Corporate Contract Law
Corporate contract law is a blend of contract law and corporate law. Dealing with how businesses legally form, interpret, and enforce contracts, and how those contracts fit within a company's internal governance (board, officers, shareholders, etc.).
Core Idea
If Company A wants to acquire Company B (the “parties”), this would be known as an acquisition, where “we,” the law firm, must negotiate terms and conditions of the “agreement” (contract) in order to ensure that both parties are happy with the terms. This is a typical application of corporate contract law.
Key Principles
At its base, contract law and corporate contract law follow these principles:
Offer and Acceptance - One party offers, the other accepts.
Consideration - Something of value must be exchanged.
Intention to create legal relations - The parties intend to be legally bound.
Capacity - The company or person must have legal capacity to contract.
Legality - The contract’s purpose must be lawful.
Failure in any one of these principles results in a void and an unenforceable contract.
Rules of Corporate Contract Law
Corporate contract law adds an extra layer - the company structure itself:
A company acts through its agents (directors, officers, employees).
A contract is only valid if the person signing has authority (actual or apparent) to bind the company.
The corporate constitution, bylaws, and board resolutions can limit or define who can make binding contracts.
Contracts must often comply with corporate procedures.
Context of Contracts
Business to Business
A Deeper Dive into
Business to Consumer
In day-to-day commerce, companies must ensure they are complying with consumer laws, and must also ensure that they have security from being litigated. A typical example of this is the terms and conditions of an online purchase; when downloading an app, companies create contracts for how the app shall be used by the consumer, and how the company will utilize data, and the privacy of the consumer.
Consumer to Business
For consumer contracts, a typical example is buying an item from a corporation in the form of leasing, outright buying, or any other means. An example is buying a car from a dealership; you need to ensure that the contract terms are in both parties' best interest.