Essay on Elements of Business Law

A contract is usually termed as an understanding or agreement between two parties which is usually voluntary and whose terms are enforceable by law hence legally binding. A contract is pegged on some elements that should be observed at all times if the contract is to remain lawful. Without any one of these elements then an agreement falls short of being termed as a contract that is law enforceable. For it to be legally binding, it must have an offer, acceptance, consideration, and consequences with a legal intention (Macaulay, 1963).

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An offer refers to a promise granted by one part to another on condition that the other party is going to reciprocate the promise or a performance of the promise offered. It involves the invitation of one party to enter into a bargain with the other party through demonstration of interest by both parties. In this case, the parties involved are the buyers; Jim and Laura and the seller/salesperson; Stan. Jim and Laura receive an invitation from Stan to enter into a bargain of purchasing a car with him. An offer is usually characterized by a statement of the intention to enter into the contract and identification of and communication to the potential party being offered a promise, two elements without which the offer doesn't exist (Friedman, 2011).

The acceptance element of a contract points out to the assent of the contact's terms and conditions and the intention by the party offered the promise to conform to all that pertains the agreement as stipulated by the one offering the promise (Friedman, 2011). It is defined by an unequivocal acceptance by the offered. Though no written document was signed with effect to the agreement that Jim and Laura had with Stan, they were still able to exhibit some form of acceptance by unanimously coming into an understanding that they pay $100 as the deposit for them to be able to hold the car for a day.

In a bilateral agreement, a consideration depicts a legal detriment that a party being offered a promise stands to suffer on request of the detriment by the promising party (Macaulay, 1963). Jim and Laura offered a promise to buy the car after test-driving it for a day only to change their minds the following day. The promise of purchase of the car serves as a consideration for which the seller, Stan, stands to suffer if the intent by Jim and Laura to buy the car does not hold.

An intention that bears legal consequences applies to both of the two parties in case the agreed upon terms and conditions are breached, or an intention to breach the understanding by either of the parties is foreseeable (August et al. 2009). Legal consequences intent is usually put in writing with or without the presence of a witness or witnesses and stands to be used as evidence for the agreement entered into.

Another paramount element that defines the legal standing of a given contract is the statute of frauds. The statute of frauds states that there'll be no maintenance of a suit or action on an agreement unless the matter is duly presented in a memorandum or note. The terms and conditions should be in writing together with the identities of the parties involved and bearing signatures of the parties signifying their obligation to the contract (August et al. 2009).

As far as the elements of a legally binding contract defined above exist, there was no contract in the purchase of the automobile. For a contract to exist, all the elements of a contract essential for its validity should adhere to the latter. The agreement between Jim and Laura and the salesman, Stan, lacked the statute of frauds as there were no documents signed or receipts issued whatsoever. Without a written and signed agreement, there was no legal consequence that either party stood to face. This is because the agreement was made by mouth and although there was an offer, acceptance, and consideration, there was no physical proof that the two parties entered an agreement and came to unanimously agreed upon conclusion. Filing for a suit by the complainant, Jim, and Laura, would not be an advisable option to consider as there will be no evidence to be tabled that will prove beyond any reasonable doubt that they are indeed the victims and not Stan.

It would also be prudent for Jim and Laura not to proceed with the case or solve the case out of court if need be as Stan could use the whole situation to his advantage. Since Jim and Laura indicated an intention to purchase the automobile, Stan could appear as the actual victim standing to suffer losses that are as a result of the withdrawal. This could mean a compensation for Stan from Jim and Laura for failing to honor their intent due to losses that Stan is likely to face.

The whole scenario leaves Jim and Laura with little if any options to consider as far as suing Stan are concerned. The best course of action to take would thus be to try and amicably sought out the issue out of court to avoid impending losses.

References

August, R., Mayer, D., & Bixby, M. (2009). International Business Law: text, cases, and readings. Pearson education.

Friedman, L. M. (2011). Contract law in America: a social and economic case study. Quid Pro Books.

Macaulay, S. (1963). Non-contractual relations in business: A preliminary study. American sociological review, 55-6