Assignment details: Elements of a legal contract. Jim and Laura Buyer visit the local car dealership because they are interested in buying a new car. The car they currently have is aging and is starting to have mechanical problems. Jim and Laura would share the new car, and use it to go back and forth to work and school. Before going to the dealership, Jim and Laura decide that they can only afford $400.00 a month in car payments.
Once at the car dealership, Jim and Laura meet Stan Salesman. Stan shows them several vehicles and Jim and Laura test-drive several of the cars. Jim and Laura particularly like the blue 4-door sedan. Therefore, they agree to give Stan Salesman a $100.00 deposit to hold the car for a day. Stan Salesman does not give them the receipt but guarantees that the $100.00 is refundable. No documents were signed.
The next day, Stan Salesman calls Jim and Laura to ask them when they would like to take delivery of the car. Jim and Laura, on the way home from the dealership, decided that they were not going to buy the car because they did not want to spend that money each month. Therefore, Jim and Laura tell Stan salesman that they have decided not to buy the car and request their $100.00 deposit back.
Stan insists that the $100.00 was a deposit on the car and was meant to be part of the contract to buy the car. Stan is very persistent and insistent that Jim and Laura have contracted to buy the car; therefore, the $100.00 will be applied to the purchase price of the car. Jim and Laura are shocked and angry as not only do they not want to spend the money, but now feel as though they are being duped by Stan Salesman.
Jim and Laura have an appointment to see a lawyer in a few days, but know you are a student taking a business law class and come to you for advice. They are very frazzled, and understandably upset that they may have just purchased a car. Since you have been taking business law, you have read and understand the elements of a contract and the defenses to a contract. Therefore, although you are not a lawyer, you provide some basic advice from what you’ve learned in your business law class.
In three to five (3-5) pages, advise Jim and Laura based on the above facts as presented, the material provided in the text, and material covered in the lecture. In your paper, be sure to address the following:
Define the elements of a legal contract using examples from the scenario where applicable.
Decide whether or not there was a contract for the purchase of the automobile.
Identify the facts from the scenario which support your decision on whether or not a contract exists for the purchase of the automobile.
Use at least two (2) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as quality academic resources.
Format your assignment according to the following formatting requirements:
Typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page is not included in the required page length.
Include a reference page. Citations and references must follow APA format. The reference page is not included in the required page length.
Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following rubric.
TO BE RE-WRITTEN FROM THE SCRATCH
Did Jim and Laura Buy a Car? Elements of a legal contract
A contract is a voluntary agreement between two or more parties and is legally binding hence is enforceable by the law (Miceli, 1997).The contract can be verbal or in written form. A verbal contract, like the one allegedly entered into between Stan Salesman on the one hand and Jim and Laura Buyer on the other, is hard to prove and has a lesser timeline to sue. Indeed, it is advisable that a contract that involves sale of property be in written form as this clarifies the terms of the contract, unlike in a verbal contract where the terms are usually not clear. Further, a contract must be entered into between parties that have the capacity to enter into an agreement. Salesman and the Buyers in the case scenario both have the capacity to enter into contracts because they are not minors, intoxicated or mentally afflicted; the groups of people considered to lack sufficient capacity to enter into contracts (Fried, undated).
A contract also has specific elements that includean offer, acceptance, consideration and meeting of minds. Offer and acceptance usually go together while consideration is not considered in some countries that prefer estoppel.
That Stan Salesman offered cars for sale is not a basis for a binding contract but an offer of sale, an invitation to treat. However, Jim and Laura take on the invitation and end up liking a blue, 4-door sedan after test-driving several cars. The test-driving obviously gives the Buyers a detailed description of some of the cars (including the blue, 4-door sedan), which is a requirement for a legal offer. The other requirements for a legal offer are price, terms and delivery date(Chen-Wishart, 2015). From the case scenario, these latter requirements are not discussed nor agreed between the two parties. Hence, the offer does not qualify as a legal offer but rather an offer of sale; and is therefore not contractually binding.
Salesman offer of sale or invitation to treat was accepted by the Buyers, the offerees. This is evident in their conduct and consequent communication to Salesman to hold the car for a day, paying a deposit for this. The conduct of the Buyers leads Salesman to infer their acceptance, and concomitantly that there is an implied contract. However, this acceptance is for an offer of sale rather than a legal offer since it does not meet the requirements of a legal offer as discussed above. If this was a unilateral contract, it would not need the Buyers’ acceptance. But like most commercial transactions, this would only be considered as a bilateral contract that would require acceptance of the offer: yet it fails to meet the threshold of a bilateral contract based on the fact that the offer is not legally binding and hence the issue of acceptance does not suffice(Miceli, 1997).This hence renders the supposed mutual assent (of the offer and acceptance) invalid and not legally binding.
The other important element of a contract is consideration which refers to the perceived and or actual value offered and accepted when entering into contracts. Both the offeror and offeree acquire value from a contract through exchanging, with the concept of the value being the consideration(Fried, undated). For example, if I buy a business book for $30, the bookshop’s consideration is the book while my consideration is the $30. In a court of law in the United States, the bargaining process to determine sufficiency and or adequacy of the consideration is important. Sufficiency refers to meeting the test of the law whereas adequacy refers to subjective fairness (Fried, undated). So whilst paying a dollar…………………………………………………………………………………………………………………………………………………………………………………………………………………………………. Elements of a legal contract ………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
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