What Are the Sources of Law of Contract

What Are the Sources of Law of Contract?

A contract is a legally binding agreement between two or more parties. It is an essential aspect of business transactions and regulates the relationships between people and organizations. The law of contract governs the formation, performance, and enforcement of contracts. But where does the law of contract come from? In this article, we will explore the sources of law of contract.

1. Common Law

The common law, also known as case law, is a body of legal principles derived from judicial decisions and customs. Common law is a primary source of law of contract in many countries, including the United Kingdom, the United States, Canada, and Australia. Judges analyze previous cases to determine the legal principles that apply to new cases. As a result, common law evolves over time.

2. Statutes

Statutes are laws enacted by legislative bodies. Contract law is often codified in statutes, which set out the legal rules governing contracts. For example, the Uniform Commercial Code (UCC) in the United States is a set of laws that governs commercial transactions, including contracts for the sale of goods. In the United Kingdom, the Sale of Goods Act 1979 is a statute that governs contracts for the sale of goods.

3. Regulations

Regulations are rules issued by administrative agencies that carry the force of law. In some countries, such as the United States, regulations play a significant role in contract law. For example, the Federal Trade Commission (FTC) issues regulations that govern consumer contracts, such as the cooling-off period for door-to-door sales.

4. Treaties

Treaties are agreements between two or more countries that create legal obligations. International contracts are governed by international law, which is made up of treaties and customary law. For example, the United Nations Convention on Contracts for the International Sale of Goods (CISG) is a treaty that governs contracts for the sale of goods between parties located in different countries.

5. Customary Law

Customary law is a body of unwritten norms and practices that are widely accepted within a particular society. Customary law plays a significant role in contract law in some countries, particularly in Africa and Asia. For example, in some African countries, customary law governs contracts between members of the same tribe or community.


In summary, the sources of law of contract include common law, statutes, regulations, treaties, and customary law. The law of contract is continually evolving, and it is important to stay up-to-date with the latest developments to ensure that your contracts are legally sound. As a business owner or professional, it is essential to seek legal advice when drafting or negotiating contracts to ensure compliance with the law.

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