Elements of a Binding Contract

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The elements in each case will be evaluated against the standard of contract validity.Question 1. In Chong vs. Lee, the first and foremost finding is that a contract never existed. Their agreement fails in every way to meet the legal definition of a contract because of fundamental defects, so there was no contractual agreement to breach or sue to enforce.Way Lee offered to sell five reconditioned motorbikes to Chong for a set price, but Chong didn’t accept Lee’s offer. he deferred his answer indefinitely, saying he would think about it. No contractual agreement was created at that time because there was an offer but no acceptance and both elements must be present to create a valid contract.When Chong wrote to Lee a week later, he included additional sale conditions, specifically regarding painting the bikes. No contractual agreement was achieved in this instance, either. By changing the terms of Lee’s original offer, Chong was effectively making a counteroffer, and implicit in a counteroffer is a declination of the original offer, which then ceases to exist (Graw, 2002).The Postal Rule states that an acceptance is considered conveyed and takes effect at the time it is deposited in a valid postal receptacle or given to a legitimate postal worker properly prepared for posting. A contract would have been formed even if the letter had never been received by the other party. See Adams v. Lindsell (1818). But that rule would not apply here, the main reason being that the letter Chong posted was not a simple acceptance of the original offer, but a counteroffer and Lee could not have been presumed to have agreed to it without any knowledge of it.Even if Chong’s letter had been a simple acceptance of the original offer, a question would have arisen as to whether Lee had intended his original offer to Chong to remain good for a week or whether such a length of time would be deemed reasonable by a judge.