Business Law Unit 2 Practice Test Instructor Jill Jasperson 1.
All promises are contracts.
Contract law assures the parties to private agreements that the promises they make will be enforceable. A contract is formed by two or more parties who promise to perform or to refrain from performing some act now or in the future. A bilateral contract is created when a. one party gives a promise in exchange for the other party's promise. Contract law a. is not generally followed in business agreements because of potential problems. The fact that an offeror's words and conduct are held to mean whatever a reasonable person in the offeree's position would think they meant is the basis for the subjective theory of contracts.