Question

Sue Sandon and Joe Rhine have concluded their agreement in all substantial matters of their contract for goods, such as price, quantity, and mode of delivery, but the formal written agreement has not been signed yet. Is there a binding contract at present?

A) Yes, there is a binding contract.
B) No, a written agreement is necessary.
C) Only if there is a witness present.
D) It depends on the jurisdiction.

Answer 1

The existence of a binding contract between Sue Sandon and Joe Rhine without a written agreement depends on the jurisdiction and law that applies to the contract. If the essential elements of a contract are met and the contract type does not require writing under the law, then a legally binding contract can exist without a formal document.

Step-by-step explanation:

Whether Sue Sandon and Joe Rhine have a binding contract without a formal written agreement depends on the jurisdiction and specific subject matter of the contract. In many cases under the common law system, a contract does not need to be in writing to be enforceable if it involves the sale of goods, as the Statute of Frauds does have exceptions, particularly under the Uniform Commercial Code (UCC) which governs commercial transactions in the United States.

However, certain other contracts, such as those involving real estate or that cannot be performed within a year, typically must be in writing. If the essential elements of a contract (offer, acceptance, consideration, and mutual intent to be bound) are present and if the agreement falls within the types of contracts that do not require a written document under the relevant law, then there is a binding contract between the parties. Therefore, the correct answer to whether there is a binding contract is D) It depends on the jurisdiction.