Posted: December 6th, 2022

Jim and Laura’s act of making a $100 deposit

Business Law
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. 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.

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.

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 and the material covered in the lessons. In your paper, be sure to address the following:

1. Define the elements of a legal contract using examples from the scenario where applicable.
2. Decide whether or not there was a contract for the purchase of the automobile.
3. Identify the facts from the scenario which support your decision on whether or not a contract exists for the purchase of the automobile.
4. 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. 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?

Business Law
Jim and Laura’s act of making a $100 deposit to the Stan Salesman qualifies the contract as valid due to the presence of a valid contract’s basic elements. In this scenario, Jim and Laura visited a local car dealership to buy a new car that they would jointly use. Jim and Laura agree to give the salesman a refundable $100 deposit to hold the car until they made payment arrangements. A verbal agreement signed no documents were made. Later on, Jim and Laura made a decision not to buy the car. Stan argued that the two were in breach of the contract since the $100given was part of the deposit to buy the car. Jim and Laura feel that they are duped. The element of a valid and binding contract is met to purchase the car; thus, it can be enforced since one party has breached the contract.
Elements of a legal contract form the scenario
The scenario meets different elements of a contract, thus making the contract valid and binding. In this regard, there is an offer that is extended at the beginning of the contract. The offer invites public members to buy and sell contracts for goods and services (Yonjan, 2019). In this regard, establishing a local dealership is an offer to engage or enter into a contract with different parties. Therefore, the car dealership’s presence implies that the business is ready and present to make a contract with people.
Jim and Laura approached the local car dealership through the salesman presents the acceptance of the offer to buy cars and engage in contracts. Jim and Laura can accept or reject different car deals based on the available terms and conditions (Yonjan, 2019). The acceptance can be made verbally or through mail or email. In this case, Jim and Laura make a verbal acceptance in the salesman’s presence and go ahead to make a $100 deposit for the car of their choice.
There is a mutual agreement element invalid business contracts. Mutual agreements refer to a meeting of minds between the parties involved in the contract. The parties to the contract agree to enter into different obligations as per the contract (Chandler and Brown, 2015). The salesman and the purchasing parties agree on the car to be purchased, and a deposit is made in reference to the car, thus satisfying the mutual agreement element.
There is the element of consideration, meaning that something of value must be exchanged to attain a valid legal agreement. The things considered to have value include products, protection, property, and services offered in exchange for money. In this case, the item of consideration to be exchanged is a car, making the contract valid.
The different parties to a contract must have the capacity to meet the terms, conditions, and obligations within the contract to make the contract valid. The parties involved must have the legal capacity to engage in a contract. The contract can only be entered by parties that have attained the legal age to ensure that rational and reasonable decisions and dealings are made (Ricks, 2012). The parties must have their right mind before engaging in a contract to ensure that the parties involved do not make decisions when they are under the influence of mind-altering substances. In this case, Jim and Laura and the salesman representing the car dealership have the legal capacity to enter into a contract, thus making the contract valid.
The contracts must be made within the legal constraints or standards to make them valid and enforceable. The contract cannot be made in reference to the sale or trade of illegal products or services. The contracts need to have legal intentions to ensure that the contract’s results must be completely legal (Ontiveros, 2018). The establishment of business activities and operations needs to be legal and in compliance with different laws and regulations. In this scenario, the establishment and existence of the local car dealership imply that the business was legally established and was in compliance with different regulations. Additionally, the contract’s product is legal, thus advancing the legality of the contract and making it valid and enforceable.
2. Decide whether or not there was a contract for the purchase of the automobile.
There was a contract for the automobile’s purchase despite the lack of documents certifying the presence of a contract. In this regard, the contract was entered verbally between Jim, Laura, and Stan salesman representing the local car dealership (Srivastava, 2020). Additionally, part of the contract was made by Jim and Laura, making a partial payment of $100 for the chosen car. Additionally, the different elements of a valid contract were attained, thus ascertaining a contract’s presence. The contract’s element was offer and acceptance, contract consideration, the legality of the contract, legal capacity between the parties involved, and the legality of the products for sale (automobile).

References
Srivastava, A. (2020). Nature and Formation of Contract. In Modern Law of International Trade (pp. 81-107). Springer, Singapore.
Chandler, A., & Brown, I. (2015). Law of contract. Oxford University Press.
Yonjan, Y. K. (2019). An Analysis on Major Elements of a Valid Contract Under Muluki Civil Code, 2074. Available at SSRN 3437233.
Ricks, V. (2012). Assent is not an Element of Contract Formation. U. Kan. L. Rev., 61, 591.
Ontiveros, M. L. (2018). Liquidated Damages in Guest Worker Contracts: Involuntary Servitude, Debt Peonage or Valid Contract Clause. Nev. LJ, 19, 413.

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