Contract and Tort Laws Relationship to Business

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It is impossible to overestimate the significance of contracts in the field of business. Every business, large and small, must enter into contracts with its employees, its suppliers, and its customers to perform its business operations. The purpose of this paper is to discuss the basic principles of law and their relationship to the law of business organizations. The focus is on areas of law that is pertinent to conducting business, such as contract law and tort law. Knowing the legal requirements for binding contracts for a business organization is essential. The majority of business law in the daily operations of a business is contract law. A business organizations success is based on their reputation to fulfill their promises. Business transactions are based on contracts and expectations the agreed-upon promises create. Knowing the legal requirements for making binding contracts is important. Contracts provide the means for individuals and businesses to sell or transfer property, services, and other rights. Without enforceable contracts, the business world would collapse. A contract is defined as an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law. (Black's Law Dictionary, 2005) The agreement will create rights and obligations that contracts, in many instances, do not have to be in writing to be legally binding. For example, one neighbor wishes to buy a lawn mower from another neighbor. They discuss and agree upon the purchase price but nothing is put into writing. This is considered a spoken promise to pay a specified amount in exchange for the lawn mower. Without this agreement in writing it would be difficult to determine what happened. A rule known as Statue of Frauds requires that some contracts must be written and signed by the party charged to be valid. The normal method of
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