CONTRACTS ESSAY TWO Student 189xxx
I.) Is there a valid enforceable contract between Pat and Dan?
a. Contract formation: In order for a contract to be considered valid and enforceable it must contain the following elements: offer, acceptance and consideration or mutual assent and consideration. Contract formation is governed under two principles, either the Uniform Commercial Code or common law and these laws dictate which elements are required.
i. Our transaction between Pat and Dan is for land. This dictates that common law will prevail in this case and therefore mutual assent and consideration are the required elements for valid contract formation.
b. Mutual Assent: In order for common law to recognize mutual assent the material terms of the contract must be specified. These terms must be definite and certain. Generally the amount to be paid and period of performance are considered material terms.
i. Pat and Dan agreed to a sum of $250,000 plus a “fair commission to be determined.” At first glance it appears they have satisfied the amount to be paid, however, some courts would deem the “fair commission to be determined,” as quite ambiguous. If Pat can prove the agreement to determine the commission was an implied term, Pat would establish this requirement for mutual assent.
ii. Period of performance Pat and Dan did not establish a timeline of when she would complete the payments Dan for the property. Dan knew Pat was coming into a large sum of money and offered to finance a house of her choice for her with the anticipation of receiving payment for the home when Pat’s installment was received. Although a time specification was not made, Pat made installment payments monthly to Dan in the sum of $1000 with a request for the “fair commission” term. Dan cashed these checks, but did not correspond with Pat. Pat can justify the period of performance because she sent Dan consideration before Pat received the large sum of money. By Dan cashing the checks...