LauraJima and Stan
Acontract to be legally binding, it must have the following elements.There must be two parties willing or with intentions to contract(Beatty, Samuelson, & Abril, 2015).In this case, we have two parties the seller (Stan) and the buyers(Jim and Laura).Also, one party has to give an offer to the otherparty, and it should only be made once. A counter offer invalidatesthe original proposal if accepted(Beatty, Samuelson, & Abril, 2015.(Jim and Laura offer to buy a car and commit their actions withdeposit). When such an offer is accepted a contract will exist (Stanagrees to keep the deposit and the car for a day for Laura and Jim).
Forit to be legal, the parties contracting must have the legal capacityto contract(Beatty, Samuelson, & Abril, 2015).It means that, the parties must be adults and in the right state ofmind (I assume that Jim, Laura and Stan were sane and could enterinto a legally binding contract). Also, the contract should not beunder duress or made when one party is drunk to a point he/she cannotunderstand the terms of the contract. The car seller and the buyershould be able to enter into an agreement when each party understandsthe terms of the contract , obligations and all information regardingthe subject matter has been disclosed. (Stan, Laura, and Jim wereaware of the conditions, and no one misrepresented the information).In cases where a party lies or conceals information and one partymakes a decision based on that, the contract is voidable at theoption of the duped party (Beatty,Samuelson, & Abril, 2015.
Also,the object of the contract should be legal the law does not permitunlawful agreement to be enforced(Beatty, Samuelson, & Abril, 2015).(The car dealership business should be legal). Contracts which areagainst public policy are not enforced except when they are intendedto protect a party to a contract, and their enforcement does notcause injury, but its lack thereof would result in damages. Theremust be a consideration, the price of the promise both parties whengetting into the contract must have given something or pledged togive something to gain another(Beatty, Samuelson, & Abril, 2015).Consideration is what differentiates a promise from a gift and acontract.
WhenI promise to give my son a car without getting anything in returnthat is a promise of a gift, but if my son was to give me money, themoney becomes the object of consideration. (The deposit and themonthly fee that Jim and Laura were ready to give was theconsideration while Stan’s car is the consideration for Jim andLaura parting with their money). Also, there should be mutuality ofobligation(Beatty, Samuelson, & Abril, 2015).A valid contract should commit both parties, for instance, the sellerhas the responsibility to provide a product, and the buyer has topurchase it. (The offering of the deposits binds the buyer to buy acar while the acceptance of it binds Stan not to sell the car butkeep it for Laura and Jim). A contract should not be one sided orvoidable at the option of one party. The element of mutual obligationis intended to protect individuals from unfairness and inequality.
Also,some contract has to be written such as hire purchase and propertycontract unless otherwise provided by Uniform Commercial Code Article2-201. For the purpose of proof, the two parties should havecommitted their intentions in words. Such contracts are those thatcan be performed beyond a period of one year, beyond the lifespan ofa party, those of debts, those above sales of goods above $500 andsale of property among others(Beatty, Samuelson, & Abril, 2015).
Wasthere a Contract and a Breach?
Accordingto Uniform Commercial Code Article 2-201 it is required thatcontracts for any commodity that its purchase price is and above $500to be written and signed by the parties. What we know from the casestudy is that Jim and Laura could raise $400 in a month for the car’smonthly installment, meaning the total purchase price of the sedanwas above $500 (Twomey,Jennings, Greene, & Anderson, 2015).If the contract is not written, it is not enforceable. But it can beenforced, if the plaintiff and defendant agree that a contract wasformed, and payment was done on the product and was accepted (Twomey,Jennings, Greene, & Anderson, 2015).
Jimand Laura entered into an agreement with Stan when they showedinterest in the blue sedan car after test driving some cars andpaying a deposit. The deposit binds the seller not to sell thevehicle to other buyers on the promise that Laura and Jim will buyit. If Jim and Laura could have told Stan that they intended not topurchase the car, immediately after they decided not to buy it ontheir way home from Stan’s business, then there would be no bindingcontract. Instead, they waited for a day to pass and then conveyedtheir intentions not to buy it. Stan can argue that he did not sellthe vehicle to willing customers who visited his shop on the promisehe made to Jim and Laura.
Conclusion
Acontract exists despite the issue not being documented because therewas a part performance from both parties. To protect both parties andin this case, the seller, there is an exception to Article 2-201 ofUniform Commercial Code which enables the contract to be enforceableirrespective of it being oral(Twomey, Jennings, Greene, & Anderson,2015)
References
Beatty, J. F.,Samuelson, S. S., & Abril, P. S. (2015).Introductionto Business Law(5th ed.). Boston, MA: Cengage Learning.
Twomey, D. P.,Jennings, M., Greene, S. M., & Anderson, R. A.(2015). Anderson`sbusiness law and the legal environment(22nd ed.). New York, NY: Cengage Learning.