Table of Contents
Elements of contract
The main reason of having a contract is to develop a pact that the entities have made and to repair their privileges and obligations in harmony with that treaty. The court of law must impose a valid treaty as it is made, unless there are evidences that block its implementation. The main components of a contract encompass a proposal, recognition, capable entities that possess the lawful capability to treaty, legal subject and consideration among others. A proposal is an assurance that is, by its standings, provisional upon a deed, self-control, or return assurance being provided in interchange for the undertaking or its enactment (Neil, 2015). It is an illustration of readiness to come in a negotiation established to enable another entity is vindicated in comprehending that his or her agreement to the negotiation is accepted and will come to an end. Any proposal has to have a statement of current intention to enter a treaty. For instance, in the case study, there was no offer or proposal between Jim and Laura and Stan the salesman since there was no statement or document signed as evidence of an agreement. Despite the fact that Jim and Laura gave out a hundred dollar as a deposit, the salesman did not provide a receipt to show that an agreement had been made concerning the purchase of the car.
Another component includes acceptance, which is the manifestation of an agreement to its standings. It has to be established by the offeree in a way demanded or authorized by the offeror. Therefore, recognition is legal merely if the offeree acknowledges the proposal and the offeree establishes a purpose to receive. It is also legal if the recognition is clear and categorical, and it is established according to the positions of the proposal. From the case study, this element was not available since there was no clear and categorical development made between the entities. Everything was done verbally with no document to show that an agreement had been made regarding the purchase of the car. Another component is agreements to agree and it is mostly used in organizations that need long-lasting treaties so that to guarantee a continuous basis of provisions and channel of invention (Neil, 2015). Shared exhibitions of agreement that is adequate to develop a compulsory contract are not depressed of functional influence by the sheer facts that the entities agree to make a written duplicate of their contract. It is also important to note that in this component, a contract can be established between two even if there is no written document that is signed as long as there is exchange of assurances of a certain enactment and agree upon all imperative standards. However, in case the displays of intention are incomplete, a case in point is that a material term has been left to further mediation, the entities have no contract. For instance, in the case study, at first the two entities had established a contract just through their verbal communication. Nevertheless, the contract became unlawful because Jim and Laura left some cash to the salesman as a deposit to hold the car for a day.
Furthermore, competent entities as another component in forming a contract involves a deal carried out between individuals who have the legal ability to become accountable for obligations under the bond except he or she is a baby, unreasonable or drunk. Subject matter as another element of contract demonstrates that any task may be the subject of a deal, provided that it is not proscribed by law. An individual may not lawfully contract regarding a right that he or she does not have. For instance, a producer of a certain product that does not hold a clear ownership of the property may not guarantee to carry it without hindrances. Additionally, there must be a treaty amid the entities, or shared agreement, for a deal to be established. The entities should have a mutual intent of a meeting of thoughts on the standards of the contract and must pledge to similar bargain (Harriman, 2009). This element was shown in the case study when the two entities had a mutual agreement in their transaction to an extent that the buyers ended up making a deposit for the car.
From the above information, it is clear that there was no contract for the purchase of the automobile. For instance, despite the fact that Jim and Laura made a deposit of a hundred dollars as a way to show their seriousness of getting the car, the salesman did not give them any written document to seal their contract. It has been noted that for a contract to exist, a statement or a written document in form of a receipt has to be developed in order for it to be an offer. Therefore, because of lack of an offer from the start, the two parties had no contract and thus the car was not purchased by Jim and Laura.
- Harriman, E. (2009). Elements of the law of contracts. Detroit, MI: Press.
- Neil, A. (2015). Contract law. New York, NY: Routledge.