CH 05
Study Guide to accompany Canadian Business and the Law, 5th edition
Chapter 5
CHAPTER 5
AN INTRODUCTION TO CONTRACTS
Objectives
After studying this chapter, you should have an understanding of
• the general concept of a contract
• the legal factors in the contractual relationship
• the business factors influencing the formation and performance of contracts
Learning Outcomes
•
•
•
•
Understand the meaning of a contract (page 101)
Understand when negotiations result in a contract (page 105)
Recognize that the court considers all parties to have equal bargaining power (page 106)
Understand contracts in the context of overall business decisions (page 107)
Chapter Summary
Through an awareness of contract law, business organizations are better able to protect themselves when forming and enforcing contracts. Contracts generally are not required to be in a particular form, but clear agreement on all essential terms is necessary. Those involved in negotiating contracts should be aware of the legal impact of their communication with each other, and they should realize that they are largely responsible for protecting their own interests before agreeing to terms. Contract rules are understood best when assessed in the broader business context, which includes the impact that any given legal decision by a business may have on its reputation with other businesses, with its customers, and in the community at large. A business must also assess its legal options in light of the business relationship at issue, the need to generate a profit, the uncertainty of the marketplace, and the importance of conducting operations with a sense of commercial morality, honesty, and good faith. © 2014 Nelson Education Limited
79
Study Guide to accompany Canadian Business and the Law, 5th edition
Chapter 5
Study Outline
Use this outline to prepare a complete set of notes for this chapter.
Introduction to Contract Law—page 101
Chapter 5
CHAPTER 5
AN INTRODUCTION TO CONTRACTS
Objectives
After studying this chapter, you should have an understanding of
• the general concept of a contract
• the legal factors in the contractual relationship
• the business factors influencing the formation and performance of contracts
Learning Outcomes
•
•
•
•
Understand the meaning of a contract (page 101)
Understand when negotiations result in a contract (page 105)
Recognize that the court considers all parties to have equal bargaining power (page 106)
Understand contracts in the context of overall business decisions (page 107)
Chapter Summary
Through an awareness of contract law, business organizations are better able to protect themselves when forming and enforcing contracts. Contracts generally are not required to be in a particular form, but clear agreement on all essential terms is necessary. Those involved in negotiating contracts should be aware of the legal impact of their communication with each other, and they should realize that they are largely responsible for protecting their own interests before agreeing to terms. Contract rules are understood best when assessed in the broader business context, which includes the impact that any given legal decision by a business may have on its reputation with other businesses, with its customers, and in the community at large. A business must also assess its legal options in light of the business relationship at issue, the need to generate a profit, the uncertainty of the marketplace, and the importance of conducting operations with a sense of commercial morality, honesty, and good faith. © 2014 Nelson Education Limited
79
Study Guide to accompany Canadian Business and the Law, 5th edition
Chapter 5
Study Outline
Use this outline to prepare a complete set of notes for this chapter.
Introduction to Contract Law—page 101