what is an importance of contract formation in business law
TRANSCRIPT
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What is an Importance Contract Formation in Business Law??
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When drafting a business contract, it is important to understand the basics of contract law in case a dispute erupts.
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The basic principles of contract formation are:
principles
of
contract formation
Cooling-Off
Periods
Void Contracts
Voidable Contracts
Contract Parties
Cooling-Off
Periods
Void Contracts
Basic Formation
Requirements
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Basic Formation Requirements
Basic Formation Requirements can cause problems when, for example,
a purchase order is confirmed through the exchange of emails
whose texts lack any clear statements indicating offer or
acceptance.
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Cooling-Off Periods
The laws of most states allow a buyer of consumer goods to cancel the contract within 72 hours after signing it without stating a reason. These laws
are designed to protect consumers from high-pressure
sales tactics. In effect, a consumer contract in those states is not formed until 72 hours after it is signed by the buyer. These laws typically do not apply to contracts between
merchants.
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Void Contracts
A contract is considered void if no true agreement ever occurred or if enforcing the contract would be contrary to public policy.
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Voidable Contracts
Voidable contracts are contracts that may be canceled by one party at any
time. Although a contract is formed, it binds only one party.
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Contract Parties
the parties to a business contract are not individuals but limited liability entities such as corporations and LLCs.