Analyzing Contract Obligations and Breaches

Kaplan University LS311 Lori Kieffer-Garrison Unit 4 Case Study Kayla Fulrath November 19th, 2012 In this case study, we are looking into what constitutes a contract and when a person is obligated to honor a contract. In this scenario Carrie offered to sell a set of legal encyclopedias to Antonio for $300. 00. Antonio said that he would think about her offer and let her know his decision the next day. Norvel, who had overheard the conversation between Carrie and Antonio, said to Carrie, "I accept your offer," and Carrie gave Norvel the books.

The next day, Antonio, who had no idea that Carrie had already sold the books to Norvel, told Carrie that he accepted her offer. We need to determine whether or not Carrie is obligated to sell her encyclopedias to Norvel and whether or not she is breaching a contract with Antonio. The answer is yes, Carrie is obligated to sell her encyclopedia set to Norvel, and no, she did not breach a contract with Antonio. For a contract to be considered a contract there are certain basic elements that must be present. First there must be an agreement to form a contract which consists of an offer and an acceptance of that offer.

Second, there must be consideration, which consists of a valuable exchange to support the acceptance of an offer. Third, a contract must of contractual capacity, meaning the parties involved must be competent. Lastly, the contract must be legal (Miller and Jentz, 2008). I’m going to assume that all parties are of sound mind and that Carrie is not illegally selling her set of encyclopedias because I don’t have evidence to the contrary. In the situation with Norvel, I would say a valid contract is established. Carrie has offered a set of encyclopedias for sale.

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Her first buyer, Antonio, does not initially accept her offer. Norvel pops up and states that he would accept her offer. So now an agreement is formed, which is part of the elements of a contract being a contract. Consideration is also established because Norvel has paid Carrie for her encyclopedias. Here an exchange of value has taken place, solidifying the agreement. Assuming the sale is legal and Carrie and Norvell aren’t crazy, we have ourselves a valid contract, thus Carrie is obligated to sell her encyclopedias to him. In the situation with Antonio, it looks like the making of a contract.

Carrie presents an offer to sell Antonio her encyclopedias. Antonio does not initially accept her offer; he basically says he will think about accepting her offer. So the first element of contract has partially been made. An offer is presented, but there is no acceptance. Had Antonio established consideration for the offer, like possibly offering a deposit for her to hold the encyclopedias and promise not to sell them before he has had time to think about it, then there would be a breach of contract. Antonio, plain and simple, did not accept the contract and did not offer any consideration for the offer.

There is no breach of contract because no contract ever existed. Although there is no legal obligation for Carrie to sell her encyclopedias to Antonio, I would say there is a moral one. I think in this situation, it would have been morally correct for Carrie to contact Antonio and let him know she had another interested buyer and he needed to make a decision at that time, not the next day. He should have the first option to buy the books since he was offered them first, from a moral standpoint. References Miller, L. Roger. , & Jentz, A. Gaylord (2008). Fundamentals of Business Law. Cengage Learning: Ohio.

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