Cory Tkatch
Touchstone 2 Business Law
12 July 2021
Did Jim and Laura buy a car?
In order to be a binding contract, various components must exist. All the parties, mutual
promises, terms of performance, execution, acceptance, consideration, and mutual understanding
for a contract remain legally binding and applicable. The most significant part of a contract is at
the time of closing the deal. For this case, it would be at the point of actual sale of the blue car,
which Laura and Jim liked. However, after considering their eagerness to spend up to $400.00
monthly, the two agreed. The initial opinion for procuring the car does not satisfy. There should
be a clear mutual understanding and agreement for the smooth exchange of property for any
contract to exist. Both parties needed to agree to the terms placed, and this must be without
hidden clauses within the agreement. Like in this case, the Salesman says that the deposit is
refundable and changes his attitude once the customers make an adverse decision towards
purchasing the car.
The seller plays his role in contacting his customers to close the deal, and since that did not
happen, he feels that the initial deposit was a commitment into a contract. However, that is not
the case since the two parties made no committing documents. There is a mutual agreement that
either party could revoke at will since nothing bound them together. Both parties communicated
that the $100.00 was just a deposit. However, the seller never disclosed to the prospective buyers
that the deposit would be part of the purchasing contract. The contract has to be something
lawful that binds two or more parties according to the requirements of the law (Blum, 2007). In
the absence of such binding documents such as receipts, Laura and Jim have the right to make a
contrary choice from their initial decision, and that obliges Stan to give them a refund of the
$100.00 deposit.
Considering having created legal relations as a component of a contract, the arrangement
between Jim, Laura, and Stan lacked in the capacity. This element is vital in commercial
transactions as it can help either party with a possible lawsuit due to failure to fulfill the statutory
provisions. In this scenario, there was no binding contract and the claim by Stan Salesman that
the $100.00 deposit as part of the contract is void. With a mutual agreement, and either party
could withdraw before the completion of the initial agreement. Legally, Stan cannot force Jim
and Laura to buy the car without the lack of proof. He had only decided to sell the car, and the
buyers have initially been willing to deposit with monthly installments to follow, which they
later feel incapable of making.
The seller did not have any legal binding time for the offer to last. He cannot claim that being the
one who later contacted the buyers was a sign of their acceptance of the offer. It is upon
Laura and Jim