As per the case provided, Noel has been offered to purchase a grader from Ken for $14,000. However, Noel is willing to purchase the grader for $12,000 only after it passes the mechanical inspection. After certain issues, Noel finally agreed upon the price of $14,000. The contract has been agreed upon and it is an oral contract. In this particular case, the Contract Act shall be applied. However, Ken received another acceptance from the local council for the price of $15,000.
The required elements of a contract are as follows:
A valid contract can be oral or written. As in the case provided, the contract that has been made with Noel is an oral contract
A valid contract must consist of a valid offer. As in the case provided, Ken had made an offer to Noel. An offer is the first step of a legal contract (Burrows 2009). This means that offer is a type of commitment that been communicated with the other party that contains definite terms
A valid contract must have a legal consideration. As in the case provided, the grader was being sold to Noel on the price of $14,000. Consideration is the main element of all contracts. Consideration refers to bargaining upon certain items, cash or asset or service. It is important for the consideration to be lawful
A valid contract must have an acceptance (Peden 2003). Both the parties, Noel and Ken have accepted the offer and acceptance has been made in oral form. An offer is an assent being manifested with the terms in a way required or invited after receiving the offer
A valid contract is considered legal only if the consent for acceptance has been free and not forced for making any kind of acceptance (Burrows 2009). As in the case provided, Noel had accepted the offer with free consent and had not been forced to do so