IMPORTANT NOTE!

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1. Is there a legal contract between Jack and Jill? Yes, Is there a legal contract (legally enforceable promise) between Jack and Jill. Here are the four elements of contract, (1) Mutual assent (i.e., offer and acceptance) the offer was made by Jack was accepted by Jill, Chapter 9 "The Agreement" (2) Real assent (no duress, undue influence, misrepresentation, mistake, or incapacity) both were fully aware of the agreements, Chapter 10 "Real Assent" (3) Consideration, both parties promise to perform the exchange of loan and payment. Chapter 11 "Consideration" (4) Legality, nothing was illegal about the contract between the parties. Chapter 12 "Legality" (Chapter 8, 8.1 General Perspectives on Contracts). Loan agreements are beneficial for borrowers and lenders for many reasons. Namely, this legally binding agreement protects both of their interests if one party fails to honor the agreement. Aside from that, a loan agreement helps a lender because it: Legally enforces a borrower's promise to pay back the money owed. Furthermore, according to Lucy v. Zehmer, (Chapter 9 The Agreement, 9.4 Cases) the Virginia Supreme Court ruled that an agreement formed on a napkin might be considered a legal contract if the parties were both sane and demonstrated mutual assent and consideration in their decision-making process. Also, in understanding contracts for the reason of instituting if a binding agreement occurs courts commonly employ "objective standards" which is (outwardly, as an observer would interpret; not subjectively). (Chapter 9 The Agreement, 9.1The Agreement in General) 2. Is this an implied contract or an expressed contract? If a contract exists at all, it is very certainly an expressed contract. An express contract is one in which the terms are spelled out directly. The parties to an express contract, whether it is written or oral, are conscious that they are making an enforceable agreement. (Chapter 8, 8.3 Basic Taxonomy of Contracts) For example, the agreement to pay Jack with interest after two months is an express contract. In this scenario, the contract would be founded on the fact that Jack loaned money to Jill with the clear exceptions that she would pay it back. 3. When does the contract become an enforceable contract? The agreement between Jack and Jill would constitute a mutual assent in this case. "The garden-variety contract is one in which the parties make mutual promises. Each is both promisor and promisee; that is, each pledges to do something and each is the recipient of such a pledge." (Chapter 53 Contracts) When Jill fails to return the money she borrowed from Jack, the contract becomes enforceable. After that, Jack would have the option of suing for compensatory damages "paid to directly compensate the nonbreaching party for the value of what was not done or performed" (Chapter 16, 16.3 Legal Remedies: Damages) to recover the lost funds. It is possible for a court to uphold a contract that is enforceable by law. When one party fails to fulfill their contractual responsibilities, the contract becomes enforceable.