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Contracts: Definition, Categories, and Sources of Law

Contracts are one of the most commonly used legal documents in the business environment. Business owners and managers are often involved with the day$-$to$-$day contract negotiation, oversight, and compliance necessary to carry out business operations. Understanding contract law begins with a fundamental understanding of the definition and categories of a contract and the sources of law that govern them. Because certain contracts are governed by common law while others are governed by statutory law, learning to define and recognize the categories of contract are essential to limiting risk and controlling liability.