A legal contract takes place when two parties develop a compulsion enforceable by the law. For a contract to exist, various elements should be present. Some of these elements include the offer, acceptance, mutuality of obligation, writing requirement, capacity and consideration. Richards (2006) reveals that an offer entails the promises that require one party to exchange something with another party via a clear agreement. In the case at hand, there existed an offer when Jim and Laura expressed their interest in buying a car from Stan. They clearly did window shopping for the vehicle and at last, identified a blue 4-door sedan car. Together they agreed to pay a down payment for the car to the salesman and indeed deposited a $100. Paying a deposit for the car is clear evidence that they were ready to buy the car hence amount to an offer.
On the other hand, acceptance refers to the showing concern in the offer and stretching a hand to make an assent. The assent by the party approached can be in writing or orally. In the case under study, an acceptance of the offer existed in this contract. However, the acceptance was conditional. The willingness of Stan to receive the deposit and release the car for use in a day was evidence that he accepted the deal. In this case, the acceptance was to last for a day. However, the agreement was temporary because the terms and conditions were to hold for a day. Stan agreed on the deal but failed to issue the receipt for the transaction arguing that the amount deposited was refundable. Therefore, it holds that the acceptance of the offer was temporary (Richrds, 2006).
Furthermore, consideration is another element of a valid contract that calls for the parties to the contract to have something of importance to come to a consensus. Each party should promise the other something which helps in making an agreement. Focusing on this case, it is true both parties failed to show any willingness to promise each other something to create an agreement. This is to mean that consideration element was lacking.
Moreover, mutuality of obligation is the fourth element of contract in which each party is set to be ready to remit it promises to each other. According to the element, every party must take part in ensuring that it meets its promises to each other. Also, a contract needs to have a writing requirement which is an element that calls for the parties to the contract to put in writing their promises and agreements. Such a move is taken to ensure that both parties abide by the written agreement. Any deviation from the written agreement by either party leads to the breach of contract. The writing requirement did not exist in this case.
There was no contract for the purchase of the car. The deal lacks many elements that make it unenforceable in the law. First, the acceptance of the offer by the Salesman was temporary. The agreement was to last for one day upon which the other part of the transaction was to be agreed upon the end of that day. Stan failed to issue a receipt for the transaction, and he claimed that the amount was refundable. Besides, the two parties did not make any written agreement of buying and selling the automobile.
Q 3 Answer
An offer is usually withdrawn or revoked after the end of the period. In this case, the offer was to take a course in one day upon which the parties were to make a decision on whether to enter into a binding contract. The absence of any formal agreements between the parties regarding the selling and buying led to the revocation of the offer by the offeror.
Furthermore, the transaction fails to be a contract because it lacked consideration. The two parties failed to provide something of great value that is vital for the formation of abiding relationship. No party provided any promise on how they would transact the business of the automobile. Instead, the offeree made a verbal communication that the deposit was refundable. Therefore, it can be argued that contract did not exist because a sufficient consideration did not accompany the business (Koffman & Macdonald, 2010)
Moreover, the act by the two parties did not meet the provision of the element of mutual obligation. Under this element, the parties needed to have a clear guarantee on how they well to carry out their business. However, the parties failed to show faith in conducting their obligations. As a result, this allowed Jim and Laura to use the car for a day then decide not to buy it due to financial constraint. Stan took the initiative to treat the transaction as a binding contract without considering having a clear relationship with the Jim and Laura. In fact, this matter takes the direction of one side arrangements thus making the deal null.
Although it is not a must for a binding contract to be expressed in writing or orally, the it is important for the parties to a contract to have a clear agreement in writing or orally for the purpose of future relations. A contract did exist because nothing was put into writing concerning the business. Besides, there was no clear oral communication on how the business was to take part between the parties. Lack of these two forms of communication between the contracting parties disqualifies the deal to be called a contract (Koffman & Macdonald, 2010).
Taking all those elements discussed in the case into account, it is clear that a contract did not take place. One cannot say that there was a breach of contract because it did not exist. However, to some extent it is true that Stan he breached the agreement which he had held that the $100 was refundable. Jim and Laura did not a promise to buy the automobile, but they had asked to stay with it for one day. It was wise if Stan would involve them in a dialogue and convince them to buy the automobile other than refusing to give back the money as per the deal.
Although no contract existed, it is important to note that any agreement between the two parties would have helped them to realize a binding agreement. This would have changed the perception of the whole thing and pave a way for the formation of a contract between the two parties. Therefore, any parties entering into an enforceable contract should a clear understanding of the element to meet before agreeing to the terms and conditions. In so doing, it would be easier for the parties to agree or disagree depending on the facts.
Koffman, L., & Macdonald, E. (2010). The law of contract. New York: Oxford University Press.
Richards, P. (2006). Law of contract. Harlow, England: Pearson Longman.