A contract is an agreement between two parties to engage in an activity together or perform a commercial transaction jointly. The contract is enforceable by the law if it has the elements that comprise a legal agreement and if the agreement is breached by either party, legal remedies are to be applied. The remedy could be financial compensation or the defaulting party may be required to do the initial action that was to be executed in the agreement. Contracts can be written or be verbal but all are legally binding.In forming a contract there are various necessities that must be met, this are: “existence of an offer, acceptance, ability to contract, consideration, legal purpose, legality of form, intention to create legal relations, consent to contract and vitiating factors such as Mistates, undue influence, misrepresentation and duress” (Barnett,2003).In this case the following elements are present: the offer, acceptance, capacity to contract, consideration, intention to create legal relations and the consent to contract. It is evident that there are some components that are missing in the case which are the source of the dispute.
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This case is binding; an agreement does not happen until both parties are informed of the offer and the acceptance hence before that happens there is no contract yet. In this case the mode of communication was the mail box and according to the postal rule under contract law an acceptance is considered effective once the mail has been appropriately mailed by putting it in the mailbox or by giving it to an employee of the post office, Leo did that even though Clarice has not received it yet.As said earlier for an agreement to made there must be a valid offer and a valid acceptance. A valid offer must be authentic, must be communicated and must have the terms and conditions. Offers must not be taken as invitation to treat or the vice versa because invitation to treat are promises made mostly in promotions and in most cases they are not legally binding. Clarice made a genuine offer to Leo stating the consideration and communicated it to him. The offer could be in writing, verbal or unilateral which means performing an act to show acceptance.
An acceptance is the consent to contract and is also communicated in similar ways as the offer and it can only be accepted by the offeree and silence is no acceptance. Leo sent an acceptance through mail to Clarice’s home in Beverly Hills, CA on March 12, 2008; hence he performed his duty in the agreement. A consideration is the promise, in most cases it is money but it varies with the type of contract being made. In this case it is money ($25,995.00); it must be sufficient and reasonable. Leo made an acceptance and hence that makes the agreement legally binding according the postal rule, so Clarice is obligated to sell the Corvette Stingray to Leo and if she does not then legal remedies are to be applied (McKendrick, 2005).
Below is the draft of the contract she is supposed to sign to complete the agreement.
I Clarice agree to sell my 1965 Corvette Stingray for $25,995.00, plus all title transfer fees.” To Leonardo de Capo in respect to the offer I made on February 13, 2008.
“I will agree to sell my 1965 Corvette Stingray for $25,995.00, plus all title transfer fees.”Clarice
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Leonardo de capo………………………………
Barnett, R. E. (2003) Contracts.New Jersey: Aspen Publishers.
McKendrick, E. (2005). Contract Law – Text, Cases and Materials.NC: Oxford University Press.