A contract is very different from an agreement. There are certain elements that must always be met for an agreement to be considered as a contract. In many cases, if any of the elements is missing then the agreement cannot be considered to be binding in the legal sense. A contract must have the following elements:
Offer: At all times, between the two parties, there must exist a definite and very clearly outlined offer for doing something. An offer is always an expression to do something which is then supposed to be followed by unconditional acceptance from the other party involved (Harmon, 2004). If such a situation is presented then a contract is made. As in the case of Jim and Laura, the couple offers to give Stan Salesman an offer of $100 as a deposit so that the Stan Salesman can hold the car for them for one day. Stan agrees to the offer despite the fact that he does not give them a receipt. Their offer was accepted unconditionally by Stan and as such, a contract can be said to have been made. There is even a time specified which is 24 hours within which the couple could have revoked the contract if they so wished. But as soon as the given time frame had elapsed then the contract was binding and in that case Stan was very right to say that the money was part of the deposit for the car. In fact, it is Stan who calls the couple after the 24 hour period had elapsed and it is only then that the couple let him know that they would not wish to purchase the car.
In many cases, it can be argued that the offer that the couple made can be considered as an invitation to treat which typically is a way of inviting other people to make an offer that is not in essence an offer itself (Cherednychenko, 2006). In such a case, then the couple would have let Stan to hold the car as the couple went to iron their issues and get back to him after 24 hours. That way, then it could fall under the invitation to treat. But in this case, the couple bounded themselves to buy the car and told Stan to hold the car for them for 24 hours after which they would come and make payment for it.
The other element that must be presence is Acceptance. Here, one can only accept exacty what has been offered as is. It implies that the offer can only be accepted precisely as it is presented without any conditions (Bleys, 2011). In this situation, the question of who makes the last offer is irrelevant since the acceptance of the offer is the one that counts. In the case of the couple, they offer $ 100 to Stan so that he can hold the car for them for 24 hours. Stan, on the other hand, accepts the offer without any conditions and holds the car for them for the time specified. In a court of law that will count as a contract and thus the couple would be considered on the offending side and not Stan.
The other element that must also be presence is the intention of legal consequences. Here, it is required that both parties comprehend that the arrangement that they are making can be enforced legally. In many times, the intent to always create a legal relation is always presumed and, as such, it is not mandatory for the contract to mention that you comprehend the legal procedure to be followed. In the case of the couple, Stan is not doing anything illegal but is just doing his job and following the terms of the contract. If the couple wanted not to be liable legally, then they could have decided to put it in writing and Stan agreed to it.
The other element that must also be present for an agreement to hold is Consideration. A contract will only hold if it is reinforced by prized consideration. One of the parties promises to carry out something for a given service that the other party also promises to do (Bleys, 2011). A consideration in most cases is the price that each party offers of gives the other one. As such, the couple offered Stan $ 100 for the promise that the amount will be taken as deposit and that he will hold the car for them. In such a case and even in court, a consideration will be deemed to have been made.
As such, in the above case, a contract was indeed made for the purchase of the automobile as Jim and Laura had indeed contracted to purchase the car. The $ 100 that was offered does indeed count as part of the purchase of the car. Jim and Laura have no choice but to go ahead and purchase the car. The couple makes an offer to Stan, who unconditionally accepted the offer. The time that they specified for the contract to be revoked elapsed and the couple did not inform Stan that they will not be purchasing the car after all. As soon as the time elapsed, the contract was active, and there is nothing that they could legally do to revoke it. The element of consideration was also evident as they offered the deposit money for Stan to hold the car for them for 24 hours after which they would then come and purchase the car. Stan accepted the money and promised to hold the car for them for the specified amount of time. As such it is very clear that a contract was made for Jim and Laura to purchase the car.
References
Burton, S. (2009). Elements of contract interpretation. Oxford: Oxford University Press.
Cherednychenko, O. (2006). Fundamental Rights and Contract Law. European Review Of Contract Law, 2(4). http://dx.doi.org/10.1515/ercl.2006.036
Harmon, A. (2004). Eternal bonds, true contracts. Albany: State University of New York Press.
