Chegg Guided Solutions for Cengage Advantage Books Business Law 8th Edition: Chapter PART2

Chapter: Problem:
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  • Step 1 of 6


    Is it a stronger argument for mistake or breach in the acceptance of an offer intended for another?
  • Step 2 of 6

    Valid Contract:

    The elements of a valid contract include:

    1. There must be an offer and acceptance that is easily perceived as an agreement.

    2. There must be legally-sufficient value (Consideration) in the form of something received or promised that convinced a party to the contract to make the deal.

    3. The parties to the contract must have legal capacity to enter into the agreement. Capacity consists of legal age, mental competency and sobriety within reasonable awareness.

    4. The goal of the contract must be to achieve a purpose that is legal under local, state and federal statutes and regulations, and public policy in general.

    Each element is necessary in order to have a legally binding contract.

  • Step 3 of 6

    Breach of Contract:

    If one party to a contract fails to fulfill the requirements of his/her promise as stated in the contract s/he has breached the contract.

    In order to be successful, a plaintiff must prove the following three elements:

    1. The existence of a valid contract,

    2. Breach of the contract's terms,

    3. Damages.

  • Step 4 of 6

    Equitable Remedies for Breach of Contract:

    The equitable remedies available for dispensation include:

    1. Rescission cancels a contract and the parties are restored to their original position.

    2. Restitution requires that both parties return whatever has been exchanged under the contract.

    3. Specific performance compels a party to perform under the terms of the agreement.

    4. Reformation of a contract rewrites the terms to reflect the parties’ true intentions.

  • Step 5 of 6

    Unilateral Mistake:

    This mistake occurs when one party to a contract errs in signing the contract through misunderstanding, misinterpreting or drawing a wrong conclusion about certain facts in the contract.

    If the mistake is substantial and enforcing the contract would be unconscionable, then it is voidable. Additionally, if the non-mistaken party should have known about the mistake, or caused the mistake, the contract is voidable.

    Mutual Mistake:

    This mistake occurs when both parties err in signing a contract through a lack of understanding all of the terms, or lack of meeting of the minds. This type of contract is voidable.

  • Step 6 of 6


    In the case Jason v. Manufacturer, a trial court would consider the facts as they were presented. The manufacturer argues that an offer to Mr. J did not exist and that the language was clear. Mr. J argued that the offer was to the general public and that the qualifying statement was misplaced.

    It is a stronger argument on the side of the car manufacturer. Mr. J would not have received the offer had he not mistakenly opened his neighbor’s mail. In addition to opening his neighbor’s mail, he intercepted an offer meant for his neighbor and deprived his neighbor of his/her rightful opportunity to accept the offer.

    Hence, the car manufacturer has the stronger argument.

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