Juan entered in an oral contract to buy Luke’s vacant building for $50,000. He gave Luke a $5,000deposit. They intended to reduce their agreement to a wri±en contract la±er. Pursuant to theiroral agreement, Juan took possession of the building and spent $30,000 making improvementsso that it would be capable of being rented to the public. Due to rise in the value of similarproper²es, Luke served Juan with a no²ce to vacate the building. Luke contends that the oralcontract is unenforceable and that Juan must vacate the building. Is Luke correct?

Answer:

In most cases when it comes to the process of enforcing an oral contract it might not be simple but with the status of fraud then it enforceability becomes very simple. In the case of Luke and Juan, the contract is very enforceable. First is the deposit which Juan give to Luke. In this case, the 3500 dollars which were given out will act as the legal sign of commitment. The deposit was made after an agreement was reached between the two parties (McKendrick, 2014). Under the provisions of the status of fraud, an agreement is reached in circumstances where a deposit is paid, and it will act as the component showing the agreement. In the case, one partner wants to make the deal unreal it will be regarded as the status of fraud by the party. In this case, even Juan had gone to the extent of making improvements to the building which means that he had spent some money. The improvement would only be made of there was something which guided the operation. In this case, the guiding is the oral contract in the process. It is these two components that make Juan and Luke have a contract that is enforceable.