Touchstone: Did Jim and Laura Buy a Car?
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 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:

Define the elements of a legal contract using examples from the scenario where applicable.
Decide whether or not there was a contract for the purchase of the automobile.
Identify the facts from the scenario which support your decision on whether or not a contract exists for the purchase of the automobile.
Use at least two (2) quality academic resources in this assignment. Note: Wikipedia and other websites do not qualify as quality academic resources.
In order to foster learning and growth, all essays you submit must be newly written specifically for this course. Any recycled work will be sent back with a 0, and you will be given one attempt to redo the touchstone.


Sample Answer

Sample Answer


Title: Analyzing the Contract Dispute: Jim and Laura’s Car Purchase


In the scenario presented, Jim and Laura Buyer are facing a contract dispute with Stan Salesman regarding the potential purchase of a car. Based on the elements of a legal contract and the facts provided, this paper will assess whether a valid contract exists for the purchase of the automobile and provide advice to Jim and Laura on how to proceed with the situation.

Elements of a Legal Contract

A legal contract typically consists of four essential elements: offer, acceptance, consideration, and intention to create legal relations. In this scenario:

– Offer: Stan Salesman’s offer to sell the car is implied when he accepts the $100 deposit as part of the purchase price.
– Acceptance: Jim and Laura’s acceptance of the offer is shown through their test-driving of the car and giving the deposit.
– Consideration: The $100 deposit serves as consideration in exchange for holding the car.
– Intention to Create Legal Relations: Both parties seemed to intend to enter into a legally binding agreement, as evidenced by their actions at the dealership.

Analysis of Contract Existence

1. Presence of Offer and Acceptance: Stan Salesman’s acceptance of the $100 deposit can be seen as an implicit agreement to sell the car, indicating an offer and acceptance.

2. Consideration: The $100 deposit can be viewed as consideration for holding the car, which is a vital element in forming a contract.

3. Intention to Create Legal Relations: Jim and Laura’s actions, such as test-driving the car and providing a deposit, suggest an intention to enter into a legal agreement.

Decision on Contract Existence

Based on the elements of a legal contract and the facts presented:

– It can be argued that there was a contract for the purchase of the automobile between Jim, Laura, and Stan Salesman.
– The offer, acceptance, consideration, and intention to create legal relations are evident from the scenario.

Advice to Jim and Laura

1. Seek Legal Counsel: While not a replacement for legal advice, it is recommended that Jim and Laura consult with their lawyer as planned.

2. Review Documentation: If there were any documents signed or additional terms discussed, those should be carefully examined to understand the terms of the agreement.

3. Communicate Clearly: Jim and Laura should clearly express their position to Stan Salesman regarding their decision not to proceed with the purchase and request a refund of the deposit.


In conclusion, based on the elements of a legal contract and the facts provided in the scenario, it appears that a contract for the purchase of the car may have been formed between Jim, Laura, and Stan Salesman. It is essential for Jim and Laura to seek legal guidance to navigate this contract dispute effectively and protect their rights in this situation.

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