Contract Law: Analysis of the Concept

Introduction

Law is usually understood as the structure of rules which are developed and carried out through various governmental institutions in order to regulate and bring overall harmony to the society. In the contemporary world, some people even describe the law as an art of integrity and justice since it aims to create a safe and transparent environment for every individual. The system of law is complex and can be divided into various branches; therefore, a “thorough knowledge of the law takes years of specialized study”². One of the divisions of the law structure is business law, which is sometimes also referred to as commercial law. Due to the fact that people all over the world continually engage in business by purchasing goods, renting vehicles and apartments, and becoming employees of different companies, it is essential to understand the divisions and different processes happening in the sphere of business law. Thus, the following paper will take a closer look at the topic of contract law by defining this concept, explaining the processes involved, identifying a significant issue, and examining its use on the international level.

Definition of Contract Law

Contract law is a complex and one of the most salient bodies of business law that is established around the organization and enforcement of agreements. In the modern society, people are regularly required to follow specific duties imposed on them to ensure that society functions according to the latest guidelines. However, individuals cannot always act entirely on their own. Human beings are continually facing life situations which involve cooperation with other people or businesses and, very often, spoken communication is not enough to identify the needed regulations between the parties. Consequently, contract law is what is being used to control and coordinate the relationships established as a result of an agreement.¹ Over the years, contracts have gained significant recognition from the public, became more sophisticated, and started to appear on the international level.¹ Any individual who conducts business or develops legal relationships with corporations is required to use contract law. Both companies and clients sign agreements when they purchase and sell goods, create employment and insurance contracts, and license various activities.¹ Contract law ensures transparent cooperation between people and businesses and, for this reason, it is widely used in organized society.

Process of Contract Formation

Since the legal contract is an agreement that enforces parties to follow specific guidelines, it must include several elements. At the very beginning of contract establishment, one agent makes an offer which should clearly state the terms the other person or business has to agree with and sign.¹ In case another agreement participant is ready to accept the suggestions without bringing any additional changes, the contract becomes complete.¹ One of the most critical elements that follow the acceptance stage is the intent. At this phase, both parties agree on entering a legal contract that can be enforced by law in case any misunderstandings or conflicts arise between the parties.¹ Finally, the last stage of the contract development is the consideration which means that every side has to give up something of value in order to attain a specific goal stated in the legal agreement.¹ Some other elements that each contract contains are terms and provisions which stand for the details, such as numbers, places, people, and positions.¹ In general, both of the parties have to be competent enough to enter the contract and accept its rules and conditions voluntarily.

An issue in Contract Law

Like any other body of legislation, contract law changes and goes through rapid stages of advancement, which contribute to the emergence of different legal issues. The digital revolution and the growing popularity of technology have considerably increased inequalities and brought problems to contractual practices that have to be regulated by the law.¹ Nowadays, one of the most visible problems of contract law in the digital environment is the lack of transparency. Even though it may seem that with the use of highly developed technology and the Internet, it should be much easier to access needed information and rules, various companies tend to confuse or deceive their customers.

Different online platforms claim that their main benefit is that, after agreeing to terms and conditions, the client is eligible to access any documents and increase the number of business opportunities.¹ Nevertheless, millions of people responded that they need more transparency concerning the data collection processes and the exploitation of their documents after the contract formation procedure.¹ Hence, digital contracts should be simple to understand and provide all the information about personal rights and actions in case the terms are violated.

International Contract Law

Since contemporary society is interconnected and businesses are cooperating on the global level, the need for international contracts is growing. The establishment of businesses between different countries does not exclude the requirement of signing a legal agreement. People still need to go through the same process of contract formation and agree on the consequences, conditions, and guidelines of the arrangement. On the other hand, the international dimension can bring slight corrections to the process of agreement establishment. When people or businesses are entering a contract that develops a secure connection between more than one country, the issue of choosing which set of obligations should be applied arises.¹ While organizing the communication and transactions, both parties need to agree on a specific set of rules and, in case of a misunderstanding, refer to a default set of regulations created to control the process.¹ For instance, at a European level, the rules for conflict resolution “are unified in the Regulation of the Law Applicable to Contractual Obligations.”¹ Therefore, contract law does not only exist on the local level but also receives much attention when establishing corporate relationships globally.

Conclusion

To summarize, laws are an essential component of contemporary society as they help to establish trustworthy relationships between individuals and organizations. Laws identify what has to be done and what are the consequences of disobedience. For this reason, businesses widely use laws as a way to ensure that they will achieve the desired goal and, at the same time, deepen their cooperation with partners. There are various segments of business legislation; however, contract law is one of its most used and popular branches. Since millions of individuals all over the globe have to deal with the establishment of corporate relationships every day, contract law helps enforce the needed rules and obligations. Contract legislation is a complex concept which includes various processes and has to solve regularly arising issues in the digital and international environment. Therefore, the presented paper discovered contract law more deeply by discussing its theory and processes, mentioning one contemporary problem, and determining contract establishment details on the global level.

Reference List

1. Beale H, Fauvarque-Cosson B, Rutgers J, Vogenauer S. Cases, Materials and Text on Contract Law. 3 ed. Oxford, UK: Hart Publishing; 2019.
2. Davidson DV, Lynn MF, Brenda EK. Business Law: Principles and Cases in the Legal Environment. 2 ed. Frederick, MD: Wolters Kluwer Law & Business; 2015.