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Sample Paper: Did Jim and Laura Buy a Car?

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Sample Paper - Did Jim and Laura Buy a Car


Based on the case, Jim and Laura were the buyers. Stan was the salesman. As far as the contract is concerned, the case encompasses several essential elements. Assessment of these elements is necessary to provide a solution based on the understanding of whether the parties involved had a contract or not. There are different dimensions when looking at the case. At some point, the agreement can be said to exhibit all the essentials of a contract. On the other hand, the deal is portrayed to be deficient in some necessary components needed for its consideration as a contract. Therefore, the elements of contracts will be evaluated to determine the validity of the agreement between the two parties.


People enter contracts in their daily lives. It involves aspects such as business transactions or in the exchange of goods and services. A contract can, therefore, be referred to as any form of agreement where people will reach a consensus to create an obligation that warrants the participation of the law and its application when and where it is necessary. A contract is legally recognized or be accepted when in two forms, whether written or verbal. A contract is marked by the existence of certain elements that portray it to be valid and binding to the parties that have entered it.

The elements are essential since they display the ability and willingness of an individual to agree with another party. It makes one aware of the outcomes of the bargain regarding the conclusion that will be agreed upon by all of them. About Jim and Laura, it is essential to determine whether the parties were in a contractual agreement. In this case, there was an offer placed for consideration. It is evident when the salesman decided to give them more time to carry out a driving test. The two agreed to the offer. Subsequently, they left some cash to the salesman in a bid to purchase the car.

Elements of a Contract

An Offer

An offer is an ability and willingness shown by the two or more parties to enter into a contract. An offer, in most cases, is validated through bargaining between those who want to contract (Altschuler, Sgroi, & Ryniker, 2016). The bargain, in this case, is made to convince each other and reach a conclusion. For the above instance, an offer is identified when they accepted what the salesman’s terms of sales


Acceptance in a contract refers to the consensus that has been reached by the two parties (Altschuler, Sgroi & Ryniker, 2016). It reflects their participation in the transaction in a bid to make the contract binding. It implies that the buyer has to agree to the terms and conditions of the offeree. The above warrants that they clearly understand and agree to the contract by giving his or her consent. The moment the buyer agrees to the provisions of the agreement, no alteration of any part of the contract is possible since such an effort becomes a breach; therefore, any modification will become meaningless.

In the case, Stan confirms that ones he is issued with a hundred dollars as a deposit for the car, it will be refunded in case Jim and Laura are no longer interested with the purchase of the car. They both accept the offer, and Jim and Laura deposit the money. On returning the next day, Stan fails to honor the verbal agreement; therefore, granting the two to file a case against him for breach of contract (Nysten et al., 2010, p.465). Additionally, it can be said that there was no binding contract between the two because the two changed their minds of purchasing the car; therefore, they did not accept the agreement.

Legal Capacity

Legal capacity means that the contracting individuals have to be of good health in terms of sanity at the time of entering into a contract. It is because a mentally disabled person might make wrong decisions rendering the contract invalid. For our case, both Jim and Laura and the salesman Stan are of sound minds; hence, they made quality judgment and decisions regarding the transaction; therefore, making the contract to be valid. The parties new what they were both doing and what they wanted to be done. Neither were the participants of the agreement minors to cause problems in court.

Mutuality of Obligation

The above refers to the uniform agreement between the contracting parties (Altschuler, Sgroi & Ryniker, 2016). The parties have to mutually understand each other and express their understanding of each other for confirmation. The parties must be on the same page as far as the terms and conditions are concerned in the same manner and at the same time. There was an offer and acceptance to either of the parties when they reached the dealer. They communicated to each other concerning their anticipations, their capability, and what they wanted. As such, the salesman took the deposit after Jim and Laura had taken the care for a test drive. They had also agreed to the $400 cost of purchase. Therefore, the parties were committed to each other’s obligations. However, there was no understanding of the fulfillment of the commitments that led to a conflict when the buyers wanted the deposit back. Stan does not refund the deposit that had been made by Jim and Laura when they decided not to buy the vehicle.


A consideration is a benefit that each party gets in the contract as a result of making a profit from the outcome of the agreement (Altschuler, Sgroi & Ryniker, 2016). For our case, the considerations made were a hundred dollars as part of the four hundred dollars given as a deposit to the salesman in a bid for Jim and Laura to secure the car. The two had parted with the money to benefit the salesman. However, the terms of the promise to warrant a legal consideration on the part of the salesman were quite unclear since he did not disclose the intentions that he attached to the deposit (Savelyev, 2017 p.126). The above is made worse by the fact that the salesman does not advance a receipt to the two, but he terms the deposit as refundable.


Competence refers to the state of the contracting parties concerning the rules and regulations made the contract. Each party has to state his requirements and capabilities (Altschuler, Sgroi & Ryniker, 2016). The statement of the contract should also be in a manner that is understood by the other party. The other party should also be in a good state of mental sanity to understand the requirements of the other party. Based on the available information, it can be concluded that both parties were in the right mental status when entering into a contract.

All material information and facts have to be disclosed by each part regarding the agreement. Failure of the above will imply that either of the party is not competent. Stan, the salesman, can be considered not to have disclosed all relevant material facts information regarding the contract. Therefore, he was not honest when promising a refund, whereas he did not issue a receipt after a deposit was paid. On the other hand, Jim and Laura were responsible, particularly in fulfilling their obligations.

Contract in Place

The above element takes into consideration the existence of all the other aspects of a contract, as stipulated by the guidelines of the law to make the contract binding. As such, there should be a mutuality of obligation, acceptance, and an offer, among others. For our case, there existed a contract. From the start, we see the buyer looking for a seller to purchase a car. The buyer accepted the offer made by the dealer concerning the terms and conditions of the seller. The verbal agreement was sealed through the payment of a certain amount. However, on returning to take back their deposit as earlier agreed by both the parties, the salesman breaches the contract. He now wants them to buy the car by withholding the money that was to be refunded. Therefore, it implies that the contract was not binding.

Simplicity and Easy to Understand

Any agreement should clearly and explicitly state the rules, regulations, terms, and conditions that are to be considered by the parties agreeing to a contract. A complicated contract can make one fall out of the agreement. One’s misinterpretation of the information might also result in a breach of contract or a loss to either of the contracting parties. Jim and Laura’s contract was difficult to comprehend. Confusion arises on the hundred-dollar deposit that was made by Jim and Laura that necessitated the release of the car for a test drive. For Jim and Laura, a hundred dollars was for collateral to hold the vehicle during the test drive. On the other hand, the interpretation by Stan the salesman was that the hundred dollars were to form part of the deposit for the amount to be paid later. The above was brought about due to a lack of understanding and misinterpretation between the two parties.


In my perspective, there was no contract between the two parties that was worth binding. It is because of several reasons that can be identified in the scenario. To begin with, the buyers identified a dealer and found one with the car of their choice. The dealer gives them a chance to test drive the vehicle and provides the conditions to leave a deposit from which by the following day they would have reached a solution as to whether to buy the car or not. However, the dealer does not disclose all relevant material facts and information that are required to bind the contract. Such information includes the real price range of the car and the intention besides the deposit. The dealer does not also transact legally, whereby he does not advance a receipt to the two after payment of the hundred dollars’ deposit.

On the other hand, Jim and Laura might have failed to understand all the variables behind the deposit. They did not understand the intention of the salesman. By accepting the deposit, it implied that they would come the next day to purchase the car, since leaving the deposit prevented the salesman from selling the vehicle to other interested people. As such, their failure to buy the car on their return implied that the contract was not legally binding.

In the current times, people have trust issues-particularly in transactions of things that involve money because of blackmail and manipulations that have been reported. On an extreme point, we can consider the contract null and void basing our argument on the way the contract was conducted. As much as an agreement can be made verbally and adhered to, there was no witness to confirm the deal that, in this case, was also verbal and just made between the client and the dealer. Since there is nothing written to prove the agreement and its terms and conditions, it will be hard to prove that it was binding, particularly in the absence of the receipt to confirm the payment of a deposit. Therefore, the agreement can as well be rendered to be null.


Altschuler, B. E., Sgroi, C. A., & Ryniker, M. R. (2016). Understanding law in a changing society. New York: Routledge.

Nystén-Haarala, S., Lee, N., & Lehto, J. (2010). Flexibility in contract terms and contracting processes. International journal of managing projects in business3(3), 462-478.

Savelyev, A. (2017). Contract law 2.0: ‘Smart’contracts as the beginning of the end of classic contract law. Information & Communications Technology Law26(2), 116-134.

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