Contract law promotes predictability in exchange. In other words, as a future business manager, you might enter into a contractual agreement in which you agree to pay a certain amount of money in exchange for another business's goods or services. Because contracts are legally enforceable, you are much more likely to receive these goods at the price on which you both agreed when there is an existing contract. Hence, there is greater predictability, and less risk, when a contract exists, because the possibility of a lawsuit deters businesses from deviating from the terms of a contract. Therefore, contracts keep businesses and individuals accountable to the agreements they make. Predictability and accountability are only two reasons why contract law is so important, but certain primary ethical norms underlying these reasons have greater priority and influence than others. As you consider the benefits of contract law, this critical thinking exercise will urge you to think about the primary ethical norms that influence the law of contracts (see Chapter 1).
1. Which primary ethical norm would be most important to someone who viewed contract law as a crucial method of promoting predictability in exchange?
Clue: This person might want to ensure that his business runs smoothly, even though some of his operations depend on another business or individual honoring the terms of the contract.
2. If someone were mostly concerned with contract law's function of keeping businesses and individuals accountable to their agreements, which primary ethical norm would this person value the most?
Clue: This person might be fearful that other businesses or individuals might not perform as they agreed, thereby harming those who depend on their performance.