A contract is an agreement that creates obligations that are enforceable by the law. A contract can either be written or spoken. (Elliott, C. 2015). There are elements to a contract that make it valid and binding. They include
Offer. This is defined as a clear manifestation of willingness to enter an agreement made by another person with full understanding that their assent to the bargain is an invitation and is concluded. (DiMatteo, L. A. 2013). As to whether there was an offer in this case, yes there is an offer. When the salesman offered the buyers time for a test drive and they finally chose and agreed to buy the blue car it was a clear offer.
Acceptance. This basically means that the terms of the offer have been clearly understood and agreed to through consent and assent and at no time will the terms be changed. (DiMatteo, L. A. 2013). When the buyers agreed to the terms of sales and even agreed to pay a deposit, it clearly shows that they have accepted the seller’s offer.
Legal purpose. It means that the reason for the contract must be legal. In this case, the sale and purchase of a car from a licensed dealer is legal and done under the regulations specified by law.
Mutuality of obligation. This refers to the parties’ mutual understanding and also assents in expressing their agreement. They must both agree to the same sense, same thing ant also the same time. (DiMatteo, L. A. 2013). When the two buyers approached a dealer seeking to purchase a car, there was both an offer and acceptance. There was clear communication between the terms of the buyer and the seller and were both in mutual agreement.
Consideration is basically the benefit to the person making a promise or the person to which the promise is intended for. In this case, both the buyers and the seller agreed to the terms and conditions of the agreement leading the buyers to make a deposit of an amount as proof of consideration. (DiMatteo, L. A. 2013). Consideration is sometimes not put in monetary value.
Competent parties. This basically means that the parties to the contract must be of a sound mind and have attained the required age by law. (DiMatteo, L. A. 2013). As of whether the parties were of a sane mind, yes they were to allow them capacity to seek purchase of a new car and also agree to the terms and conditions of the sale.
Whether there was a contract of purchase of a car? The law puts clear guidelines that before there exists a contract that is binding, there has to be an offer, acceptance, mutual obligation and all parties should be of a sound mind and have attained an age that is considered by law. In this case, a contract does exist. (Elliott, C. 2015). The buyers being of a required age approached a car dealer wanting to purchase a car. The dealer made an offer and the buyers accepted to the terms. They promised to buy the car and asked that the salesman held it for a day for they would come back for it. They went ahead to confirm their verbal agreement by paying an amount that partly makes them show desire to purchase the automobile. In return, with mutual understanding the salesman keeps the car and calls them to confirm if the purchase would be completed. A contract that is legally binding does exist here.
There are factors in this scenarios that show a legally binding agreement is in existence. When Stan the salesman gave the buyers Jim and Laura a chance to test the cars that were lined for sale, he made an offer. Jim and Laura found a blue sedan car that best suited their needs. They went ahead to agree to buy the car and this was a clear show of acceptance. This is a legal undertaking based on the fact that this is a car dealer and assumed to be registered. The two buyers were of a sound mind and were of a sound mind and required age given that they were in a position to make purchase of the automobile. (Burnham, S. J. 2011). The two buyers after a mutual understanding went ahead to pay $100 as prove of purchase or intent to purchase the automobile causing the salesman to keep the car for a day as agreed between them. This is consideration and is also a clear proving that they promise to buy the car the next day. The money was binding and it was made in order to promise that they intended to buy the car and to also prevent the salesman from selling it to any other interested buyer. When the two buyers failed to owner the agreement that they made and that was legally binding, this is in fact a breach of contract.
References
Burnham, S. J. (2011). Contract Law For Dummies. Hoboken: John Wiley & Sons.
Elliott, C. (2015). Contract Law 10th edn. Pearson Education Limited.
In DiMatteo, L. A. (2013). Commercial contract law: Transatlantic perspectives.
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