A contract is an agreement between two or more parties creating legal obligations between the offeror and offeree. For a contract to be enforceable by law, it should have the five primary elements that include an offer, consideration, legality, acceptance, and capacity (Nystén-Haarala & Lee, 2010). This essay focuses on discussing the five primary elements in a contract relating it with home purchasing experience between Lance and Richmond American Home. The paper will also explain the breaching of contract and possible remedies for the breach.
The first element to encounter when engaging in a contract is an offer. An offer plays a significant role in establishing the foundation of a binding agreement as well as the subject matter between the parties in the contract. An offer is essential in specifying the subject of the transaction, the price of sale, when the operation will take place as well as required conditions for sale to happen (Nystén-Haarala & Lee, 2010). The intention of the offeror to construct a legal obligation plays a critical role in establishing an offer making it the first step or element when engaging in contact. Richmond American Home, in this case, was an offeror providing a suggestion of selling a home for Lance, who in this case is offeree. Richmond American Home manages to approach Lance with a written document (offer) containing terms and conditions stating that the seller decided to sell the house after the buyer manage to show interest in buying the property. After establishing that Richmond American Home had an offer of selling the property, Lance had consent to pay the base price of the property after agreeing to terms and conditions.
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The next element after establishing an offer is acceptance. in acceptance, offeree either verbally or through writing, agrees to the terms and conditions of the contract. The element of acceptance in a deal is also very crucial because it makes sure that the partners have a clear understanding of terms and conditions by laying out points regarding appropriate form of acceptance, revocation rights, as well as expiration dates if it applies. Lance agreed to terms and conditions of purchasing the house from Richmond American Home and manages to sign the acceptance document showing that Lance agrees to all terms regarding home purchasing contract.
The third element in the contract is "Consideration," where each party engaging in the agreement has to bring value to the contract (Nystén-Haarala & Lee, 2010). The element of consideration in the contract usually involves monetary value or a promise to carry out a particular task. In the case of Lance and Richmond American Home, the two parties agreed to go for monetary value where Lance was obliged to pay a certain amount of money and later pay the remaining amount through installment. The fourth element is Mutuality of Obligation, where it captures the binding agreement between the two parties regarding terms of consideration. A court can come in when there is disagreement between the two parties and will help to determine if the parties meet the mutual obligation.
The last element in a contract is Competency and Capacity that requires all the parties to be legally competent and can agree to the terms and conditions in the contact. The mentally challenged or the minors do not qualify as competent, and usually, the court plays a significant role in deciding whether a party cannot enter into a legally binding contract. Both Richmond American Home and Lance had competence as well as the capacity to engage in a deal.
Breaching of contract occurs when a party fails to perform the terms of the agreement, either written or verbal. In most cases breaching of contacts occurs when one of the partners fails to deliver goods or services, providing inferior products or services, failing to pay on time or even failing to complete the job (Heeney, 2012). Lance in the house-purchasing contract manages to breach agreement after he fails to pay the remaining amount of money as agreed on a specified time, forcing the court to come in between and find the solution to issue. The type of breach in contract committed by Lance was an anticipatory breach of contract because he fails to fulfill his part of paying the remaining amount of money on time giving an impression as if he is refusing to make payment as per agreement. The court plays a critical role in solving such breaches in contract basing the decisions on terms and conditions and agreements made during engaging in a deal.
References
Heeney, C. (2012). Breaching the contract. he Information Society, 28(5) , 316-328.
Nystén-Haarala, S., & Lee, N. &. (2010). Flexibility in contract terms and contracting processes. International journal of managing projects in business, 3(3) , 462-478.
