What laws govern contracts?
The law of contracts was developed over centuries by judges (“common law”). The Second Restatement of Contracts, which is instructive but not binding, is largely based upon common law principles. State statutory law also governs contracts. Federal law on contracts is limited, applying only to contracts with the federal government. For contracts involving the sale of goods, most state laws are the same because of widespread adoption of the relevant section, Article II, of the Uniform Commercial Code. International law may also apply to a contract. For example, if a contract is made internationally, between nationals of different countries, the contract may be subject to the rules of “The United Nations Convention on Contracts for the International Sale of Goods,” which nearly all countries have ratified.
