Alexandra, a young entrepreneur, received an e-mail from her close college friend, Nicholas, that a relative had died and Nicholas had inherited some money. Nicholas wanted to contribute $50,000 in financing to help Alexandra launch her business. Because Nicholas had always come through for her in the past, she proceeded that day to acquire a lease on office space and purchased desperately needed equipment. She also hired an assistant. All total, she spent $40,000, keeping $10,000 in reserve. She then sent Nicholas an e-mail thanking him for his gracious offer and expressing how much she needed the money. She detailed all of her expenditures and expressed that she could have never progressed so quickly without his help. However, the money never arrived because Nicholas sent her the e-mail as revenge for taking his idea for a business. There never was $50,000. 1. Was there a contract?
Alexandra, a young entrepreneur, received an e-mail from her close college friend, Nicholas, that a relative had died and Nicholas had inherited some money. Nicholas wanted to contribute $50,000 in financing to help Alexandra launch her business. Because Nicholas had always come through for her in the past, she proceeded that day to acquire a lease on office space and purchased desperately needed equipment. She also hired an assistant. All total, she spent $40,000, keeping $10,000 in reserve. She then sent Nicholas an e-mail thanking him for his gracious offer and expressing how much she needed the money. She detailed all of her expenditures and expressed that she could have never progressed so quickly without his help. However, the money never arrived because Nicholas sent her the e-mail as revenge for taking his idea for a business. There never was $50,000.
1. Was there a contract?
The fundamental aspect of a contract is that there needs to be a legal intention to enter into a contract and that the contract has to have a consideration for both the parties. Consideration simply means any incentive for the promisor as well as the promisee to enter into the contract. In simple terms, what each party is getting out of the agreement. Without consideration, the agreement never attains the status of a contract.
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