Business Law I: LEG 100
As defined by law, a contract is an agreement, verbal or written, that can be upheld in a court of law. As such, certain conditions must be met in order to form a contract. There must be an offer, acceptance, consideration, legality, capacity, and consent. This means that there has to be an offer with clear, definable terms that are agreed to by all entities involved. Further, each party must put forth consideration, or the gain of said contract. In addition, contracts can only be legally enforceable if they are for legal purposes and entered into by individuals who are adults that are not mentally impaired in any capacity(Beatty, Samuelson, and Abril). In this instance, there has been an offer to hold the vehicle of Jim and Laura’s choice for one day for the refundable fee of one hundred dollars made by Stan Salesman. Jim and Laura accepted this offer.
The initial contract is on the basis of an offer of a deposit, that is refundable, and both parties agreed to hold the vehicle for one day. However, no terms for purchase were discussed, no payment arrangements were made, nothing has been signed nor verbally agreed to concerning purchase, and Stan Salesman has verbally stated that the deposit is refundable. These were the conditions of the initial contract made between Stan Salesman and Jim and Laura Buyer. Therefore, there has been no contract made for the purchase of the vehicle, only to hold the vehicle for a period of one day. Under common law, in sales particularly, the formation of a contract within sales must contain all the pertinent terms, and that the offeree accepts all the terms (Beatty, et al.). This was not the case in this dealing.
Additionally, the UCC, the Uniform Commercial Code, has been formed to create a more uniform code of conduct for carrying out sales contracts from state to state. The UCC has determined that merchants are held to a higher set of standard than private parties concerning sales contracts. Merchants are those who “routinely deals in the particular goods involved”. These standards include having a contract in writing for purchase of goods exceeding $500 (Beatty, et al.). There was no written contract signed by any of the parties involved, specifically the buyers, Jim and Laura.
There are some additional codes of conduct for sales, according to the UCC, that can make or break a contract. There is a statute of codes that include reasons for breach of contract that provide causes for fraud. These include intention, additional terms, and/or different terms (Beatty, et al.). In this case, the intention on the part of Jim and Laura is to place a refundable deposit for one day. This intent was supported verbally by Stan Salesman. Additionally, the terms of the originally agreed to contract had changed to include different, not agreed to terms, on the next day when tan Salesman called and spoke with Jim and Laura. Stan Salesman insisted Jim and Laura agreed to put one hundred dollars towards the purchase price of a car. This change of terms indicates a case for fraud (Consumer Reports).
Based on the intent of Jim and Laura, and the intent verbally expressed by Stan Salesman, there was no agreement to purchase the vehicle. Secondly, the following day, Stan Salesman changes the terms of the contract to a nonrefundable deposit that now is applied to the purchase of the vehicle. Both instances are identified as forms of fraud and thereby void any contract made between both parties. Consumers should be wary of fraudulent tactics and can visit the consumer protection agency for tips and details (Consumer Reports).
While there appears to be an initial contract formed over the deposit, the terms were only to hold the vehicle for one day. This was not an agreement, or contract, for purchase. Additionally, there was nothing put to writing, nor signed by either party. Even further, the terms of the original contract are null and void due to the fact that the terms were changed without the agreement of all parties involved. In fact, the details of this case raise issues of fraud by the merchant (Beatty, et al.).
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