Business Law and Commercial Regulation: Contracts and Entities
Contracts
A valid contract requires offer, acceptance, consideration, capacity, and legality. Know the difference between bilateral and unilateral contracts, and that acceptance must mirror the offer (the mirror-image rule) unless the UCC's battle-of-the-forms provision applies to goods. Watch for the Statute of Frauds: certain contracts, including those for the sale of goods of 500 or more, must be in writing. Distinguish void, voidable, and unenforceable agreements, and understand remedies: damages, specific performance, and rescission.
Agency and business entities
Agency arises by agreement, ratification, or estoppel. A principal is bound by an agent's authorized acts; apparent authority can bind a principal even without actual authority. Know sole proprietorships, general and limited partnerships, LLCs, and corporations, focusing on liability, taxation, and management. Corporations are separate legal persons with limited shareholder liability.
Commercial regulation
Understand negotiable instruments (holder in due course), secured transactions under Article 9, and bankruptcy basics: Chapter 7 liquidation versus Chapter 11 reorganization. Employment and consumer-protection statutes appear as identification questions.
Worked rule of thumb
If a buyer orally agrees to purchase goods for 800, the UCC writing requirement is not met, but the merchant's exception may apply between merchants. Always check the dollar threshold and whether goods or services are involved, because the UCC governs goods only. A trap is applying common-law rules to a goods sale.