A void contract is one that does not meet all of these requirements and thus has no legal effect because the contract was never fully formed. For instance, if the courts determine a person is incompetent, any contract in which he or she enters will be void because the party lacked the legal capacity to form a contract. A voidable contract is a fully formed contract, but because of problems in the way it was formed, courts permit one or more parties to avoid the legal duties that the contract creates.
Finally, an unenforceable contract is one for which there is no remedy for a breach. Contracts may also be executed or executory. An executed contract is one in which all of the parties have fully completed their promised performance. An executory contract is one in which one or both parties have not completed the performance due. Finally, contracts may be formal or informal. A formal contract is legally binding due to its particular nature. For instance, a negotiable instrument such as a check is a formal contract because it contains all of the necessary elements to transfer funds.
An informal contract is a contract that is legally binding but does not require certain formalities to be met. Sales are the most common of all commercial transactions. In an exchange economy such as ours, practically everyone is a purchaser of durable and consumer goods, and the movement of goods along the continuum from manufacturer to distributor and ultimately to consumer involves numerous sales transactions.
The critical role of the law of sales is to establish a framework in which these exchanges may take place in a predictable, fair and orderly fashion with minimum levels of transaction costs. Article 2 of the UCC governs the sale of goods.
In general, a sale is the transfer of ownership of goods from seller to buyer for a price. The price can be paid in money, other goods, real property or services. Goods are essentially defined as movable, tangible, personal property. For example, the sale of a bicycle, stereo set or furniture is considered a sale of goods. Thus, the law of sales under the UCC does not cover secured transactions, leases or real property issues. The UCC requires that all sales contracts be performed in good faith, which means merchants must act with honesty and candor in their business dealings with consumers and observe reasonable commercial standards in dealing with other merchants.
A court may refuse to enforce all or any part of a contract that it finds to be unconscionable, either because of unfairness in the bargaining process or because the terms of the contract are grossly unfair or oppressive. Businesses must pay close attention to the special provisions for transactions between merchants, or those who act as dealers in goods, because the UCC establishes separate rules that apply to these transactions.
These rules demand higher standards of conduct from merchants because of their knowledge of trade and commerce and because merchants as a class generally set these standards for themselves. The other sections of Article 2 regulate every phase of a transaction for the sale of goods and provides remedies for problems that may arise. Businesses must conform to the UCC's provisions for contract formation, issues arising prior to performance and the seller's obligations to the buyer regarding the condition and quality of his goods.
In addition, the UCC also requires that merchants offer implied warranties of merchantability and fitness that assure that their goods are quality products that are fit for consumption.
Courts generally allow merchants and businesses to contract freely according to their individual needs. However, parties to a sales contract may not agree and may disregard their duties of good faith, diligence, reasonableness and care in their dealings with one another. If a sales negotiation or transaction does break down so that a lawsuit arises, the UCC provides that courts may grant remedies to place the injured party in as good of a position as she would have been in had the defaulting party fully performed.
However, under the UCC, remedies are limited to compensation and thus courts may not set additional punitive damages if the UCC does not specifically provide for them. Courts may supply alternative remedies only if the UCC does not expressly provide for an appropriate remedy. Commercial paper is essentially a contract for the payment of money.
Commercial paper can function as a substitute for money that is payable immediately, such as a check, or it can be used as a means of extending credit or delaying payment, as in a promissory note or certificate of deposit.
One form of commercial paper that is frequently used by businesses is a negotiable instrument. The UCC defines negotiable instruments as signed documents that readily transfer money and that provide a promise to pay the bearer a sum of money at a future date or on demand.
If the instrument does not meet these requirements, it is nonnegotiable and is treated as a simple contract rather than as a negotiable instrument. If an instrument is incomplete because the party omitted a necessary element, such as the amount payable or the designation of the payee, the instrument is not negotiable until it is completed.
If an instrument is ambiguous, such as if it is unclear whether the instrument is a draft or a note, the UCC allows the holder to treat it as either one and present it for payment to the drawee. However, certain rules of construction apply in that handwritten changes overrule typewritten or printed words and words overrule figures unless the words are unclear.
The two basic types of negotiable instruments are promises to pay money and orders to pay money. Promises to pay money are relatively simple documents such as a promissory note. A promissory note consists of one person, known as the maker, extending an unconditional promise in writing to pay another person, called the payee, or the person who bears the instrument a fixed amount of money either on demand when the note is presented for payment or at a specified date in the future.
A promissory note is often used if a person borrows money from a bank to purchase an automobile. In this instance, the bank will direct the person to sign a promissory note for the unpaid balance of the purchase price. Another type of negotiable instrument, called an order to pay money, directs a third person to pay money rather than using the two-person arrangement common in promises to pay money. A check is a form of this type of negotiable instrument.
A check has three parties to it: Without negotiable instruments, Lisa would have to risk sending cash across the country to pay Juan for the furniture. The legal form of a business can have great bearing on the operation and profitability of a business venture. This is because different business organizations provide for different requirements in terms of the management or ownership of the operation, the division of profits, the liability of founders for the wrongdoing of any of their peers and the collection of debts and distribution of assets upon the dissolution of the enterprise.
The following sections will discuss the various forms of business organizations in more detail. The most common forms of business organizations are sole proprietorships, partnerships, corporations, limited liability companies and limited liability partnerships.
A sole proprietorship is a business operated by a person as his own personal property. The enterprise is merely an extension of the individual owner. Agents and employees may be hired but the owner has all the responsibility for the development and growth of the business and personal liability for all of its profits and losses.
A partnership is a voluntary association of people who work together to carry on a business for profit. No formal or written agreement is necessary to create a general partnership. All that is required is that the parties intend to work together to run a business for profit. There are two types of partnerships. In a general partnership, each of the partners is an owner and is entitled to share in the profits of the business.
In addition, each partner in a general partnership typically has unlimited personal liability and is jointly and severally liable for the damages resulting from the wrongdoing committed by any of the other partners. Joint liability means that the partners can be sued as a group; several liability means that the partners can be sued individually. Thus, there are benefits and risks involved in the formation of a general partnership.
In a limited partnership, there are typically two classes of partners: General partners may participate in the management of the partnership and are personally liable for damages. Limited partners, however, are allowed to share in the profits of the business but may not engage in management of the partnership.
Also, limited partners are not personally liable for the partnership's debts. A corporation is a business entity that is separate and distinct from its owners. Thus, the corporation continues to exist even if owners leave the corporation or die.
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Analyze in your work what the reasons are for employment discrimination. Propose strategies that can decrease its occurrence in workplaces.
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Business Law Business Law research paper topics from Paper Masters can help you on the way to your business career or MBA. The company’s obligation, or lack thereof, to pay Ms. Lee a wage equal to that of Mr. Barkley is unclear.
Contract law is also basic to other fields of law with which business interact, such as agency, partnerships, sales of personal property and commercial paper. Thus, contract formation is a basic. Business Law (Contract Law And Estoppel) Introduction A contract is a binding legal document and is enforceable by law and if properly executed can be upheld through a court system.
Your business law paper is an essential academic paper that you should take seriously. It usually accounts for a high percentage of your overall grade and is commonly assigned by many business law . Business Law. Running a business can often times be an extremely challenging and difficult task for a number of reasons. When it comes to defining business law for an organization, this is one of the most challenging tasks that a business owner has to address up front.