Johnny, a neighbor who is not a merchant under the Uniform Commercial Code, offe

Question

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.

Discuss whether the elements of a contract are satisfied in this case

Explanation / Answer

The requisite elements that must be established to demonstrate the formation of a legally binding contract are:

(1) offer; (2) acceptance; (3) consideration; (4) mutuality of obligation; (5) competency and capacity; and, in certain

circumstances, (6) a written instrument.

So, the elements of a contract are not satisfied in the given case. The defaults are:

a) No mutuality of obligation in the second promise to pay $10,000. This assurance neither has a written format.

b) There is willingness by either party, to give the promises a legal binding in either of the cases.

So, there is no breach of contract as there doesn't exist an legal binding contract.

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