What Is A Contract? (1948)

[Music] Tom Darcy and Ed cing are both looking for jobs for the summer Tom wants extra money to buy things he'll need if he can start college this fall Ed wants to earn enough to trade in his old car when he goes back to college for his last year all right there's the proposition and it's a good one what do you say can you start a week from Monday Mr Bailey $35 a week in car expenses isn't very much money we've been offered 40 a week at another job but it may not last all summer all right maybe five or 6 weeks at 40 but with me you can be sure working the 12 P weeks of vacation making 35 a week for easy work Distributing these samples figure it out for yourself whenever persons must rely on each other there is occasion for agreements and contracts people must agree they must have Assurance to make plans as individuals and as groups by the simple Act of nodding their head accepting Mr Bailey's proposal Ed and Tom have made an oral contract agreeing to distribute samples of a new breakfast food in exchange for $35 a week for a contract is any agreement that is enforcable by law to be enforcable an agreement must contain the basic elements of a contract the first of these elements is mutual Ascent free intentional agreement by all parties to the same proposal a second element is known as competent parties the Contracting parties must be legally responsible San adults are generally considered to be legally competent Mr Bailey and Ed are in this class Tom who is under 21 is not an adult he may not be considered legally competent but Mr Bailey employed him nevertheless a third element is legal bargain the agreement is in no way contrary to the law an agreement to steal or defraud is not considered as binding for its performance would be a violation of the law another element a contract must possess is consideration the services or payments or the promises of services or payments exchanged Mr Bailey promises to pay each boy $35 a week plus car expenses for air the boys promise to distribute samples of the breakfast food and so this oral agreement includes Mutual asent of competent parties concerning a legal bargain for consideration and it seems to be a contract Ed feels that on the strength of the income from the new job he can go ahead with his plans to trade in his old car and he really needs a better car a closed model for one thing and one that won't break down every other day too in order to do this new job with Tom yes Ed wants that car this type of transaction usually takes a written contract which leaves less room for misunderstanding and forgetting in general agreements involving large sums or long periods of time must be in written form to be enforcable besides those elements mentioned this agreement must be in required form a written contract generally consists of the preliminaries the body and the conclusion the preliminaries include the place date and names of the Contracting parties Ed wants to read carefully the second part which includes the fine print that some people skim over as unimportant the body of the contract is a statement of the undertakings of the parties and the consideration involved this newer car is just what Ed wants but Ed had better read that fine print carefully for he will find in this type of contract the conditional sale agreement title shall not pass to buyer until the entire purchase price is paid the third part of the contract is the conclusion a statement of the date and the fact of signing and the signatures of the principal and Witnesses sometimes for the enforcement of an agreement witnessing is necessary in any case it is desirable there is a completed contract in written form and it contains all the basic elements of a legally enforceable agreement a camera is one of the things Tom wants to take to college with him he has found one that he can buy on the installment plan for $10 down and $5 a week for 10 weeks here also the purchase involves a conditional sale contract similar to the one Ed signed when he bought the car but Tom is not yet 21 so he is not ordinarily considered a legally competent party if only a minor signed as the buyer the agreement would not satisfy the company Tom as a minor could nullify the agreement if he so desired therefore an adult must sign as the responsible party so the purchase agreement will contain the necessary basic elements of a contract so Ed and Tom worked hard received their checks and paid on their installment contracts until and that's the story boys I'm sorry but the red flash delivery service will distribute the rest of these samples much cheaper than it's been costing us to do it ourselves we intend to give them the contract finish the job but Mr Bailey you promised us 10 weeks work that's why we took the job with you instead of the other one we still have 4 weeks to go it's too late in the summer to get another job now I'm sorry boys but business is business you know how these things are I'd like to keep you on but I can't afford to it's unfortunate for Tom and Ed losing their jobs in the middle of the summer now Ed can't afford to keep up the payments on the car he wants more time and smaller payments unless he can arrange this it will be costly for Ed he knows that he made certain commitments or promises when he signed that contract upon default of a payment the entire price at that time remaining due shall become due and payable if Ed defaults on his payments he fails to make good his promise and remember the contract also states in the event of default the seller without notice may take possession of the property and retain all payments made as damages for use and depreciation costs of retaking the car storage and resale Ed may lose his old car his new car and all payments made when the installment comes due next week and Tom's father will have to make the payments on that camera both boys feel that their carefully made plans have exploded and all because they have been treated unfairly by Mr Bailey yet they did have contract 6 weeks ago Mr Bailey made an oral contract with them which supposedly guaranteed them 10 weeks work if Mr Bailey doesn't carry out his part Ed and Tom May default on their written contracts perhaps they ought to get advice Ed thinks he'll call Mr Hayes the family lawyer that's right Mr Hayes we'll be there yes sir the ABC advertising company at 3:00 sharp thanks Mr Hayes he says to meet him at Mr Bailey's office Mr Hayes has the facts of the case by now and he believ that Mr Bailey is trying to put something over on Ed and Tom because they're just young boys but Ed is 21 and considered an adult and although Tom is a minor and may be able to avoid the agreement any adult making a contract with a minor is still held responsible if the minor should desire it doesn't Mr Bailey have a legal responsibility as well as a moral one to carry out his part of the contract Mr Bailey is calling his own lawyer who can advise Mr Bailey only if he knows whether the agreement contain the basic elements of a contract Mutual Ascent which means that the Contracting parties freely agree competent parties meaning sane adults generally legal bargain there is no violation of the law consideration the exchange of payments or promises in some cases there is a required form for contracts but not this one any lawyer would advise Mr Bailey to carry out that agreement that of course means that Ed and Tom can carry out their contracts for the camera and the car always understand a contract whether it be oral or written and you will be able to make plans and carry them out exactly what a contract should help you do [Music]