Business law, also called commercial law or mercantile law, the body of rules,

whether by convention, agreement, or national or international legislation, governing the

dealings between persons in commercial matters.
Business law falls into two distinctive areas: (1) the regulation of commercial entities by
the laws of company, partnership, agency, and bankruptcy and (2) the regulation
of commercial transactions by the laws of contract and related fields.

In civil-law countries, company law consists of statute law; in common-

law countries it consists partly of the ordinary rules of common law and equity and partly
statute law. Two fundamental legal concepts underlie the whole of company law: the
concept of legal personality and the theory of limited liability. Nearly all statutory rules
are intended to protect either creditors or investors.

There are various forms of legal business entities ranging from the sole trader,
who alone bears the risk and responsibility of running a business, taking the profits, but
as such not forming any association in law and thus not regulated by special rules of
law, to the registered company with limited liability and to multinational corporations. In
a partnership, members “associate,” forming collectively an association in which they all
participate in management and sharing profits, bearing the liability for the firm’s debts
and being sued jointly and severally in relation to the firm’s contracts or tortious acts. All
partners are agents for each other and as such are in a fiduciary relationship with one
another.
An agent is a person who is employed to bring his principal into contractual
relations with third parties. Various forms of agency, regulated by law, exist: universal,
where an agent is appointed to handle all the affairs of his principal; general, where an
agent has authority to represent his principal in all business of a certain kind; and
special, where an agent is appointed for a particular purpose and given only limited
powers. Appointment may be express or implied and may be terminated by acts of the
parties; the death, bankruptcy, or insanity of either the principal or agent; frustration; or
intervening illegality. (See also agency theory, financial.)
It is inevitable that in certain circumstances business entities might be unable to
perform their financial obligations. With the development of the laws surrounding
commercial enterprises, a body of rules developed relating to bankruptcy: when a
person or company is insolvent (i.e., unable to pay debts as and when they fall due),
either he or his creditors may petition the court to take over the administration of his
estate and its distribution among creditors. Three principles emerge: to secure fair and
equal distribution of available property among the creditors, to free the debtor from his
debts, and to enquire into the reasons for his insolvency.

Business law touches everyday lives through every contractual dealing

undertaken. A contract, usually in the form of a commercial bargain involving some form
of exchange of goods or services for a price, is a legally binding agreement made by
two or more persons, enforceable by the courts. As such they may be written or oral,
and to be binding the following must exist: an offer and unqualified acceptance thereof,
intention to create legal relations, valuable consideration, and genuine consent (i.e., an
absence of fraud). The terms must be legal, certain, and possible of performance.
Contractual relations, as the cornerstone of all commercial transactions, have resulted
in the development of specific bodies of law within the scope of business law regulating
(1) sale of goods—i.e., implied terms and conditions, the effects of performance,
and breach of such contracts and remedies available to the parties; (2) the carriage of
goods, including both national and international rules governing insurance, bills of
lading, charter parties, and arbitrations; (3) consumer credit agreements; and (4) labour
relations determining contractual rights and obligations between employers and
employees and the regulation of trade unions.

Business law, on national and international levels, is continually evolving with

new areas of law developing in relation to consumer protection, competition, and
computers and the Internet.

Business Law Obligation and Contract: What You Need to Know

Business law obligation and contract requires parties involved in a legal and contractual
agreement to uphold their end of the 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.

What Are Contract Obligations?

When contractors enter into a legal agreement, they must fulfill the promises they make in the
agreement. Anyone unable to perform the duties required of them in a contract should not sign
or enter into an agreement.

All contracts have a few basic elements, including:

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:

Where and when the transfer will take place

How much money is owed in exchange for the car.

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.

Contract Obligation Examples

The obligations of a contract depend on the type of contract formed and what is being
exchanged. Contracts such as lease agreements are going to have very different obligations
from sales contracts. Although, almost all agreement types have these basic contractual
obligations:

Payment

Delivery

Quality.

Usually, one side of the consideration in a contract is money. Whether leasing an apartment,
buying a car, or hiring an employee, one of the parties involved in the contract is agreeing to an
obligation to pay money. In sales contracts, the buyer is agreeing to pay a certain amount for
goods. As a part of the payment obligation, the contract should specify the amount and the
payment schedule or deadline.

When a good is being exchanged for payment in a contract, that good must be delivered to the
buyer. This can be as simple as a delivery to the buyer's home address or a specified place to
meet. Such information should also be included in the contract in detail, along with a delivery
date or deadline. The delivery method should also be spelled out.

If a buyer is making a purchase of a product or service, it is wise to make sure the contract
covers the quality of the goods or the service being purchased. This can prevent the seller from
making an unfair profit for something less valuable than what was originally promised.
There are several obligations that are assumed for all contracts under general contract law.
These include:

The obligation to be fair and honest

The obligation to avoid using coercion or force.

Is It Possible to Transfer Contract Obligations?

In certain situations, the obligations of a party under contract may be transferred to another.
When one party outsources its contract obligations, this is called contract delegation.

For example, if a homeowner enters into a contract with a construction company to have an
addition put on his or her house, the construction company may bring in other companies to
handle certain pieces of the project, such as plumbing or painting. The construction company is
still keeping its obligations according to the original agreement, but it is not performing every
action itself.