Business law

Introduction

Commercial law means that body of law which particularly concerns commerce or trade; but in the following lectures an attempt has been made briefly to summarize those rules of law which affect human relationships generally; and to acquaint the student not only with the usages and customs of business — such as the purchase and sale of commodities^ methods of payment and the conduct of corporations and partnerships — but to explain those everyday contacts and occurrences which^ if misunderstood^ may cause great trouble and sometimes loss to any one of us.

No attempt is made to discuss abstract principles of law except in so far as such discussion is absolutely necessary. The students of business schools are learning to be practical men and women and a course in Business Law should assist them to lead useful lives without attempting to educate them for the practice of the law.

The blank pages are inserted for the use of the student who should be encouraged to work out his own problems illustrating the text.

Contents

CHAPTER PAGE

Introduction iii

I. Man's Rights and Duties 1

II Contracts— In General

Among those rights and duties which a man takes upon himself voluntarily are those arising from his contracts, as stated in Lecture I. The underlying principle of all contracts is that the agreement is purely voluntary. If there is any compulsion, whereby one of the parties is forced to agree, then there is no real contract. Most of the transactions between men in everyday life are contracts or voluntary agreements.

List of Ordinary Contracts. — The following is a partial list of such contract transactions:

1. Sales, either of personal property or of real estate.

2. Leases, either of personal property or of real estate.

3. Transportation, — freight, passenger, express, mails and cartage.

4. Employment.

5. Insurance, — life, fire, marine and casualty.

6. Labor and materials, building and repairs.

7. Bills and notes, negotiable instruments.

8. Loans.

Definition of Contract. — A contract may be briefly defined as a voluntary agreement between two or more persons for the breach of which the law affords a remedy. (The business man is not interested in a contract for the breach of which there is no remedy.) This remedy may be:

1. Damages.

2. Injunction.

3. Specific performance.

There are certain cases in which two of these remedies may be applied at the same time ; for instance, the court granting an injunction may also award damages.

Definition of Damages.- — Damages is a sum of money which is awarded by the judgment of a court to the injured party to pay him for his loss. Damages ordinarily do not include profits or anything which is uncertain, but are awarded as compensation only.

Definition of Injunction. — Injunction is an order of a court forbidding a man doing something which the court says is wrong. In a contract case a man may be forbidden to take advantage of his breach of the agreement.

Definition of Specific Performance. — Specific performance is an order of a court compelling a man to carry out his agreement as he promised to do. This remedy in contract cases finds its chief application to agreements for the sale of real estate.

Where Remedies May Be Sought. — Proceedings for damages are brought in a court of law, while those for injunction and specific performance are instituted in a court of equity.

Ill

CONTRACTS— CLASSIFIED

Contracts are divided into two classes :

1. Those under seal^ called specialties.

2. All other contracts not under seal, whether written or oral, called parol contracts.

A seal was a sacred thing at the common law, for it was used in place of a signature in ancient times when few men could write their names. In those days the seal on a paper or parchment was made with a signet (signature) ring impressed upon wax and as this ring was carried upon the person of the contractor, there was little likelihood of forgery. To-day in some States the seal has lost its formality, but in others it retains the same solemn character it had at common law.

Kinds of Seals. — There are different kinds of seals as follows :

1. Printed seal — (seal) (L. S.).

2. Scroll seal, usually made with a pen.

3. Sticker seal, which is attached to the paper.

4. Wax wafer, impressed with a die or signet.

5. Court, corporate and notarial seals usually impressed in the paper itself by a die.

Sealed Contracts. — Contracts under seal include deeds, mortgages, mortgage-bonds, releases and judgment notes. The chief differences between contracts under seal and parol contracts will be treated under the topics " Consideration ^^ and " Statute of Limitations."

Parol, Including Oral Contracts. — Parol contracts, as stated above, include written agreements not under seal as well as oral agreements.

Necessity for Written Contracts. — An oral agreement in most cases is as binding as a written agreement (except where required to be in writing by the Statute of Frauds), but it is very difficult to prove its terms. The recollections of witnesses who have heard an oral agreement made usually prove faulty and a jury is obliged to guess what was really agreed upon. Consequently all important business contracts should be in writing but need not be under seal.

Executory and Executed Contracts. — When a contract has been entered into but has not yet been fulfilled it is said to be executory ; while if completed it is said to be executed. Where one man has carried out his part of the contract, he is said to have executed his agreement, although the other contractor has not yet performed and although as to him the contract is executory.

Signature of Illiterate or Disabled Person. — Where a man is unable to sign his name he may make his mark in the following manner, his name having been written in by the witness who should attest the mark by writing his name at the lower left-hand side of the instrument :

Witness : His

John (X) Smith.

John Jones, Mark

2213 Van Pelt Street.