What is the most effective use of a business contract?
A) an aid for a court to interpret a business arrangement
B) a tool for the management of liability exposure
C) a means of limiting warranties for defective products
D) a mechanism limiting alternative dispute resolution

Question

Quizplus · Accepted Answer

The most effective use of a business contract is as a tool for the management of liability exposure. A well-drafted contract can help define the responsibilities of each party and limit liability in case of a breach or other issues. It can also help prevent disputes and provide a clear framework for resolving any that do arise, making it an essential part of any business relationship. The other options - aid for interpretation, limiting warranties, and limiting dispute resolution - are all possible uses of a contract, but not the most effective one.

What Is the Most Effective Use of a Business Contract