Contract was formed between Marlena & John-Samples for Students

Question: Marlena offered to sell her car to John for $78,000. John said that he would need some time to think about it and would get back to her. After three days John called and said that he accepted Marlenas offer. Marlena informed John that, since she hadnt heard from him, she had sold the car to Kristin. Advise John as to whether or not he is entitled to the car. Answer: Issue Whether a contract was formed between Marlena and John? Rule A contract is an agreement between two or more persons and is enforceable in the court of law, In order to render a contract as valid it must include the following essential elements (Poole, 2016). Offer The person making a proposal to another person to enter into a contract is called an offer and the person is known as offeror as was held in Harvey v Facey [1893] UKPC 1. An offer is different from an invitation to treat where an offer leads to a binding contract after acceptance, an invitation to treat is said to be accepted only after performance as was established in Carlill v Carbolic Smoke ball co. [1893] 1 QB 256. Acceptance The person to whom an offer is made is called the offeree and acceptance to such offer is said to be made when the offeree agrees to such offer orally, either in writing or by conduct as was held in Crown v Clarke [1927] 40 CLR 227. After a valid acceptance of an offer, a contract becomes binding upon the contracting parties. Therefore, it is essential to determine the validity of an acceptance to make the parties bound by the contract. An acceptance must be communicated to the offeree as was held in Entorres v Miles Far East [1955] 2 QB 327; The terms of acceptance must match the terms of the offer and silence does not amount to an acceptance of an offer as was established in Felthouse v Bindley [1862] 142 ER 1037. Consideration Consideration is the price that the offeror stipulates to be made in exchange of the promise made. Under the Common law, an agreement becomes binding upon the contracting parties when there is a consideration (payment in some form) for the promise made as was held in Australian Woolen Mills Pty Ltd v The Common wealth [1954] HCA 20. Legal Intention In order to render a contract as valid, it is important that the parties to the contract have the legal intention to be bound the contractual terms and perform their respective contractual obligations. The burden of proof is on the party seeking to establish the contract and the party must establish the legal relationship existing between the parties (McKendrick, 2014). Capacity The parties to the contract must have the legal capacity to enter into agreements that is, the contracting parties must establish that they do not fall under the category of person who lack legal capacity to enter into the contract such as minors, persons of unsound mind etc (McKendrick, 2014). These elements must be present in order to establish that a contract has been formed between ten parties. A void contract cannot be enforceable in the court of law. Application In the given scenario, Marlena proposed to sell her car to John, which amount to an offer as she has made a proposal to form a contract with John. She further offered to sell her car in exchange of monetary value of $78000, which forms the consideration of the offer. However, in Crown v Clarke it was held that to form a contract an acceptance of the offer is mandatory to make the contract binding between the parties. In the given scenario, Marlena made an offer but John did not accept her offer neither his conduct signified any acceptance. Moreover, it is important to communicate the offer to the offeror as was ruled in Entorress case which John did not communicate when the offer was made to him and stated that he would talk about it later, thus, signifying non-acceptance of such offer. Furthermore, this also implies that John did not have any legal intention to be bound by the contract as well. Therefore, it can be stated that in this case, the essential elements like acceptance, legal intention was not present that does not render a contract as valid. Since acceptance is considered as an agreement to the offer made and signifying a binding effect of the contract upon the parties, it is mandatory to make form a contact. Although there is a valid offer and a valid consideration promised by Marlena as the offeror to John in exchange of the car, lack of a valid acceptance does not amount to a formation of a contract between the parties. Conclusion Therefore, it can be stated that no contract was formed between John and Marlena. Reference List Australian Woolen Mills Pty Ltd v The Common wealth [1954] HCA 20. Carlill v Carbolic Smoke ball co. [1893] 1 QB 256. Crown v Clarke [1927] 40 CLR 227 Entorres v Miles Far East [1955] 2 QB 327; Felthouse v Bindley [1862] 142 ER 1037. Harvey v Facey [1893] UKPC 1. McKendrick, E. (2014).Contract law: text, cases, and materials. Oxford University Press (UK). Poole, J. (2016).Textbook on contract law. Oxford University Press.