In: Accounting
Contract can you please go into detail with for 400 words or more thank you
Johnny, a neighbor who is not a merchant under the Uniform
Commercial Code, offers to buy a car from Mark for $30,000. Mark
asks Johnny for some time to think about it. Johnny says sure. He
writes on a piece of paper that he will keep the offer open for two
weeks.
A week later Johnny sees another car he would rather buy. He
purchases that, and then he tells Mark that he is revoking his
offer.
Two days after that Mark said: “I’m sorry Johnny you made an offer
in writing to buy my car. I’m going to hold you to that.”
Johnny replied: “Sorry I cannot do that. But I will promise to pay
you $10,000 for the help you gave me last year around the house.”
Somewhat mollified Mark accepts.
A week later and Johnny decided to renege on that promise as
well.
Fed up, Mark sued Johnny for breach of contract on both the promise
to buy the car and the promise for the $10,000.
A contract is an agreement between two or more parties that is legally enforceable in a court of law. It is important that a contract must be formed between two more parties in order to be effective and legally enforceable in a court of law. A contract is formed when an agreement is made between two or more parties. An agreement need not be in writing in order to form a contract thus, even oral agreement is also equally enforceable in a court of law provided such agreement has all the characteristics of an agreement. The following characteristics must be present in an agreement in order to form a legally enforceable contract.
In this case there was no contract between Johnny and Mark as in the case of sale of the car Johnny wrote in a paper that he will keep the promise open for two weeks, thus, it was not a contract rather an offer to contract. Hence, the fact that Johnny acquire a different car before the end of two weeks is not a violation of contract as there was no contract at the first place. In case of the promise to help Mark by providing him with $10,000 is also not a contract rather. Human emotions such as help, happiness, sadness and others are not governed by the contract law. Thus, the subsequent actions by Johnny to not help Mark with $10,000 as he promise is not a violation of contract as there was no contract between Johnny and Mark in the first place.
Thus, even though Mark has sued Johnny for breach of contract it would not be sustained in the court of law as there was no contract in the first place and thus, no question of breach of contract.