The Importance of Business Contracts
Contract law lies at the heart of our system of laws and serves as the foundation of our entire society. This is not an exaggeration. It is a simple observation – one that too often goes unobserved.
Our society depends upon free exchange in the marketplace at every level. Contract law makes this possible. Exchanges in the marketplace always depend upon voluntary agreements between individuals or other “legal persons”. Such voluntary agreements could never work without contract law.
Contract law serves to make these agreements “enforceable”, which usually means that it allows one party to a contract to obtain money damages from the other party upon showing that the latter stands in breach.
Without contract law, these voluntary agreements would instantly become impractical and unworkable. Since such agreements lie at the very heart of our society and economy, and since they depend upon contract law, it is no exaggeration to say, as I have just done, that “contract law lies at the heart of our system of laws and serves as the foundation of our entire society.” Those were the very words that I used to begin this essay.