Question

Important purposes of the law, in a business context, include providing reliability and promoting good-faith among merchants.

Please discuss why these purposes are important to business.

Answer 1

One of the most import parts of business law is having a strong contract. The business law contract formalizes the agreement between two parties to prevent misunderstanding about key terms in the agreement.

It’s key for both parties to have a valid and enforceable contract in case the contract needs to be enforced in court. Contracts can be oral or in writing. An oral contract is any agreement that’s not written but certain types of agreements are required to be written such as agreement to buy or sell real estate or land.

A written contract plays a vital role in any business transaction. Apart from making the agreement between concerned parties legally binding, contracts can also serve as future references, part of the business’ policies, as well serve as proof in the event of misunderstandings, complaints or disputes needing litigation proceedings.

One of the ultimate benefits of having written contracts in business transactions is the opportunity to agree to confidentiality and non-disclosure provisions protecting sensitive information. As part of the agreement, the concerned parties are legally bound to hold in secrecy the transactions involved and the information shared among them, and the party that violates this confidentiality agreement would be held liable under the agreement.

A written contract is used as an official record establishing what the parties involved have agreed on. For instance, it provides guidance on the level of authority given to owners or managers in the business, completion date of any work contracted to a service provider, payment of work completed, or simply stating the terms on who or when to terminate a contract.