Contract Laws

The law of contracts affects almost all aspects of business. Leases, sales agreements, and employment [Page 285]agreements are all contracts. Without a basic understanding of contract laws, it is impossible to do business. A contract is a form of agreement between two or more persons (known as parties to the contract) with the purpose of creating mutual obligations between or among the parties. This entry discusses contract laws in the United States, with examples from the food and restaurant industries.

Contracts are entered into every day on an oral basis. People order something at a restaurant and pay for the food. The restaurant provides the food that was ordered. The business that is transacted via contract is commonplace and oral. The actual obligations are incurred and ...