Generally speaking, contracts are enforced and governed by laws in the states where the contracts were made. Depending on the type of contract, it will either be enforced by the common law or the Uniform Commercial Code. While both the common law and the Uniform Commercial Code govern contracts based on a set of guidelines, they vary greatly in their method and purpose.
Most contracts such as employment agreements and leases are governed by common law. This set of laws is tradition-based and have evolved over time based on court decisions. While common law may govern most business agreements, it does not govern contracts created for the sale of goods. Those contracts are governed by the Uniform Commercial Code (UCC). All commercial transactions completed through contract are to follow a standardized collection of guidelines put forth by the UCC. Each individual state may treat contracts used for the sale of goods differently. However, most states have adopted a majority of the UCC's provisions and use them in addition to their individual state laws.
Regardless of the type of contract in question, disputes typically follow the same method of resolution. Minor disputes may be resolved informally through the method set forth within the contract itself. If these informal methods fail to produce a resolution, parties may be able to seek resolution through small claims or other litigation action. If disputing parties wish to avoid a formal lawsuit they may be able to enter into mediation or arbitration to resolve the issue.
If you are facing a contract dispute and are concerned with what laws govern your contract and what remedies are available to you, you may benefit by working with an experienced business law attorney. With their help, you may be able to successfully settle your dispute in a timely manner.