Michaela Letendre
August 10, 2021
BUS 206
Professor Seabrook
Project Three: Contract Law
A contract has four main elements: the agreement, the consideration, contractual capacity
and a legal object. When discussing the first element, the agreement, both parties involved in a
contract must have the legal capacity to do so, exchange valid consideration, and enter into the
contract with a legal purpose. The moment the second party makes their promise, the contract is
created. The consideration in a contract is the bargained-for exchange or what each party gets in
exchange for their promise under the contract. Contractual capacity is "the legal ability to enter
into a binding agreement" (Kubasek, 2020., pg 326). Both parties must be mentally sound adults
that are not under the influence of drugs or alcohol. The final element of a contract is a legal
object, meaning in order for the contract to be enforceable, it cannot be illegal or against public
policy. In the scenario involving The Friendly Dawg and landlord Lou, the contract has all four
elements. Both parties entered into the contract for a legal reason and they were both legally
capable of doing so. Landlord Lou is allowing The Friendly Dawg the use of his property in
exchange for a monthly rent. The contract is completely legal and is not against public policy
In the scenario involving The Friendly Dawg and landlord Lou, a valid contract still
exists between the two parties. One key element in this situation is that regardless of the tenant
use of the premises in the contract, "the tenant may not use the premises in a way that creates a
nuisance for surrounding tenants" (Kubasek, 2021., pg 1203). This means that by creating a
nuisance for Sunshine Yoga and taking away Jasmine's right of quiet enjoyment, The Friendly
Dawg is in violation of the lease. In regards to The Friendly Dawg's claims that Lou is breaching
his obligation to maintain the property in good repair, this is false. Landlords are generally
responsible for "ensuring that the premises meet certain statutory requirements" (Kubasek,
2020., pg 1205). This would include city ordinances regarding standards for building structure,
wiring, and plumbing. Since The Friendly Dawg's air conditioning problem is a result of their
own expansion into an area that was not meant to be cooled, Lou is not in breach of contract
regarding maintaining the property. Regardless of Lou being in breach of contract, The Friendly
Dawg cannot simply stop paying their rent. In the event of a landlord's breach of contract, a
tenant can withhold rent payments in an escrow account held by an escrow agent , but the tenant
can only withhold the amount associated with the breach of contract. In this case, The Friendly
Dawg should have withheld the rent payments up to the cost of the air conditioning repair in an
escrow account with the local court. Once the amount had been reached for the repair, he should
have resumed paying Lou. Lou is obligated to provide a