RETAIL LAW

Retail Law

Retail Law

Business Contract

In business, contracts are legally enforceable agreements between two or more parties to perform obligations resulting from bargained-for exchanges (Buckley 1999, 14-23). In most contexts, state laws govern contracts, with each state having jurisdiction-specific rules regarding contract formation and interpretation that have been established by statute and/or judicially created common law decisions. This entry looks at the law regarding contracts and their application in the school setting.

Basic Requirements

In order for contracts to be valid and enforceable, agreements must generally represent a meeting of the minds and intent to be bound objectively manifested by parties with capacity to contract; be supported by valid consideration from each party to be bound; include essential terms that are sufficiently specific and definite to be enforced; be of sufficient form, such as in writing; and have lawful subject matter. (Dunfee 1996, 317)

There must be at least two parties to contracts. Parties to contracts must have the capacity to form those agreements. Minors and incapacitated persons, such as those who are incapable of handling their affairs due to mental disorders, generally lack the capacity to enter into contracts. In the business context, the capacity of parties to enter into contracts might be most relevant with respect to agreements between a business industry and a worker.

Types of Contracts

There are many types of contracts for example, commercial and consumer sales contracts, boilerplate contracts, standard form contracts, preprinted contracts, one-sided contracts, mass-market uniform adhesion contracts, take it or leave it contracts, rolling contracts, shrink-wrap and click-wrap contracts, and so on. But here we just discuss few of them.

In the case of standard form contracts, bargaining—whereby the contracting parties attempt to draft a contract, determine its contents, and agree on contract terms and conditions of performance virtually never takes place. Price frequently comes under the nonnegotiable terms of contract as well. These types of contracts do not depend on aggregatio mentium or consensus ad idem, namely, the meeting of the minds of the parties. Standard form contracts are deliberately drafted on a take it or leave it basis.

According to critical legal scholars, contract law rules are aimed not only at providing the parties with value-neutral and technical nonmandatory default rules to facilitate communication in the process of contract formation but also at implementing fairness and distributive and corrective justice in their contractual relationships. Only a binding and effective contract law regime can deter the parties from using contract terms opportunistically and can contribute to creating fair contractual relationships between individuals, economic organizations, and legal entities. They also tend to hold the view that contract adjudication should enforce individual rights and implement public policy, respectively. (Dunfee 1996, 317)

Classically, there are two types of public contracts. The first corresponds to cost-plus-fee contracts (with the rate of return regulated to control prices in networked industries. The second relies on a price cap. Procurement contracts of the cost-plus type possess two major flaws. On one hand, the service provider has little incentive to increase its efficiency to the extent it knows ...