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Did Jim and Laura Buy a Car?
According to Burton (2009), a contract exists when the following elements: the contracting parties, mutual promises, conditions of performance as well as execution, are present. An offer, consideration, and acceptance, as well as the contract’s mutuality, should exist for it to be legally binding. The closure of a deal is the most critical stage in a contract. In this case, the closure would involve the actual purchase of the blue car by Jim and Laura. Nonetheless, after considering their commitment to making a monthly payment of $400, Jim and Laura decided against the purchase. A contract only exists when there is a mutual accord for a smooth exchange of an asset. According to Burton (2009), the contracting parties should agree to the contractual terms, and this should be without concealed conditions in the agreement. For instance, Stan, the salesman argues that the cash deposit is refundable but alters his stance after Jim and Laura decide against purchasing the car.
Stan performs his duties by contacting potential customers with the aim of closing a deal, and when the deal fails to go through, he develops the notion the cash deposit was a sign of commitment. Nonetheless, there is no commitment; no documents were signed by both parties committing them to the contract. Instead, there was an agreement which each party could cancel at any time because nothing bound them. As the parties negotiated, the $100 cash deposit was proposed, and Jim and Laura were never informed that it would constitute the buying contract. According to Blum (2007), a contract binds parties based on the legal requirements. In the nonexistence of such binding elements like a receipt, Jim and Laura are entitled to make a contrary decision from the initial agreement to buy the car, and this entitlement demands that Stan should issue them with a refund of the $100 cash deposit.
We can do it today.
By taking into account the intention for a lawful relationship as a contract’s element, the agreement between the two parties lacked to that extent. This element is critical in business transactions because it could assist either party to seek legal enforcement of performance or compensation if the other party fails to perform its contractual obligations. In this case, there was nothing legally binding the parties and the argument that the cash deposit constituted the contract was null and void. In fact, either party had the option of withdrawing before the completion of the preliminary agreement. Hence, Stan cannot compel Jim and Laura to purchase the car since nothing proves the existence of a contract. Stan had just made a sales offer, and Jim and Laura had initially accepted to deposit some figure, and then make monthly payments though they later rescinded.
Stan lacked a binding time to limit the validity of his offer. He cannot argue that by later reaching out to Jim and Laura, there was a sign of acceptance from the buyers. Jim and Laura have the option of accepting the offer by committing to the monthly payments, and this would signify the existence of a purchase contract between the seller and the buyer (Burton, 2009). The salesman failed to acknowledge the acceptance of his offer; in fact, that could be the reason why no receipt was issued for the cash deposit. The receipt of the cash deposit would have rendered the contract binding sine the conditions articulated in the receipt would have bound Jim and Laura. The failure to receipt the deposit indicates mischief from the selling party because it is evident that he wanted to hold the buying party liable to the buying offer without declaring all the details concerning the deposit’s acceptance. It had been agreed that the deposit would be refunded and that provides the buyers with the power to demand a refund agreement because they decided against purchasing the car.
According to Blum (2007), fractional acceptance of an offer does not epitomize the existence of a valid contract. In this case, Jim and Laura made a fractional payment contrary to the total amount they had agreed. In essence, the buyers made a counter offer to the salesman, and it is upon them to revoke or keep the promise. As a result, the buying party still has the pleasure to decide against purchasing the case due to the inexistence of a valid contract. By informing Jim and Laura that the deposit constituted to the execution of their contractual obligations, Stan denies the genuine consent required from the buying party to close the purchase deal. As a result, Jim and Laura can proceed and seek legal services in the process of annulling the situation and demanding the refund of the deposit they made.
Nonetheless, the challenge which Jim and Laura are faced with is in the inexistence of a binding document proving the payment of the cash deposit. Both parties had initially agreed that the deposit was refundable. With the lack of a legal document to buttress the agreement, it becomes hard to establish since the play turns out to be Stan’s word against that of Jim and Laura. Since Stan has the money, he can choose to ignore the buyers’ plight or issue a refund. In this case, Jim and Laura stand the risk of losing it all because their deposit lacks anything supporting the issuance of a refund.
In conclusion, the law of contracts requires that a valid contract should be enforceable or unenforceable. In this case, there were no binding elements hence a valid contract was inexistent (Blum, 2007). By informing Stan that they no longer desire to buy the car, Jim and Laura legally terminate their early agreement. Due to the late decline of the sales offer by the buyers, the following lack of a common accord implies that the offer cannot be accepted, and even if a contract were in place, it would be a void contract.
- Blum, B. A. (2013). Contracts: Examples & explanations. New York: Wolters Kluwer Law & Business.
- Burton, S. J. (2009). Elements of contract interpretation. Oxford: Oxford University Press.