Contract Law and How Business Can Get Benefits From It

After several years practising commercial law, I came into conclusion that commercial law is made not to limit the economic activities. Instead, it is made to bolster economic activities.

The main tool of commercial law is contract law and contract itself.

It is been told that the philosophy of contract is to promote contracting parties’ economic interest (maximum benefit for themselves). Contract is a principle vehicle to facilitate economic activities.

Business itself, where economic activities take place has always been a fruitful source of contract law. The principle of “freedom of contract” gives an unlimited room for business and businesspeople to use body of contract law to achieve their economic interest.

Businesspeople use contract to plan their relationship. This circumstances bring us into two conclusions:
– Contract is a business plan written in legal language
– Contract is a tool to achieve something. Contract is not the end result.

Contract in its modest form is a tool to create a legal right and obligation between the contracting parties (businesspeople), allowing businesspeople to make financial and operational arrangement to perform the contract. Contract also gives legal position, enable businesspeople to adjust their attitude accordingly to achieve desirable economic outcome (for example, get paid by the customer).

Businesspeople also use the benefit of contract to define their business deal and business relationship. Contract as a body of law is capable of being applied in predictable way. This gives some certainty to businesspeople.

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