The purpose of this paper is to discuss business law principles. The focus is on several distinct areas of law that are pertinent to conducting business, such as contracts, agency relationships, partnerships, corporations, property, sales, negotiable instruments, and secured transactions. This paper does not claim to address the wide-ranging body of knowledge that encompasses business law but, instead, defines the terms, summarizes the rules and, where appropriate, notes the remedies.
Contracts are legally binding agreements that are formed when an offer is made, followed by an acceptance, and supported by consideration.1 The offer is an expressed willingness to make a binding agreement on certain terms. The acceptance is an unqualified and unconditional assent to the offer. The consideration means that each of the contracting parties must exchange something of value with the other.2 In addition, a contractual agreement must be between competent parties and made for a lawful objective.
Contracts may be valid or voidable, express or implied, oral or written.3 Valid contracts are binding and enforceable, while voidable contracts may be rejected at the option of one of the parties. An express contract is one in which all the details are spelled out, whether oral or written. The details of an express contract include identification of the item to be purchased or sold, the date of purchase or sell, and the price and terms of the offer. Implied contracts are usually oral. For example, if an order is made without an express statement that the recipient will pay for the order, then the promise to pay is implied in the order and is enforceable when the order is delivered.4
Two types of contracts must be in writing to be legally enforceable, as sanctioned by the Statute of Frauds. First, any contract which absolutely cannot be completed in less than one year must be in writing. Second, any contract that involves the sale of...