What are Common Law Contracts?

• A. An agreement between an employer and one employee (Usually only used for contracts of managers)
• B. An agreement covering all employees in an industry
• C. An agreement signed by unions
• D. An agreement between two businesses

Answer: (A)

Common law contracts come from the ordinary law of contract, not a statute. They are private agreements formed by offer, acceptance, consideration, and the intention to create legal relations, and they govern a wide range of commercial and private arrangements. The best description among the options is an agreement between two businesses, because it illustrates a private, negotiable contract typical of everyday commercial dealings governed by common law. The other options describe specific situations—industry-wide or union-related arrangements or an employer–employee setup—that are often governed by particular frameworks (collective agreements, statutory rules) and aren’t the general image of a common law contract.