Business Law Fundamentals: Grade 12 Study Guide
1. Introduction to the Legal System
Business law (or Commercial law) governs the dealings between people and commercial
matters. There are two primary types of law you need to distinguish:
● Criminal Law: Focuses on crimes against the state.
● Civil Law: Focuses on disputes between individuals or organizations (where most
business law lives).
2. The Essentials of a Valid Contract
A contract is a legally binding agreement. For a contract to be enforceable in court, it must
contain these six elements:
Element Description
Offer A clear proposal by one party to another.
Acceptance Unconditional agreement to the terms of the offer.
Consideration Something of value exchanged (e.g., money for a service).
Capacity The legal ability to sign (must be of sound mind and legal age).
Legality The purpose of the contract must be legal.
Intention Both parties must actually intend to create a legal relationship.
3. Tort Law in Business
A tort is a civil wrong that causes someone else to suffer loss or harm. In business, the most
common tort is Negligence.
● Duty of Care: A business must take reasonable care to avoid injury to others.
● Breach: Failing to meet the standard of care (e.g., a wet floor with no "Caution" sign).
1. Introduction to the Legal System
Business law (or Commercial law) governs the dealings between people and commercial
matters. There are two primary types of law you need to distinguish:
● Criminal Law: Focuses on crimes against the state.
● Civil Law: Focuses on disputes between individuals or organizations (where most
business law lives).
2. The Essentials of a Valid Contract
A contract is a legally binding agreement. For a contract to be enforceable in court, it must
contain these six elements:
Element Description
Offer A clear proposal by one party to another.
Acceptance Unconditional agreement to the terms of the offer.
Consideration Something of value exchanged (e.g., money for a service).
Capacity The legal ability to sign (must be of sound mind and legal age).
Legality The purpose of the contract must be legal.
Intention Both parties must actually intend to create a legal relationship.
3. Tort Law in Business
A tort is a civil wrong that causes someone else to suffer loss or harm. In business, the most
common tort is Negligence.
● Duty of Care: A business must take reasonable care to avoid injury to others.
● Breach: Failing to meet the standard of care (e.g., a wet floor with no "Caution" sign).
