Contract Scenario

Submitted by: Submitted by

Views: 407

Words: 1169

Pages: 5

Category: Business and Industry

Date Submitted: 08/10/2013 05:40 PM

Report This Essay

RUNNING HEADER: Contract Scenario

Contract Scenario

LAW/575 Business Law for Consultants

February 25, 2013

Contract Scenario

Paul and Priscilla Peterson purchased a single-family home from Paul’s friend Danny Davidson. The three individuals agreed upon a verbal contract for the purchase agreement for the home for $250,000. Thus, the individuals entered into a contract without creating a written agreement. Danny did not inform Paul and Priscilla of a dispute that occurred with the neighbor Ned. This dispute was concerning the south property boundary. Danny also did not disclose a soil subsidence problem. After purchasing the home, the Petersons invested another $50,000 by upgrading the bathroom with a new bathtub and Italian tile as well as another $15,000 in landscaping. The Petersons became aware of the soil problem while landscaping and it soon caused cracks to form in the new bathroom tile. Paul and Priscilla filed suit against Danny for breach of contract.

Valid or Invalid Contract

The elements of a legally binding contract include agreement, consideration, capacity, and legal object (Kubasek et al., 2012, p. 306). The agreement in this contract scenario is the verbal agreement that Paul and Priscilla will purchase the home from Danny. For exchange of the house the consideration is $250,000. Paul, Priscilla, and Danny are of age, do not suffer from mental illness and were not intoxicated at the time of agreement, which constitutes capacity for each party involved in this verbal agreement. Because the contract was not illegal and was abiding public policy, the contract also...