Business Law

Touchstone 2: Did Jim and Laura Buy a Car?

Directions: Follow the directions for each part of the touchstone template. Include your
response and all relevant elements under the Requirement section. Prompts in the Inspiration
section are not required; however, they may help you to fully think through your response.
Remember to review the Touchstone page for response requirements, rubric components, and
grading specifics.
Name: Ariel Salmon
Date: March 31, 2023

PART 1: Contract Definition

Task:
Identify the elements that must be present for a legal contract to exist. Define each element using
examples.

Requirements:
 Identify the elements of a legal contract.
 Define each element.
 Provide an example for each element.
 Include reference citations as appropriate.

Inspiration:
When writing your response, think about the understanding of contract law
 Have you defined the elements of a legal contract?
 Have you used examples from the scenario to illustrate these elements?
Identify and define elements of a legal contract below:

Part 1: Contract Definition

A contract is an agreement between two or more parties that creates obligations that are legally
enforceable. For a legal contract to exist, certain elements must be present, including:

Offer: An offer is a proposal made by one party to another, indicating a willingness to enter into a
contract on certain terms. For example, in the scenario, Stan Salesman offered Jim and Laura the
blue 4-door sedan for a certain price.

Acceptance: Acceptance is the agreement by the other party to the offer made by the first party.
Acceptance must be clear, unambiguous, and communicated to the offeror. For example, in the
scenario, Jim and Laura accepted Stan Salesman's offer by agreeing to purchase the car.

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Consideration: Exchanging something of value between parties is called the consideration. It can be
promises, services, goods, or money. For example, in the scenario, Stan Salesman agreed to sell the
car to Jim and Laura who both agreed to pay a certain amount for the car.

Intention to create legal relations: A legally binding agreement is intended by both parties. For
example, in the scenario, there was an intention to create a legally binding agreement, (it is
assumed) by Jim and Laura and Stan Salesman.

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 PART 2: Case Support
Task:
Determine the facts from the scenario that you will use to support your decision on whether or not
Jim and Laura entered a contract with Stan Salesman for the purchase of the automobile.

Requirements:
 Identify relevant facts from the scenario.
 Write a clear explanation of how these facts will support your decision.
 Include reference citations as appropriate.

Inspiration:
When writing your response, think about how the facts in this case study could support a judgment
made.
 Have you defined relevant facts from the scenario that would support a case?
 Have you discussed why these facts from the scenario relate to each element of a contract
from Part 1?
After reviewing the scenario presented, it is necessary to identify the relevant facts to determine
whether or not Jim and Laura entered into a contract with Stan Salesman for the purchase of the
automobile.

First, Jim and Laura visited the local car dealership to look for a new car. They agreed that they
could only afford $400.00 a month in car payments. Second, Jim and Laura test-drove several cars
with the help of Stan Salesman, and they decided to give him a $100.00 deposit to hold the car for a
day. Third, Stan Salesman did not provide them with a receipt, but he assured them that the $100.00
was refundable. Fourth, Jim and Laura did not sign any documents during their visit to the
dealership.

The above-mentioned facts indicate that the parties did not enter into a contract for the purchase of
the automobile. For a contract to exist, there must be an offer, acceptance, consideration, and
intention to create legal relations. In this case, there was no offer from Jim and Laura to purchase
the car, and therefore, there could be no acceptance from Stan Salesman. Furthermore, no
consideration was given as the $100.00 deposit was intended to hold the car and was explicitly
stated as refundable. Lastly, there was no intention to create legal relations since no formal
agreement was made, and no documents were signed.

Based on these facts, it is evident that Jim and Laura did not enter into a contract with Stan
Salesman for the purchase of the automobile. The $100.00 deposit given to hold the car was
refundable, and no documents were signed to formalize the agreement. Therefore, Jim and Laura
have the right to request a refund of their deposit without any legal obligations.

Reference:
Beatty, J. F., Samuelson, S. S., & Abril, P. S. (2020). Business law and the legal environment.

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Cengage Learning.

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 PART 3: Case Judgment
Task
Based on the facts in Part 2, decide whether or not there was a contract for the purchase of the
automobile.

Requirements
 Clearly state your decision on the existence of a contract for purchase of the automobile.
 Defend your decision with relevant facts from Part 2 about the scenario that support your
choice.

Inspiration:
When writing your response, think about the judgements made on this case study
 Have you provided a clear judgment on whether Jim and Laura entered a contract to
purchase the automobile with Stan Salesman?
 Did you use facts from the scenario to support the decision made on whether they entered
into a contract?
Based on the facts provided, it is unlikely that Jim and Laura entered into a contract for the purchase
of the automobile with Stan Salesman.

Firstly, there was no meeting of the minds, which is an essential element of a contract. Jim and Laura
clearly communicated to Stan Salesman that they could only afford $400 a month in car payments.
There is no indication that they ever agreed to pay more than that amount. Therefore, there was no
mutual agreement on the essential terms of the contract.

Secondly, there was no consideration exchanged between the parties. Consideration is something of
value that each party gives or promises to give in exchange for the other party's performance. In this
case, Jim and Laura only gave a $100 deposit to hold the car, which Stan Salesman agreed was
refundable. There is no evidence that they promised anything else in exchange for the car.

Lastly, there was no formal written contract signed by both parties. While not always required, a
written agreement would have clearly outlined the terms of the sale, including the price, financing
terms, and other relevant details.

In conclusion, based on the facts provided, it is unlikely that Jim and Laura entered into a contract for
the purchase of the automobile with Stan Salesman. The lack of a meeting of the minds,
consideration, and a formal written agreement all support this conclusion.

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 PART 4: Sources & Conventions
Task
Include two academic references to support your judgment and review your document for standard
English writing conventions. 

Requirements
 Provide two high quality academic references.
 Explain how each source relates to and supports your judgment on the case.
 Review the touchstone for proper academic and/or professional writing conventions.

Inspiration:
When writing your response, think about your research surrounding this case study.
 Have you explained how each source relates and supports your judgment on the case?
 Have you reviewed your document to ensure that spelling, grammar, punctuation, and
formatting are all appropriate for an academic or professional setting?
The academic works "The Law of Contracts and the Uniform Commercial Code" by Pamela Tepper
and Ronald Mann and "Essentials of Business Law" by Jeffrey Beatty and Susan Samuelson both
support the conclusion that no contract was created for the purchase of the car between Jim and
Laura and Stan Salesman.

In order for a contract to be formed, Tepper and Mann (2015) address the idea of a "meeting of the
minds," or that both parties must concur on the key points of the agreement. A contract was not
created in this instance because there was no agreement on the parameters of the deal, such the
purchase price.

The definition of a contract according to Beatty and Samuelson (2016) is an offer, acceptance, and
consideration. Jim and Laura did not expressly propose to buy the automobile in this instance, and
Stan Salesman's offer was not accepted either. Additionally, Jim and Laura did not expressly expect
the $100 down payment to be used as consideration for a purchase agreement.
It seems improbable that a contract for the sale of the car was made between Jim and Laura and
Stan Salesman based on the advice given by these scholarly authorities and the information supplied
in the scenario.

References:

Beatty, J. F., & Samuelson, S. S. (2016). Essentials of Business Law. Cengage Learning.

Tepper, P., & Mann, R. A. (2015). The Law of Contracts and the Uniform Commercial Code. Wolters
Kluwer Law & Business.

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