Legal Issues in Business Dealings: The Case of Jim and Laura
Elements of a Legal Contract
According to Bayern (2015), the law of contract consists of two basic elements; offer and acceptance. An offer refers to a promise in exchange for performance by another party (Bayern, 2015). An offer can be revoked or terminated under certain conditions. Occasionally, an offer can be negotiated to create a counter-offer. An acceptance is a mutually binding agreement by the offeree to come into terms through giving a consideration in terms of cash or equivalent to seal the deal (Jones, 2017). On the other hand, a contract is an agreement between two or more involved parties that is subjective to law enforcement (Bayern, 2015). O’Gorman, (2013), adds a third element of a legal contract, which is a consideration. A consideration is an exchange of something that has value in relation to the performance or promise of performance by the other party (Jones, 2017). In contract law, a consideration is exchanged for another consideration. O’Gorman argues that a contract usually occurs in two forms, a written and verbal agreement. Nevertheless, a written agreement is more favorable than a verbal agreement for evidence and transparency purpose. Concerning the case of Jim and Laura, the contract took the form of verbal agreement as no receipt or documentation was made for the transaction. As a law enforcement entity, a contract must have seven basic characteristics comprising of an offer, acceptance, consideration, legality, capacity, consent and writing.
According to O’Gorman, (2013), a contract usually starts by an offer and is succeeded by an acceptance by all the participating partners. O’Gorman however, suggests that the meaning of the term offer in contracts should be changed as it overlaps with the characteristic of consideration. An offer brings the aspect of bargaining that normally leads to confusion between the offerer and the offeree (O’Gorman, 2013). Concerning the case of Jim and Laura, Stan, the car dealer offered the couple the chance to make a deposit of 100.00 dollars to hold the car for a day. As such, this created room for the couple to bargain for the car once they were dissatisfied with the blue sedan car. The aspect of legality in the case of Jim and Laura is seen in the sense that it is taking place at a legal and a recognized place. Capacity in contracts implies that individuals have the legal capability to enter into a contract (O’Gorman, 2012). There are several indicators that make a person eligible to enter into a contract such as age and state of mind. In this scenario, it is anonymous that all the parties involved are grown-ups and of legitimate. Consent, on the other hand, refers to the aspect of understanding the parties in relation to the proposed contract (Jones, 2017). It represents the fact that the parties involved voluntarily gets into the contract without coercion. Besides, in this case, there was no written document which is part of the modern legal contract.
Dilemma on Existence of a Contract
Based on the above characteristics of a contract, there was no contract and Jim and Laura did not purchase the car. The contract, in this case, looks unenforceable since it lacks evidence of the agreement between the couple and Stan. Besides, making a down payment does not necessarily imply that one can end up purchasing an item despite claims from the seller that one cannot breach the deal. For example, allegations from Stan that the couple had to purchase the car on the basis of paying a holding deposit do not have any legal evidence that they had entered into a contract. Further, it is evident in this scenario that, no receipt is issued to the couple or legal document indicating the type of agreement between the two parties. In many countries, the law requires the parties intending to engage into a contract to draft in writing that they have mutually confirmed with the terms and conditions of the contract before putting it into action (Jones, 2017). Lack of these documents makes the situation worse as the salesman makes a demand that the couple has to purchase the automobile which they do not like. Consequently, this makes it necessary for them to go looking for a lawyer to seek justice and fairness.
Facts supporting non existence of a contract
In this scenario, Stan, the car dealer, did not give the couple a clear specification of the type of contract they were engaging. He ought to have made it clear if the 100.00 dollars was to mean holding a deposit or purchase deposit. As such, the couple went along with the car knowing the 100.00 dollars was for holding deposit which is refundable once they were not satisfied with the car. Besides, for transactions that involve a large amount of money, the law requires those transactions to be jotted down in a paper (Jones, 2017). However, this legal requirement is not manifested in this scenario, and assumedly the total cost of purchasing the vehicle would be over 500 dollars. Besides, the scenario does not present any incidence where the receipt for the deposit was made which is very critical for business transactions. Based on the above allegations, Jim and Laura should seek the assistance of a lawyer for justice and fairness.
References
Bayern, S. J. (January 01, 2015). Offer and Acceptance in Modern Contract Law: A Needless Concept. California Law Review, 103(1), 67-102.
Jones, L. (2017). Introduction to business law. Oxford: Oxford University press.
O’Gorman, P.D. (2013). Redefining offer in contract law. Mississippi Law Journal, 82(6). 1049-1096.
