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Substantive Law: Definition, Example and Related Terms

What is Substantive Law ?

Substantive law refers to the body of laws that govern how people behave and interact in society. It defines the rights and responsibilities of individuals and organizations, outlining what is permissible and what is prohibited. In the context of contracts, substantive law determines the rights and obligations of the parties involved in the agreement, helping to establish what they are supposed to do or refrain from doing.

For instance, substantive law will specify the requirements for forming a valid contract, enforceable promises, and remedies available in case of breach. It provides the framework within which parties can draft agreements that align with legal standards and societal norms.

Substantive law is distinct from procedural law. While substantive law focuses on legal relationships and the duties of individuals, procedural law outlines the rules for enforcing those rights and duties in the court system. Together, they ensure the legal process is fair and just.

Understanding substantive law is crucial for contract managers, legal representatives, and parties to a contract, as it impacts negotiations, agreement drafting, and dispute resolution. It lays the foundation for understanding what is legally binding and shapes how contracts are structured.

Example(s)

  • Scenario Description
    Two businesses enter a sales contract where one party fails to deliver goods on time. Substantive law will dictate the breach of contract consequences, possible penalties, and remedies available to the aggrieved party, such as specific performance or damages.
    An employer and employee sign a contract that specifies non-compete clauses. The enforceability of these clauses is determined by substantive law, which evaluates the reasonableness and necessity of the restriction against the employee's right to work.