Contract Paper

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Contract Paper

Introduction

A contract is important, to keep agreements on track and ensure they are fulfilled. A contract is an agreement between two entities, individuals, or parties that create a mutual legal obligation. A contract can be perceived as a promise enforceable by law (Wevers, 2021). The promise in this context may entail doing or refraining from doing something. The making of a contract includes a mutual assent of two or more persons. In the contract, one individual makes an offer while the other accepts. A contract has five main elements such as offer, acceptance, consideration, legality, and capacity (JEC, 2022). In that regard, this paper provides an example of a contract agreement and how the five elements are applicable in that context.

An Example of a Contract

The example involves a friend who walked to a Toyota showroom to put a down payment on a car (Toyota Avalon). During the process, He was provided with a 1-year contract agreement with the Toyota company.  He was supposed to pay $ 450 monthly until the completion of the car payment. This was a written agreement with the company that they signed. Since then He has been compliant with the terms and conditions that were signed on the paper.

How the Five Essential Elements of an enforceable contract relate to the example

All the five essential elements relate to the example in one way or the other. Offer is the first element, whereby, one of the parties makes a promise or a demand of some sort to be accepted by the other party (JEC, 2022). In this context, the client was provided with a deal by Toyota company to pay a deposit of a certain amount and a fixed amount every month until he completes the car price. He could not afford cash payment at once hence, paying in bits was an offer to enable him to own the car.

The second essential element is acceptance. It describes the acquiescence to enter into a contract under the terms of the offer. Acceptance can be expressed through words, deeds, or performance, per the contract. The acceptance must reflect the terms of the offer, otherwise, it might be regarded as rejection (JEC, 2022). Regarding the provided example, acceptance is demonstrated when the client accepted the offer that was given to him with full acknowledgment and understanding of the agreement.

The third essential element is a consideration. It means the contract is presented in exchange for something. Anything of legal value is asked for and received as the price for entering into a contract (JEC, 2022). This can take the form of a significant expenditure of money or effort, a promise to perform some service, an agreement not to do something, or reliance on the promise. Consideration is the value that induces the parties to enter into the contract (JEC, 2022). Based on the presented situation, the buyer had to put down some payments with Toyota company to get started towards finalizing the process of making him a legal owner of the vehicle.

The fourth essential element is legality, which represents the extent to which the contract is legal and not against public policy. It requires that the contract is for a legal purpose rather than an illegal purpose (JEC, 2022). This element relates to the situation because the buyer had to legally sign the contract with clear terms and conditions. The contract was signed by a law urgency to ensure compliance.

Last but not least, the fifth element is capacity. It describes the mental competency to enter into a contract. Additionally, it ensures that only mentally mature individuals of certain age enter into a contract (Wevers, 2021). This element relates to the presented situation in the sense that the buyer was an adult (over 18 years). He was also in the right senses and does not have any mental retardation.

Circumstances of A Breach of Contract

A breach of the contract can occur when either of the parties involved fails to comply with particular terms and conditions of the contract. Regarding the example above, failure by the buyer to pay monthly installments as specified in the contract could lead to a breach of the contract (Wevers, 2021). The Toyota company must then find remedies to the problem as outlined in the contract terms and conditions. The contract should always provide measures to be taken when one fails to comply. In this case, the company would call the buyer over the phone to remind him. If he does not respond, he may be summoned for a physical meeting (Wevers, 2021). Again if he fails to respond, the vehicle will be withdrawn from him. Legal procedures may take effect based on how things might proceed.

Conclusion

A contract is an agreement between two parties that result in a mutual legal obligation. It could be about anything (rental, moto vehicle purchase) as long as a legal agreement is involved. Five elements of a contract include offer, acceptance, consideration, legality, and capacity. A contract should outline measures to be applied in case of a breach of the same.

References

JEC. (2022). Elements of A Contract. http://jec.unm.edu/education/online-training/contract-law-tutorial/contract-fundamentals-part-2

Wevers, H. (2021). A basic guide to international business law. Routledge.