Your real estate development company enters into an oral purchase agreement with the owner of land that contains several barns located out in the country. Your plan is to raze the barns and build a strip mall. One of the barns contains various construction equipment. You also verbally agree to purchase the equipment for $2,000, along with paying off any associated debt. You deliver a check to the land owner for the price of the land and the barns. In return you receive a deed to the land along with a note that says, "happy you are taking that equipment off my hands!" After starting demolition of the barns, you decide that you will no longer need the construction equipment. Where do you stand with the deal?

Explanation:

An agreement becomes a contract that will be enforceable in a court of law only if the vital elements of a contract are present in the said agreement. The Vital elements of a valid contract are as below:-

1) Offer and Acceptance:- There should be an offer that is properly communicated to the offeree. When the person to whom the offer is made signifies his consent, the proposal is said to be accepted. Persons may enter into contracts when they are: face to face; over the telephone or through post office courier service etc. When persons are face to face, one person making the offer and the other accepting, the contract comes into existence immediately. The communication of revocation is complete

-as against the person who makes it:- When the communication of revocation is put into a route of transmission to the person to whom the revocation is made, to be out of the power of the person who makes the revocation.

-as against the person to whom it is made:- When the revocation comes to the awareness of the person to whom it is made.

Conclusively, a contract is an oral or written agreement that could be enforceable by law. However, in case of an agreement; it could be similar but not binding in the perceptions of the law.

When agreement becomes formal and binding, it takes the shape of a contract.

Other essentials shall include:

2) Intention to create a legal relationship

3) Possibility of performance

4) The capacity of the parties to contract

5) Free Consent

6) The legality of object and Consideration

7) Certainty of meaning

8) It is not expressly declared to be void

9) Necessary legal formalities

10) Consideration

Accordingly, if a contract meets the above criteria, it could be said to be legally binding even if it is oral. If my Company has agreed to buy the equipment, it is to be noted that the offer is already accepted and even approved by the other party by writing a ‘Thanking note’ in return. Therefore, the entire agreement is legally enforceable and I do need to perform my part of the deal to avoid any legal complications. My silence to the acknowledgment letter presented by the other party shall also deem that I am willing to purchase that equipment and hence cannot reverse the same until the retraction is accepted by the other party as well. This is the primary essential of any valid contract, as explained above.

answer; rapid growth in buyer demand and high buyer switching cost;