ASU Jim and Laura Buy a Car Case Study

User Generated

Byvire78

Business Finance

Arizona State University

Description

SCENARIO: Jim and Laura Buyer visit the local car dealership because they are interested in buying a new car. The car they currently have is aging and is starting to have mechanical problems. Jim and Laura would share the new car, and use it to go back and forth to work and school. Before going to the dealership, Jim and Laura decide that they can only afford $400.00 a month in car payments.

Once at the car dealership, Jim and Laura meet Stan's Salesman. Stan shows them several vehicles and Jim and Laura test-drive several of the cars. Jim and Laura particularly like the blue 4-door sedan. Therefore, they agree to give Stan Salesman a $100.00 deposit to hold the car for a day. Stan Salesman does not give them the receipt but guarantees that the $100.00 is refundable. No documents were signed. The next day, Stan Salesman calls Jim and Laura to ask them when they would like to take delivery of the car. Jim and Laura, on the way home from the dealership, decided that they were not going to buy the car because they did not want to spend that money each month. Therefore, Jim and Laura tell Stan salesman that they have decided not to buy the car and request their $100.00 deposit back. Stan insists that the $100.00 was a deposit on the car and was meant to be part of the contract to buy the car. Stan is very persistent and insistent that Jim and Laura have contracted to buy the car; therefore, the $100.00 will be applied to the purchase price of the car. Jim and Laura are shocked and angry as not only do they not want to spend the money, but now feel as though they are being duped by Stan Salesman. Jim and Laura have an appointment to see a lawyer in a few days, but know you are a student taking a business law class and come to you for advice. They are very frazzled, and understandably upset that they may have just purchased a car. Since you have been taking business law, you have read and understand the elements of a contract and the defenses to a contract. Therefore, although you are not a lawyer, you provide some basic advice from what you’ve learned in your business law class. ASSIGNMENT: In three to five (3-5) pages, advise Jim and Laura based on the above facts as presented and the material covered in the lessons. In your paper, be sure to address the following:

  1. Define the elements of a legal contract using examples from the scenario where applicable.
  2. Decide whether or not there was a contract for the purchase of the automobile.
  3. Identify the facts from the scenario which support your decision on whether or not a contract exists for the purchase of the automobile.
  4. Use at least two (2) quality academic resources in this assignment.

Explanation & Answer:
3 pages
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Explanation & Answer

View attached explanation and answer. Let me know if you have any questions.

1

Name
Institution
Professor’s name
Course number
Due date

2
DID JIM AND LAURA BUY A CAR?
A contract refers to an agreement that legally binds two or more people. It can be
implied, oral, expressed, or written; in our case, Jim and Laura had an oral agreement. Oral
agreements are a bit hard to enforce without enough evidence. If the agreement is not backed up
with evidence, the deal will end up with a "she or he said" battle. Jim and Laura gave 100 dollars
to the salesman as a deposit for the car in case they liked it. After keeping it for the day, they
agreed that the deposit was refundable. Stan accepted the terms of the agreement by accepting
the 100-dollar deposit. Jim and Laura had intentions of buying the car, but they had no obligation
to buy it, and the deposit could be refunded whether they bought the car or not.
An Offer states both parties agree to do something in return. In Jim and Laura's case, they
had deposited 100 dollars to have the car for the day. Consideration is when something is
exchanged for something else. Whether it is service, goods, or cash with interest; Getting one
thing in exchange ...


Anonymous
Just what I needed…Fantastic!

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