BUS 311 Business Law I
The law of contracts has been a part of our culture for a long time. Contracts are an agreement, either written or spoken, with a company or person to do something that is agreed upon with binding terms. Contracts are the glue that keeps the world of business together. They bind employees and companies, consumers and producers, and suppliers and wholesalers. A contract can vary from country to region or even jurisdiction, but a contract is always a legally enforceable agreement that meets certain legal requirements. There are many essential features that go into the creation of a contract that make it enforceable and the variety of contracts is endless. This analysis on all accounts will cover the creation and writing of contracts, the different types that exist, their enforceability, legal issues that might arise, and the importance of their function.
The origin and creation of contract law can be traced all the way back to the Roman Empire. Although the Roman government didn’t really start to enforce contracts toward the decline of their society, their contract law books provide proof of a long social and legal evolution. It recognized a variety of agreements and contracts, some were considered enforceable while others weren’t. This first phase of contract law was lost once the empire broke apart, and didn’t resurface until the 12th century. The rebirth of contract law came about from the trade of merchants and suppliers which had nothing to do with courts of law. The merchant courts gave speedy justice and were overseen by men who were themselves merchants who understood all the customs and problems that could arise. Around the 13th century contract law in England started to develop through the courts and dealt with debt and covenant. When money was owed under an expressed or implied agreement for a benefit or item given, then the money was recoverable, as was breach of promise that had been signed with a seal to pay a set price. Informal agreements weren’t addressed by the courts until the 15th century and negligence by the 16th century. By the 1800’s agreements were considered obligations that were enforceable by law unless it dealt with a minor or society was put at risk somehow. Contracts as we know them today didn’t become so complicated until the last one hundred and fifty years or so. “Our current conception of contracts is not the outgrowth of gradual, piecemeal refinements of a centuries-old idea. Rather, contracts as we know them were shaped by a revolution in private law undertaken by classical legal scholars toward the end of the 19th century”. (Kreitner, 2006)
Today, the law of contracts makes sure that both parties have an understanding of the agreement and that the transaction is entered into freely. The modern day definition confirms this concern; “A contract is a legally enforceable agreement that is created when two or more competent parties agree to perform, or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements”. (Liuzzo, 2013) Even though all contracts are a form of agreement, this does not in any way imply that every agreement is a form of contract. The reason being is that there are many social and personal applications that happen every day between people that are not enforceable by law. One example would be the agreement between two children wanting to trade toys. Just the fact that they are minors would not allow for a contract agreement. With an oral agreement between two adults, there must be some sort of proof of the arrangement. This is why it is usually best to have things in writing or at the very least some sort of witness. Any legal situation will need proof to enforce the agreement. There are many legitimate reasons for the creation of a contract, from the sale or purchase of goods and services, to real property or personal...