Five Essential Elements of an Enforceable Contract - A Practical Exercise:
The following exercise is designed to enable students to apply their knowledge of the elements that make up an enforceable contract in a real-world context.
Exercise
You are a lawyer at Boomer Partners, a law firm located in Chicago. You receive a phone call from Oscar Grouchy, a long-time client.
Oscar: "I cannot believe this. I sold a car last month to Bernie Robber, and he has not yet paid me - He owes me $20,000! I want to sue him."
You: "I see. Do you have a sale contract?"
Oscar: "Yes, absolutely. It is signed, and it is definitely enforceable. I wrote it up myself based on the five elements you told me about. I will send it to you now."
You receive the following attachment:
Sale Contract
This contract is an agreement between Oscar Grouchy ("Oscar") and Bernie Robber ("Bernie"), two adult Chicago residents. Oscar Grouchy promises to sell the vehicle number #0485294 (Honda Civic DX 2019) to Bernie in exchange for $25,000 - $5,000 payable immediately and $20,000 payable in 5 business days.
The parties have signed below as a sign of accepting the terms of this sale.
(signatures)
You: "Thanks for the contract. Were either of you intoxicated or mentally incompetent when you agreed to the sale?"
Oscar: "Of course not! We even chatted for an hour. He's a strange fellow. He wanted to make sure that the trunk was very big, he said that he was going to the bank to withdraw $10,000,000 from his bank account in cash. That's why he needed a car actually. I don't blame him, $10,000,000 must be heavy to carry! I knew something was fishy, but he offered me $10,000 above the asking price, so I jumped on the opportunity."
You perform a background check on Bernie and notice that he has been arrested for a bank robbery a day after the sale.
Required:
Determine whether the contract is enforceable using the five elements.
Solution:
All the elements exist apart from the lawful purpose since the car was used for a bank robbery.
- The contract is, therefore, not enforceable.
