Elements of a Legal Contract In the Scenario

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A contract is an agreement made basing on the promises made by either one or both the parties involved in some business transactions (Kelly, Holmes & Hayward, 2005). It is, usually, legal and enforceable if it has a consideration, its bargains are legal and the parties involved have the capacity to enter the contract. In addition to these aspects, neither of the parties should exhibit fraudulent intentions. Instead, the parties willingly consent to the terms that make up the contract as a sign of making and accepting the offer (Kelly, Holmes & Hayward, 2005). In most contracts, there has to be some writings to show consent. This is, usually, the best evidence of the existence of a contract. Nonetheless, it does not mean that a contract must always be written in order to be enforceable. Some contracts are made verbally or through the actions of either of the parties. The lack of the items mentioned in this discussion in any contract means that it cannot be enforced by any court of law (Kelly, Holmes & Hayward, 2005). The case of Jim and Laura vs. the automobile company is a good example of such a contract, where agreements are made without necessarily having to write down the terms.

A consideration exists when there is something that induces both parties to enter into a contract (Keenan & Riches, 2007). When such a benefit is missing, the parties do not see the need to have the contract. Similarly, when the benefit is felt by only one of the parties, the other party may not see the reason for entering into the contract. In other words, the benefits of the contract must be in both directions: both the party making an offer and that accepting the offer must have a benefit when the contract is made. A consideration has two elements: exchange and value (Kelly, Holmes & Hayward, 2005). Value refers to the benefits both parties stand to get once the contract is made. These benefits carry a measurable value and form the core of the exchange of promises. Exchange, on the other hand, refers to the promises made by both parties in the process of fulfilling the requirements of the contract. In the case of Jim and Laura, the values involved are the money to be paid by the couple and the car. Stan, on behalf of the company, gets the money while Jim and Laura get the car they were interested in having (Kelly, Holmes & Hayward, 2005).

The bargains in Jim and Laura and Stans contract are legal because the two parties have no plans to buy or sell any contraband goods. The company is licensed to sell vehicles and, on the other hand, the couple is planning to use their legally acquired money in purchasing the automobile. Therefore, the contract cannot be considered unenforceable on this ground (Keenan & Riches, 2007). Besides, the two parties have the capacity to enter into any type of contract because they are old enough, and the law allows anybody in their age bracket to make his/her own decisions (Kelly, Holmes & Hayward, 2005).

Apart from the already mentioned conditions, the parties do not show any fraudulent intentions (Keenan & Riches, 2007). Jim and Laura were initially very genuine in wanting to have a car. They did not plan to defraud the vehicle company by tricking them that they would pay for it only to have it for a day. On the other hand, Stan did not expect them to change their mind when the vehicle was in a good condition. His promise to refund the money was to be enforced in case the vehicle was faulty.

Lastly, there was consent to the terms of the contract by both parties (Kelly, Holmes & Hayward, 2005). Jim and Laura agreed to pay $ 100 as deposit and other installments to follow, and Stan agreed to give them the car. Therefore, even without having any written terms, a contract was made.

My Decision on the Existence or Non-existence of the Contract

My decision is that a contract to sell and buy the automobile was made despite Stan having promised to refund the money. In my view, there was an implied contract between Stan and Jim and Laura (Keenan & Riches, 2007). The behavior of the two parties implied a contract. This is evident in the exchanges made. Stan received $100 as deposit from Jim and Laura and, in exchange, gave them a car for a day. These acts were enough to show that a contract was made.

Facts from the Scenario which Support my Decision on Whether or not a Contract Exists for the Purchase of the Automobile

Jim and Laura are both adults of sound mind. Therefore, they have the capacity to enter a contract (Keenan & Riches, 2007). The same applies to Stan, who by virtue of having been employed as a salesman is an adult of sound mind. On this ground, the parties have nothing to deter them from entering into a contract. Therefore, all the agreements made by them are legally binding.

As mentioned in the definition of terms, both parties did not show any fraudulent intentions. Stan genuinely wanted to sell the car to Laura and Jim. Similarly, Jim and Laura were very genuinely interested in buying the car. Therefore, judged on this ground, the contract for the purchase of the automobile was made. It was also mentioned in the definition of terms that there existed a consideration in the contract, which lured both parties to make the contract. Precisely, the automobile seller was interested in having the money offered by Jim and Laura and the couple was interested in the automobile they had test driven. Therefore, basing on this ground, a contract was made by Jim and Laura and the automobile company.

However, most of the promises and agreements made by both parties were not written down, and Jim and Laura could think of taking advantage of this fact. As their advisor, I will advise them that a contract does not necessarily have to be written down. I will tell them that in the case of their promises and agreements with the automobile company, a contract was implied by the way they behaved. I will point out to them that agreeing to pay $100 as deposit meant that they had accepted the offer made by Stan on behalf of the automobile company. On the other hand, Stans agreement to give them the car for a day meant that he had accepted their offer to pay $100 as deposit and the remaining amount in installments of several months.

References

Keenan, D. & Riches, S. (2007). Business law. Harlow: Pearson Longman.

Kelly, D., Holmes, A., & Hayward, R. (2005). Business law. London: Cavendish.

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Elements of a Legal Contract In the Scenario

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