PART ONE - "Objective Standard" Interpretation of Contracts
Last week you attended a party with some of your friends. There were also people you had never met at the party. No one was intoxicated or drinking alcohol at this party. A friend of yours asked you how you like your new Mercedes SL-Class Roadster automobile. You purchased the car last month, but it has been in the shop for the past two weeks while the dealer tries to figure out the problem with the engine. Your response is: "I'm so frustrated with it that I would sell it for $100 to anyone dumb enough to give me $100 for it." Terry, a person you never met before, hears your statement and says: "I'll give you $100 for your car." You laugh and shake his hand and say "It's a deal." Nothing more is said about it. Two days later Terry knocks on your door. When you answer it, Terry holds out a $100 bill and says: "Here is my $100 payment for your car. I'll wait here while you sign over the title to me." You are shocked. You begin to review in your mind all of the elements of a valid enforceable contract (which you learned in your favorite class - Legal Environment and Contract Law) and wonder if indeed you and Terry have a valid contract.
Describe the elements of a contract and explain whether each element is present in this scenario. Be sure to consider all of the elements and any defenses that might apply in this situation. What is Terry's best argument that you have a contract? What is your best argument that you do not? Give a conclusion about whether or not you are obligated to accept the $100 and transfer your car title to Terry.