Contracts are private agreements between parties, who by their agreement become obligated to exchange valuable benefits with each another. Contract law serves to make these agreements “enforceable”, which usually means it allows one party to a contract to obtain money damages from the other party upon showing that the latter has breached the contract. Without contract law, these voluntary agreements would immediately become impractical and unworkable. Such agreements lie at the very heart of our society and economy, and are dependent upon contract law. Our society depends upon free exchange in the marketplace at every level. Contract law makes possible the many private, voluntary agreements by which exchanges of goods and services are accomplished in our society at every level.
Business Law is a broad concept that describes the Substantive Law that governs transactions between business entities, with the exception of maritime transportation of goods (regulated by Admiralty and Maritime Law). Commercial law includes all aspects of business, including advertising and marketing, collections and Bankruptcy, banking, contracts, negotiable instruments, Secured Transactions, and trade in general. It covers both domestic and foreign trade; it also regulates trade between states.
The term commercial law describes a wide body of laws that govern business transactions. The Uniform Commercial Code (UCC), which has been adopted in part by every state in the United States, is the primary authority that governs commercial transactions. The UCC is divided into nine articles, covering a broad spectrum of issues that arise in commercial transactions. These articles govern the following: sales of goods, leases of goods, negotiable instruments, bank deposits, fund transfers, letters of credit, bulk sales, warehouse receipts, bills of lading, investment Securities, and secured transactions.
A number of other laws also govern business transactions. For instance, although Article 4 of the UCC governs bank deposits, federal law in the form of statutes and regulations prescribe requirements for Banks and Banking in general. Likewise, federal law governs such issues related to commercial law as bankruptcy and debt collection. Many of the federal laws related to commercial transactions are codified in title 15 of the U.S. Code.