”
recognized duties, and approach: fulfill
don’t go further. legally recognized
duties, but don’t stop
there.
In case of conflicts, it’s generally held that legal
standards must give way to ethical standards
26
 Policy vs Law
• Laws
• External legal requirements
• Security policies. Internal (organizational) rules
that:
• Describe acceptable and unacceptable
employee behaviors.
• Organizational laws --- including penalties
and sanctions.
• Must be complete, appropriate and fairly
applied in the work place.
27
Policy vs Law
• In order to be enforceable, policies must be
• Disseminated. Distributed to all individuals and
readily available for employee reference.
• Reviewed. Document distributed in a format that
could be read by employeees.
• Comprehended. Employees understand the
requirements --- e.g., quizzes or other methods of
assessment.
• Compliance. Employee agrees to comply with
the policy.
• Uniformly enforced, regardless of employee
status or assignment. 28