Law Sample Paper

Did Jim and Laura Buy a Car

A legal contract entail an agreement between two or more parties that creates enforceable obligations. Both verbal and written contracts are considered valid and legally binding.  To be valid and binding, a legal contract must be characterized by five essential elements of offer, acceptance, mutuality of obligation, consideration, and competence. This paper will examine these essential elements to determine whether a contract exists for the purchase of the car in the current case study of Jim and Laura and the salesman.

Offer

An offer can be defined as a proposal containing specific terms of one party to enter into contract with another party. An offer is fundamental to the creation of a legally enforceable contract and is validated via bargaining between the parties involved. In the current case, there is an offer. The salesman did offer the buyer ample time for a test drive. After the test drive, the buyer picked and agreed to purchase the blue car. It is a clear offer containing an agreement that the buyer accepted.

Acceptance

Acceptance means that the offeree has understood and agreed to the terms of an offer. Acceptance is valid only if the offeree agrees to the contract by consenting or assenting. However, acceptance must reflect the terms of the offer otherwise it is considered a counteroffer (Altschuler, Sgroi, & Ryniker, 2016). In the current case, Jim and Laura agreed to the terms of sale by committing a refundable deposit of $100. But the salesman (Stan) violates the verbal agreement by failing to refund the deposit when Jim and Laura decide not to buy the car. Once the provisions of the contract have been agreed upon no alteration are permitted otherwise the offer is rendered a counteroffer

Mutuality of obligation

Mutuality of obligation is the mutual understanding of the contracting parties. The buyer and seller must both agree to the same thing, same sense, and the same time (McKendrick, 2015). In the current case, there is an offer and acceptance when the two buyers transacted with the salesman. The buyers gave the salesman a clear communication that led to mutual agreement. After a test drive, the buyers picked the car of their choice and agreed to the cost of $400 for the car and made a refundable deposit of $100. The two buyers had the power of invalidating the agreement with the salesman because the deposit is refundable. While Laura and Jim decided they are not going to purchase the car that require them to make monthly car payment of $400, Stan is unaware of this condition. Moreover, their contract is not contingent on any external factors.

Consideration    

This refers to the benefit each party stands to gain in the contract. In the current case, the salesman and the buyer consented to the terms of the contract making the buyer to commit a $100 deposit as evidence of consideration. The salesman however fails to issue the receipt to the buyer while claiming the deposit to be refundable.

Competence

The law requires the contracting parties be of sound mind as well as of the required age. Stan, Laura and Jim are all adults and competent enough to enter into a contract. They are also of right mentally status to understand the terms and requirements of the contract. Their competence supports the existence of a contract. Based on the facts provided, the salesman failed to disclose or provide sufficient material information about the contract. The salesman seemed to have lied on the part about refunding the deposit should the buyers decide not to buy the car.

Contract in Place   

For a contract to be valid and binding, there must be an offer, acceptance, mutuality of obligation, consideration and competence. For the current case, there exists a contract to purchase the car. The seller made the offer which the buyer accepted and confirmed by depositing $100. The buyers showed competence and sound mind by committing the deposit as a confirmation they want to buy the car. The deposit is what enticed the salesman to enter into contract with the buyers with the promise they will decide to buy the car. The deposit is binding as it prevented the salesman from selling the car to other potential buyers (Elliott, & Quinn, 2015). Therefore, the contract to purchase the car does exist. When the buyers decided they are longer interested in buying the car, they breached the agreement. In addition, the salesman never issued them a receipt indicating the deposit is refundable. The salesman too breached the terms of the contract by failing to refund the deposit. Under the mutual obligation, Laura and Jim have an absolute right to invalidate the contract since the deposit is refundable.

In my view, there exists contract to purchase the car. Laura and Jim accepted the offer to purchase. They promised to make the purchase and asked the car to be put on hold for a day. They paid a deposit as a commitment, which prevented the car being sold to other buyers. They decided they are not going to buy the car because they are not ready to spend $400 monthly as car payments. This is an external factor to which the seller is unaware of. The agreement to purchase the case was not contingent on this factor.

References

Altschuler, B. E., Sgroi, C. A., & Ryniker, M. R. (2016). Understanding law in a changing society. New York: Routledge.

Elliott, C. & Quinn, F. (2015). Contract law. Boston, Mass.: Pearson.

McKendrick, E. (2015). Contract law. London, U.K.: Palgrave.