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Business Law Obligation and Contract
Business Law Obligation and Contract
Business law obligation and contract refers to what is legally required of each of the parties
involved in a contractual agreement. The law requires individuals who enter into legal
agreements to uphold their end of the contract. In business contracts and other types of
contracts, one party has the right to pursue legal action against the other if he or she
breaches the agreement.
Offer
Acceptance
Consideration
Capacity.
One party must first offer something to another. Then, the other party has to accept that
offer. The consideration of a contract refers to what is exchanged, and this is where
obligation comes into play. Contract capacity is the ability of either side of the contract to
understand the seriousness of the agreement and to carry out his or her obligations.
The consideration, or exchange of value, in a contract is basically the reason for the
agreement. For instance, take the sale of a car. The car and the money paid for the car are
the consideration of the contract. Each party has an obligation to follow through with the
sale covered in the contract. The seller is obligated to transfer the title of the car to the
buyer, and the buyer is obligated to give the seller a certain amount of money for it.
Contracts should not only cover the basics of what is being exchanged but also the where
and the how. The terms and conditions of a contract are an important part of the legal
agreement that shouldn't be overlooked. Contract terms control how the obligations will be
fulfilled, such as:
When a party doesn't follow through on his or her obligations in the contract, this is called
breach of contract. If a breach of contract takes place, the injured party (or the party that
didn't breach) has a right to pursue suit and may have a right to collect damages.
Payment
Delivery
Quality.