Question

Business Law

Jann offers to buy a laser printer, with a case of paper, two extra ink cartridges and the USB cable, from Super Office Supplies for $200. Ryan, Super's authorized representative, says, "Sold for $200 dollars, but no extra ink car­tridges or cable." Do we have a contract? Explain why we do have a contract or what we have if we don't.

Answer 1

A contract is nothing but the legal binding between two or more parties that enter into a legal agreement. The contract is valid if there is an offer made, offer accepted and the consideration to be paid by the promise made.

An enforceable contract is a contract which is valid by the court. Any contract which is either made verbally or written must include specific element in order to make it legally enforceable in a court. If any of the elements is missing from the contract, then it will not be enforceable.

A valid contract has four requirements. They must consist of offer, acceptance, consideration and intention of legal consequences.

• Offer – It is an act to do something or to pay an amount, if accepted, forms a valid contract. To make an offer there should be at least two parties or even more who can legally enter into a contract. It is important to specify the deadline for the acceptance of offer in order to avoid potential dispute between the parties or cancellation. An offer cannot take silence as a form of acceptance from the other party.
• Acceptance – After the offer is made, there should be acceptance from the other party or parties to make it a valid contract. The party accept the offer if they are clear with the rules and regulation. If the parties are still under the negotiation process and there is no acceptance till now to the offer, then it is still not a contract. If a person to whom the offer is made has accepted only some of the terms or proposes some of the new terms, then it is the counter-offer that is made by the other party and is still not a valid contract.
• Consideration – This forms the important part of the contract which consist of value such as money, payment or the cost of the promises of performance agreed to in a contract. A valid contract will have consideration part for both the parties where one party promises to do something in return for a promise from the other party to provide some benefit.
• Intention of legal consequences – A contract is valid if the parties agree to enter into a contract legally and are aware that the agreement can be enforced by law. Sometimes the document may contain the words “subject to contract” or “without prejudice” which indicates that the things that are written are legal in nature.

In this scenario, the consideration part is missing because what was being offered by Jann was not accepted completely by Ryan, so this contract is invalid.