What Are the Two Primary Sources of Contract Law Quizlet

Contract law is a vital aspect of business law, and it is essential for every business owner and legal professional to have a good understanding of its fundamentals. Contract law governs the agreements between parties, and it is often broken down into two primary sources – common law and governing law.

Common law is a body of law that has been developed over time by judges through cases and legal decisions. It is based on legal precedents and is intended to provide consistency and predictability in court rulings. In the case of contract law, common law sets the rules for contracts that are not covered by governing law. This means that when a contract falls outside the scope of a specific governing law, the common law principles will apply. Common law contracts are typically created through negotiations, discussions, and agreements between parties.

On the other hand, governing law refers to the specific laws set by the government or legislative bodies that govern contractual agreements. These laws include the Uniform Commercial Code (UCC), which addresses the sale of goods, and various state and federal laws applicable to other types of contracts. Governing law provides a predetermined set of rules for contracts that fall under its scope, and these rules are typically followed closely by courts in legal disputes. Contracts that fall under governing law are typically created through specific statutory or legal requirements.

In general, common law and governing law work together to provide a comprehensive legal framework for contracts. While common law provides a foundation for contracts that are not covered by governing law, governing law provides a specific set of rules and requirements that must be followed to ensure the contract`s validity and enforceability. As such, it is essential to have a good understanding of both common law and governing law to create legally binding contracts that can stand up in court.

In conclusion, common law and governing law are two primary sources of contract law that every business owner and legal professional should be familiar with. Common law provides a foundation for contracts not covered by governing law, while governing law provides a predetermined set of rules for specific types of contracts. By understanding these two sources, businesses and legal professionals can better navigate the complex world of contract law and ensure they create legally binding documents that protect their interests.

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