Management and Organizational Studies 2275A/B Chapter 6: Chapter 6 - Business Law 2275

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Cristin Keller

Document Summary

Along with torts, the second area of private law affecting businesspeople and by far the most important is the law of contracts. Five essential elements are necessary for valid contracts. Contract a voluntary exchange of promises, creating obligations that, if defaulted on, can be enforced and remedied by the courts. In contracts, people are creating and defining their own rules and obligations, whereas in torts for instance, rules and obligations are imposed on them. Courts will enforce a valid contract after it has been created and what parties agree to in the first place is generally unrestricted (this approach is referred to as the freedom of contract ) People can enter into any kind of contractual agreement as long as the contract meets common law requirements. Courts may become involved in a small proportion of contractual agreements, when an unresolvable dispute arises.