Running Head: ELEMENTS OF A CONTRACT
Contract Formation According to Beatty (2015) the elements of a legal contract are offer, acceptance and consideration. Additionally parties to a contract must have the intention to create a legally binding agreement, pay a price but is not necessarily money, have the legal capacity to enter an agreement and give consent. Evidence of duress, false representation of undue influence could make a contract null and void.
In this scenario, a contract to buy the automobile was formed when Jim and Laura deposited the $100 with the car dealer. According to the law a contract is formed when the other party accepts an offer by one party, through giving of consideration. In this case Jim and Laura accepted …show more content…
The consideration has to be anything of value, but it does not have to be money. Given the fact that consideration is there, the court will not question its adequacy, provided that it is of some value. However, consideration should not be illegal or impossible to perform.
In Carli vs Carbolic Smokeball, the court stated that parties to a contract need to draw a difference between offer and an invitation to treat. An offer will normally lead to a valid contract on acceptance, but an invitation to treat cannot be binding if it is just an invitation for offers.
From the facts of the case is stated after at the car dealership, Jim and Laura meet Stan Salesman. Stan showed them many vehicles which Jim and Laura had the chance to test-drive after test driving. Jim and Laura showed interest in the blue 4-door sedan precisely. They then agreed to give Stan Salesman a $100.00 deposit to hold the car for a day. However, the Salesman does not provide them with the receipt but guaranteed that the $100.00 is refundable. No legal documents were signed neither were they issued with a