Executive SummaryThis report analyses the city of Bigtown's mayor's idea of auctioning off Bigtown as an advertising campaign, with the case study of the John Leonard vs. Pepsi case.
Four Elements of a Valid ContractThere are four basic elements of a legal contract that make enforceable, which are lawful object, contractual capacity, consideration, and agreement. According to the In Collins Dictionary of Economics, "a contract is a legally enforceable agreement between two or more people or firms generally relating to a transaction for the purchase or sale of goods and services" (Lowe, 2006). The agreement portion of a legal contract states that there must be an understanding between both the offeror and offeree to enter into a bargain. This entails an offer to be made from the offeror and an acceptance of the offer from the offeree. The consideration is a very important element of a legal contract. A consideration may have a benefit to the offeror or a possible loss to the offeree.
A consideration may have some profit, benefit or rights that add to one party and are taken away form the other. Contractual capacity is the lowest possible mental capacity necessary to go into a valid contract that is enforceable legally. The law recognizes that the there is three types of people who are not recognized to have enough mental capacity to be held legally to their contracts. These people are incompetent people, mentally impaired people and minors. The legal objective element of a legal contract has to have a legal purpose. Any contract that has a purpose for which illegal intent is to take place is not regarded as a legal or enforceable contract (Texas Tomorrow Fund, 2006).
Objective Theory of ContractsAccording to the author of Contemporary Business and Online Commerce Law (Cheeseman, 2006) "the objective...