Introduction
The law of contract is a fundamental concept enabling the freedom of individuals in the civilian society to help them structure the mutual relations in various legislative aspects regarding one’s goals, preferences, and motives. The contract law establishes the framework wherein parties can determine their rights, responsibilities, and powers towards each other. Therefore, it is crucial to understand the underlying legal concerns in terms of contract formation and execution to adopt a specific approach to address and avoid the associated problems and disagreements.
Elements of a Legal Contract
A legal contract is inherent to the law of obligations and, for this reason, defines when a contractual obligation emerges. In addition, the law contract identifies the core requirements on both sides of the parties and, thus, sets the particular limits to their freedom of action and decisions. According to Arvind (2019), the contract should be analyzed and understood from two contrasting viewpoints, including “legal and commercial” (p. 57). From the commercial perspective, a legal contract engages the parties that generate a shared understanding of their transaction and the appropriate rules system to govern such transactions. The legal view implies that the contract is established from an entirely objective point and involves the adoption of an objective approach.
A valid contract must comply with the essential four requirements developed for all parties involved in the process. The first element is an agreement, which is attained through a process of offer and acceptance. The second element of a law contract includes consideration as an object of value that is given up by each party. As a third element, the contract must involve the competent parties obtaining the legal and mental aptitude to enter into binding contracts. Finally, the fourth critical element of a legal contract implies its lawful purpose representing a law-oriented agreement (Arvind, 2019). However, communication plays a pivotal role in law contract enforcement since the acceptance must be communicated to the offeror. To be more specific, acceptance is considered valid from the moment it is communicated to the offeror and is legally effective after it is verbally informed. With that said, offer, acceptance, and formation are the key vehicles that determine the legislative power of the contract.
Scenario Analysis
In the proposed case scenario, Jim and Laura Buyer are the visitors to the local car dealership interested in buying a new car. Throughout strictly verbal negotiations, Buyers leave a $100.00 deposit to hold the car for a day. However, as they decide to hold the process of purchasing a new car, they face the unreasonable conflict with Stan Salesman, who refuses to return the deposit under the pretext that it was considered a part of the contract to buy the car. Regarding the fact that Stan Salesman did not provide any documented receipt and there were no signed documents, this case excludes any existing contract for the automobile’s purchase. Stan guaranteed that the $100.00 is refundable, which gives the Buyers the right to demand the deposit back. However, there are also no documents that prove the guarantee from the Salesman concerning the deposit refund.
Supporting Facts
Communication is a beneficial tool for the offeror and, thus, the act of acceptance can be regarded as the communication of the information. However, property and guarantee contracts are required to be evidenced in the written format, which was not followed by the Salesman in the case scenario. The written documents also require the signatures of both parties. As described by Poole (2016), it is a general principle for both parties to make a joint agreement and ensure that the terms are entirely certain to both sides to be enforced. Even though the situation includes the mutual verbal agreement between both parties, the Buyers and Salesman, there was no supporting document to denote the fact of agreement and the declared conditions.
Nevertheless, both sides lack the evidence to prove that either side is right or wrong due to the lack of contract law. The analyzed scenario involves some of the critical elements of a legal contract, such as an agreement (including the Salesman’s offer of a car and the Buyers’ acceptance to think about the proposed option). Also, the case includes the second element, consideration, which the Salesman presented as the condition to leave a $100.00 deposit to hold the car for a day so that the couple can make an informed decision about the purchase. However, this situation excludes any evident legal power, such as the written document, to support each of the parties involved in the car dealership process.
Conclusion
This essay examines the key elements of a legal contract based on the case study with a car dealership and the purchase of a new car. The contract is defined as the most pragmatic area of law and consists of the particular rules and standards endowed with the legislative power. The contract is valid when it meets the law contract’s core elements agreed between the parties involved. Based on the analyzed scenario, the poorly negotiated deal and the lack of written agreement jeopardize the legal protection of one of the sides. Salesman’s oral guarantee does not serve as the contract of guarantee that performs the promise or discharges the liability and can be prohibited by the statute of frauds.
References
Arvind, T. T. (2019). Contract law. Oxford University Press.
Poole, J. (2016). Textbook on contract law. Oxford University Press.