Introduction
Contracts are defined as the legal agreements between two or more parties. Contracts can be action based, verbal or written but written contracts are considered the best because, in case of a deviation by either the parties, it can be presented in court. Although contracts vary depending on the surroundings and circumstances, one common factor that cuts across all contract is that there must be goods or services that either party want and an offer have to be made and accepted. In the scenario, Jim and Laura wanted to buy a new car, and so they approached Stan Salesman who had a car dealership and made a verbal agreement about the car. For a contract to be considered legal and binding, there must be some elements which include offer, consideration, capability and capacity, acceptance, mutuality of obligation, and in some case a written instrument should be present.
Define The Elements of a Legal Contract Using Examples from The Scenario Where Applicable
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For a contract, the first element of a contract is the offer which is the offeror's attempt to get into an agreement with the other party. The first step in the making a contract is extending an offer to the potential customer. The offer includes all the details including the terms and conditions of the offer. In major corporations, the management organizes a treat to all potential customers to allow them to assess the offer alongside the terms of agreement (Wellin, 2016). Stan Salesman made an offer by allowing Jim and Laura to test-drive several cars in which they settled for the blue four-door sedan. The second element of a contract is accepted. After the offeror has made the offer, the offeree either rejects or accepts the offer via mail, phone call or verbally. For a formal proposal, the use of mail and email is recommended for proper record keeping (Wellin, 2016). The couple, Jim and Laura, after settling for a 400 monthly installment car, made an acceptance payment of $100 and although it was verbal, it is still considered an offer because the fee was to hold the car for a day.
The third essential element of a contract is a meeting of the minds which in contract law refers to the recognition of the contract by both parties and agreement to enter into its obligation. Meeting of the minds, which is also called mutual assent or agreement, is open to voiding in case of a discovery that one or both parties were under duress, under the influence or misinterpreted during the formation of the contract (Romanova & Egorenko, 2017). What is more, the contract can come to an end due to personal reasons such as lack of enough finances or the feeling that the property or service is no longer needed. When such a situation happens, the offeror dissolves the contract and makes reimbursements of any funds collected as well as any documents requested. For instance, Jim and Laura, after selecting the car and giving the $100 requirement fee, later decided that the did not want to spend money every month in paying the $ 400 car installments and thus wanted a refund of the $100 since they would no longer be purchasing the car. The car dealer, however, was adamant about refunding the money and insisted that the money is part of the purchase. Stan was wrong since the contract law requires him to refund the money.
Each of the contracting parties must be in a legal capacity to enter into the agreement for its validity to be considered. For example, a mentally unstable person is unfit to make any rational decisions. For this reason, the health of the person is always considered for both sides for the agreement to be considered legal. In addition, the history of all the individuals partaking the contract, whether a history of drug and substance abuse or fraudulent dealings because such details will determine the success rate of the legal union (Romanova & Egorenko, 2017). The individual must also agree by free will without outward cohesion, force, or blackmail. That is the case for Jim, Laura, and Stan. The couple needed a car and approached the car dealer of their choice where they choose it without coaxing from Stan. On the other hand, contacts are only created for legal products and services which means that the law does not recognize illegal contracts such as drug trafficking. In any form of agreement, the statutory intent of all individuals involved must be made clear and following the law is mandatory. In the case of the Buyer's, their intention was clear from the beginning. The previous automobile that they had was aging and having mechanical issues. Consequently, a new car was necessary for commuting to work and school.
Decide Whether or Not There Was a Contract for The Purchase of the Automobile
There was a contract for the case of Jim and Laura versus Stan Salesman. The agreement was verbal which means that no documentation was available for proof. However, Salesman asked the couple to pay $100 for holding the car for the day until the couple would have the vehicle delivered. The money, thus, is the proof of the contract. The couple, however, did not insist on a receipt since they had faith that the Mr. Salesman would honor his end of the verbal contract. Moreover, he assured them that the money was refundable once the vehicle was delivered. Nonetheless, after they changed their minds and were no longer interested in the automobile, the dealer declined to pay the money back and claimed that it was part of the sale. Lack of supporting documents in the agreement makes it harder for the two buyers to prove the existence of the contract since, in a court of law, oral evidence is inadmissible unless recorded. Despite this, Jim and Laura should sue Mr. Stan and get their money back since the dissolution of a contract demands payment whether the purpose was achieved or not.
Conclusion
Conclusively, the formation of a contract involves an offer and acceptance where one or both sides have something the other is interested in. The next elements are a consideration, mutuality of obligation, competency and capacity, and a written instrument. One of the crucial items in an agreement, especially a formal one, is determining the capability of a person to bear the weight of a contract. This means that the individual must be at the peak of their personal, mental and financial health for the bind to be considered legal. Jim and Laura wanted to buy a car after the old one developed some mechanical issues and thus they approached a local dealer, Mr. Stan Salesman to make the purchase. After settling for a car for $400 monthly and paying an upfront amount of $100, they reconsidered their decision. The deal did not succeed because after backing out of the purchase, Stan declined their request for a reimbursement which is their right. For this reason, the two individuals should take legal action against Salesman because he unfairly denied them their cash. Although the case will be severe because of lack of documents to prove that the contract took place, they should be hopeful that their right to get paid together with the damage incurred will be upheld in a court of law.
References
Romanova, Y., & Egorenko, A. (2017, May). Scientific Methodological Approach to Effective Contract Assessment. In 2017 International Conference on Culture, Education and Financial Development of Modern Society (ICCESE 2017) . Atlantis Press.
Wellin, M. (2016). Managing The Psychological Contract: Using The Personal Deal to Increase Business Performance . Routledge.
