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Question: Law Scenario Question - Formation of Contract

Activity 1
Problem Question
Jose Lorenz is thinking of buying a van Gogh painting from a local gallery. He goes to the gallery owner, Fidelo, and the following conversation takes place:
Jose Lorenz: ‘I am thinking of buying your van Gogh painting, how much would you sell it for?’
Fidelo: ‘How much would you be prepared to pay?’
Jose Lorenz: ‘Would you take £7000?’
Fidelo: ‘Done! When can you pay?’
Jose Lorenz agrees to come with the money later that evening. However, he decides later that he cannot afford £7,000 and goes back to Fidelo to explain. Fidelo is not happy. He insists that he has a contract with Jose Lorenz and demands payment.

(a) How would you advise Jose Lorenz?

(b) Imagine in the above scenario Jose Lorenz does not agree to return with any money, but instead walks away without making any comment after Fidelo has said “Done! When can you pay?” Is there a binding contract?

Answer: Answer for Question (A) of Activity 1
My advise to Jose Lorenz will be that he has done a verbal agreement with Fidelo because Jose agreed to come with the money on that evening itself when he had shown his intention to buy van Gogh painting and offered to pay £7000 in return which was accepted by Fidelo. Verbal agreement is considered legally contractual binding if there are certain elements which need to be satisfied which are as follows: -
a) Offer and Acceptance: an offer is made which is accepted by another party.
b) Consideration: there must be something of value exchanged for a promise while noting this
does not always have to be money.
c) Intention: there must be an intention by the parties to make a legally binding agreement
d) Capacity: the parties must have legal capacity to enter into the contract.

In the verbal discussion and agreement all the above...(short extract)

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  • Subject: Law
  • Course: Contract Law
  • Level: Degree
  • Year: 1st
  • Mark: Not available
  • Words: 1063
  • Date submitted: December 22, 2019
  • Date written: January, 2019
  • References: No
  • Document type: Essay*
  • Essay ID: 8774

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