Elements of a Contract-Business Law

Companies, businesses do make deals with clients, especially during sales. When two or more parties agree upon something by agreeing to specific terms, they create a contract. A contract is legally binding consent between parties. To be legal, it must follow certain elements (Griffo et al., 2021). In the case of Jim and laura, they made a good decision of buying a new car through their contract did not fully follow all elements of a contract. Although a written document was vital when purchasing the vehicle to avoid unnecessary arguments later, both parties did not consider this. A good contract must abide by the law. It must follow the below elements to be legal.

Offer

Offer is a must-have element of a legal contract. It is the suggestion that a party makes to the other. Jim and Laura offered to the car dealership to buy a new car. However, an offer must show the specific reason as to why one is entering into a contract (Hansmann & Kraakman, 2017). Jim and Laura reasoned that the previous car was growing old and needed a new one to take them to and fro school and work.

Acceptance

When both parties agree on the offer proposed, a contract is made. In this scenario, there was a meeting of the minds between both parties. Jim and laura agreed with the car salesman to purchase the car and proceeded to make a deposit.

Legality

A contract is said to be legal if its objective is valid. In this case, it was lawful for the car dealership to sell the car and permitted jim and laura to purchase it.

Written document

A written document is just something written down using letters or symbols as proof of a contract. In the case of Jim and laura, there was no written document. This was necessary to avoid breach of contract by either of the parties later.

Consideration

This refers to the purpose or specific reason why both parties are making the contract. Jim and laura needed to benefit from the car, while the car salesman would help from the cash or the profits from the sales of the vehicle.

Existence of a Contract

Jim and Laura’s scenario had a contract. Since a contract is an agreement between two or more parties, it is evident that there was a sort of acceptance between both parties. The two did a test drive for the cars and agreed to take the blue 4-door sedan, which they loved. They later deposited $100 to secure the vehicle, which the salesman claimed could be reimbursed. After a day, the salesman called the two to confirm the car’s delivery. All these actions confirmed that there was a contract made. All the parties involved had a “meeting of the mind”, which denotes that they all mutually agreed on the terms and rules of the contract. The action of purchasing a new car was a wise decision; however, Jim and laura failed to include written documents in their agreement. It was also unwise for them for failing to ask for a receipt of the money they paid as a deposit. According to the doctrine of the law, a contract that lasts for more than a year must have a written document.

Examples of the existence of a Contract

Offer  

Jim and laura visited the car dealership and proposed the new car they demanded. The suggestion was an offer that they made to the salesman, who agreed and showed them several vehicles.

Agreement

It’s evident that Jim and laura had an agreement with the car salesman on purchasing the car. Both parties agreed, although no written documents were included. Jim and laura made an offer to the car salesman, which the salesman accepted. An agreement was reached when all parties mutually accepted the offer.

Legality

A contract is only implemented in a court of law if only it is legal and all parties legally abide by the rules of that contract. All the parties involved must be of sound mind, over 18 years of age and in written formats, especially those dealing with real estate property (Raskin, 2016). All parties were of sound mind and the period mentioned above. While Purchasing a car is one of the long-term deals that need to be signed for it to be legal,  Jim and laura failed to ask for a signed document that would act as proof of their purchase in case of contract breach. Nevertheless, they deposited $100 without a receipt. The contract was made but did not adhere to the guidelines of a legal agreement.

Written document

Jim and lauras’ contract was a long term contract that dealt with real estate property. This requires both parties to sign documents; however, in this scenario, there was no single document that would act as proof of the deal and payment of the deposit. Jim and laura could not defend themselves in a court of the law even if the car salesman duped them.

I would advise Jim and laura to be very cautious when making long-term deals. Although this is just a simple contract, it must follow or abide by the law for it to be enforced. In this case, a written document that will act as evidence of the contract made was very vital.

References

Griffo, C., Almeida, J., Guizzardi, G., & Nardi, J. (2021). Service contract modelling in Enterprise Architecture: An ontology-based approach. Information Systems, 101, 101454. https://doi.org/10.1016/j.is.2019.101454

Hansmann, H., & Kraakman, R. (2017). The end of history for corporate law (pp. 49-78). Gower.

Raskin, M. (2016). The law and legality of smart contracts. Geo. L. Tech. Rev., 1, 305.