Elements of a Legal Contract.

Touchstone: Did Jim and Laura Buy a Car? SCENARIO: Jim and Laura Buyer visit the local car dealership because they are interested in buying a new car. The car they currently have is aging and is starting to have mechanical problems. Jim and Laura would share the new car, and use it to go back and forth to work and school. Before going to the dealership, Jim and Laura decide that they can only afford $400.00 a month in car payments. Once at the car dealership, Jim and Laura meet Stan Salesman.Elements of a Legal Contract.

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Stan shows them several vehicles and Jim and Laura test-drive several of the cars. Jim and Laura particularly like the blue 4-door sedan. Therefore, they agree to give Stan Salesman a $100.00 deposit to hold the car for a day. Stan Salesman does not give them the receipt but guarantees that the $100.00 is refundable. No documents were signed.Elements of a Legal Contract. The next day, Stan Salesman calls Jim and Laura to ask them when they would like to take delivery of the car. Jim and Laura, on the way home from the dealership, decided that they were not going to buy the car because they did not want to spend that money each month. Therefore, Jim and Laura tell Stan Salesman that they have decided not to buy the car and request their $100.00 deposit back. Stan insists that the $100.00 was a deposit on the car and was meant to be part of the contract to buy the car. Stan is very persistent and insistent that Jim and Laura have contracted to buy the car; therefore, the $100.00 will be applied to the purchase price of the car. Jim and Laura are shocked and angry as not only do they not want to spend the money, but now feel as though they are being duped by Stan Salesman.Elements of a Legal Contract. Jim and Laura have an appointment to see a lawyer in a few days, but know you are a student taking a business law class and come to you for advice. They are very frazzled, and understandably upset that they may have just purchased a car. Since you have been taking business law, you have read and understand the elements of a contract and the defenses to a contract. Therefore, although you are not a lawyer, you provide some basic advice from what you’ve learned in your business law class. ASSIGNMENT: In three to five (3-5) pages, advise Jim and Laura based on the above facts as presented, the material provided in the text, and material covered in the lecture.Elements of a Legal Contract. In your paper, be sure to address the following: Define the elements of a legal contract using examples from the scenario where applicable. Decide whether or not there was a contract for the purchase of the automobile. Identify the facts from the scenario which support your decision on whether or not a contract exists for the purchase of the automobile. Use at least two (2) quality academic resources in this assignment. Note: Wikipedia and other websites do not qualify as quality academic resources. In order to foster learning and growth, all essays you submit must be newly written specifically for this course. Any recycled work will be sent back with a 0, and you will be given one attempt to redo the touchstone. A. Assignment Guidelines DIRECTIONS: Refer to the list below throughout the writing process.Elements of a Legal Contract. Do not submit your Touchstone until it meets these guidelines. 1. Understanding of Contract Law ❒ Have you defined the elements of a legal contract? ❒ Have you used examples from the scenario to illustrate these elements? 2. Case Judgment and Support ❒ Have you provided a judgment on the existence of a contract in this scenario? ❒ Have you used specific examples from the scenario to defend your position? 3. Research ❒ Have you referenced at least two academic sources in your essay? ❒ Have you explained how each source relates to and supports your judgment on the case?Elements of a Legal Contract.

            Contracts have four major elements that include an offer, an acceptance, consideration, which is money in most cases, and the intention to enter a legal agreement or relationship. The contracts can be verbal or written. However, the most important aspect is that they contain these four elements to be fully considered legally binding contracts (Charman, 2016).Elements of a Legal Contract. The offer refers to the service or goods that are on sale, or that the other party receives in the agreement. In Jim and Laura’s case, the offer is to purchase the car. However, the couple paid $100 in deposit, to test drive the car and make their decision later. This agreement was verbal, and the Stan Salesman guarantees that the $100 is refundable to the couple. In this case, the offer is to purchase the car, but since the $100 deposit is refundable, Jim and Laura may decline the offer and nullify the contract. Acceptance of the offer is critical. Therefore, since the couple declines the offer the next day and seeks a refund for their deposit, the contract does not exist. Additionally, according to their agreement, the money was refundable, which means that the customers were free to decline the offer.Elements of a Legal Contract.

Another element of a contract is consideration. In a contract, consideration refers to the items or services given in exchange for the money or another item (Charman, 2016). In this case, the consideration was the car, after purchase, where the $100 was considered a deposit, and intention to purchase the car. The intention to purchase the vehicle is a critical element of a contract. In this case, Jim and Laura intended to purchase the car, which qualifies their interaction as a contract.Elements of a Legal Contract.

The Contract

            Overall, there was no contract to purchase the car for various reasons. Firstly, the Salesman told the couple that the $100 in deposit was refundable. The reason for the deposit was to purchase the car and to hold it for them. However, the fact that the Salesman tells the couple that the deposit is refundable automatically alludes to the idea that at this point, there is no contract because the customers can revoke their decision or change their mind regarding buying the car. Additionally, for the agreement to be considered a full contract, the couple must make additional payments to clear the full price for the blue sedan. The couple declined to do this; therefore, there is no legally binding contract between the two parties.Elements of a Legal Contract.

Another reason why there is no legally binding contract, in this case, is that there was a partial acceptance of the offer from both parties. Partial acceptance to an offer disqualifies it as a contract. The acceptance only becomes legally binding when it is full and following the terms provided in the contract. In this case, the couple only paid a deposit, which is partial acceptance for both parties. Now, declining to proceed with the contract was well within the couple’s rights. The $100 deposit is a counteroffer that the customers are rightfully allowed to accept or decline. In this case, it appears that Stan Salesman coerced the couple to enter a contract with him without fully disclosing all details.Elements of a Legal Contract. Using the $100 as bait into a contractual agreement is sinister and unethical of Stan Salesman. Therefore, Stan misleads the couple into purchasing the vehicle without them fully understanding the terms of their agreement. Misleading someone into a contract makes it invalid because the other party is not fully aware of the contractual terms.

Jim and Laura should have asked for a binding agreement, such as a receipt to show that the $100 was refundable. The Salesman has limited grounds to require the couple to honor their agreement because there was no receipt to show proof of payment. As mentioned before, verbal contracts exist but become challenging to execute because of the ease of breach associated with the lack of written evidence of an agreement (Davies, 2018). This fact also makes it possible for the Salesman to claim that they agreed, in a coercive manner because he failed to issue them with a receipt. The receipt should state the terms of the contract by indicating if the funds are refundable. Therefore, the fact that there is no legally binding contract, and no presence of receipt for the $100 means that Salesman has no right to claim that the couple proceeds to pay the full amount of the vehicle, and the couple has the right to ask for a refund since they will not purchase the car. The couple should always be careful to ensure that they receive a receipt for all their transactions to limit the loopholes that allow the other party to change the terms of a contract or swindle them money that should be refunded.Elements of a Legal Contract.

Another reason why the couple should not consider the agreement as a contract is that there was no documentation, which specified the terms of the agreement. A contract should have clear terms defined, which include the offer, consideration, and acceptance (McKendrick, 2020). The offer would be the price of the car, the consideration would be the car, and the acceptance would be the clients’ signature. A receipt would also be indicative of a contract, and the intention of the couple to enter into an agreement with the seller, that they would deposit $100 and then later pay the car’s full amount. However, these terms are not available; therefore, there is no contract between the two parties. Still, the sales representative should refund the $100 because it was stated in the verbal agreement that it was refundable. The salesperson should honor that verbal contract.Elements of a Legal Contract.

The law of contracts posits that all contracts should be enforceable when they have met the requirements of a contract, which means that the agreement should have the four mentioned elements. In this case, Jim and Laura have not entered into a contract with Stan Salesman, who tries to coerce them into a contract by demanding that they pay the remainder of the amount to complete the car payments. His sinister motives to coerce the clients into purchasing the car are unethical, considering he fails to provide them with a receipt. A receipt shows proof of payment, which, therefore, means that he may refuse with their deposit, and it would be challenging for the couple to take legal action because they lack proof of payment. The couple has the right to return the car and obtain their deposit because they were not in any contractual agreement with the salesperson. The four elements must be in place for the agreement to be a contract, and in this case, there is no acceptance from the couple, hence, no contract.Elements of a Legal Contract.