ilyas and khan visit the local car dealership because they are interested in buying a new car. The car they currently have is aging and is starting to have mechanical problems. Jim and Laura would share the new car, and use it to go back and forth to work and school. Before going to the dealership, Jim and Laura decide that they can only afford $400.00 a month in car payments.

Once at the car dealership, ilyas and khan meet Sam Salesman. Sam shows them several vehicles and ilyas and khan test-drive several of the cars. ilyas and khan particularly like the blue 4-door sedan. Therefore, they agree to give Sam Salesman a $100.00 deposit to hold the car for a day. Sam Salesman does not give them the receipt but guarantees that the $100.00 is refundable. No documents were signed.

The next day, Sam Salesman calls ilyas and khan to ask them when they would like to take delivery of the car. ilyas and khan, on the way home from the dealership, decided that they were not going to buy the car because they did not want to spend that money each month. Therefore, ilyas and khan tell Sam salesman that they have decided not to buy the car and request their $100.00 deposit back.

Sam insists that the $100.00 was a deposit on the car and was meant to be part of the contract to buy the car. Sam is very persistent and insistent that ilyas and khan have contracted to buy the car; therefore, the $100.00 will be applied to the purchase price of the car. ilyas and khan are shocked and angry as not only do they not want to spend the money, but now feel as though they are being duped by Sam Salesman .ilyas and khan have an appointment to see a lawyer in a few days, but know you are a student taking a business law class and come to you for advice. They are very frazzled, and understandably upset that they may have just purchased a car. Since you have been taking business law, you have read and understand the elements of a contract and the defenses to a contract. Therefore, although you are not a lawyer, you provide some basic advice from what you've learned in your business law class.

In three to five (3-5) pages, advise Jim and Laura based on the above facts as presented, the material provided in the text, and material covered in the lecture. In your paper, be sure to address the following:

Define the elements of a legal contract using examples from the scenario where applicable.

Decide whether or not there was a contract for the purchase of the automobile.

Identify the facts from the scenario which support your decision on whether or not a contract exists for the purchase of the automobile.