Contracts are components of the business law Coursework Example

Business Law 1 Week 11 Discussion Question
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Abstract
One of the vital components of the business law is contracts. Whereas they help in setting grounds for proper coordination and delivery of promises, contracts demand consideration given that the participating parties must be willingly involved and not coerced. In this particular essay, a case is presented concerning an insurance company (Globe Life Insurance Company) and a potential beneficiary (Nancy Leonard). Following the knowledge of a perceived need for life insurance at Nancy Leonard’s home, Globe decides to pursue her to buy life insurance for her four children after the death of another due to drive-by shootings in Los Angeles. This paper argues that a contract existed between the two parties by Nancy having signed; however, there is no fundamental legal foundation that binds Nancy Leonard to pay the life insurance. As such, Nancy Leonard must not pay for the insurance. On the other hand, Tom Raskin’s action was unethical given the psychological status of Nancy Leonard at the time of signing the contract. In this case, the contract is voidable because there was no bargained-for-exchange between Nancy and Raskin.
Keywords: contract, consideration, promise, bargained-for-exchange
Paper
Ordinarily, contracts are a fundamental legal framework for reaching a binding agreement between two or more participating parties. However, the practicality and lawful functionality of contracts must always meet certain thresholds for them to uphold.

One such criterion is a consideration, which translates to a bargained-for-exchange or merely something of legal value (EZ Casebriefs, 2015). Irrespective of the situation, contracts are pivotal in entrenching legalities to verbal or written agreements between the parties involved. In the case presented, Globe Life Insurance Company is taking advantage of the situation to market their product to an individual who they know is in dire need. While Globe’s idea of selling their policies is within their mandate, it is important to reckon that Nancy Leonard signed the contract under mental incapacitation.
Since Nancy Lenard signed the contract, there is a vital basis for her to sue Globe. As espoused by Twomey & Jennings (2014), the agreement is considered void if one or both the parties involved are intoxicated to the degree that they do not understand that a contract is being agreed on in the first place. In this particular scenario, Globe salesman Tom Raskin came to Nancy Leonard’s home when she had just taken tranquilizers given to her by the physician to help her in handling stress and anxiety. Worse still, she used an additional dose using Coors Lite beer about an hour before Tom Raskin arrived making her intoxicated and literally out of her mind. Therefore, Nancy Leonard can argue that she was not in the right state of mind when she signed the contract.
Subsequently, Nancy Leonard did not have to pay for the life insurance because upon voiding of the contract none of the agreed is binding. In fact, Tom Raskin acted in lack of consideration for the situation and mental status of Nancy Leonard since the latter did not seem to have made a bargain towards the promise of life insurance for her four other children. However, Tom Raskin in responding to the case can argue on the principle of unilateral mistake, which then would render Nancy Leonard vulnerable to pay unless the jury unanimously quashes the contract initially or is convinced that Nancy was mentally disturbed.
Globe’s sales program is one such incentive that is opportunistic and exploitative. While they are in business, it is ethical to make their intentions known and not lure clients into signing contracts when they are not in the right state of mind. Tom Raskin should have had a moral obligation to understand Nancy Leonard before presenting to her the lucrative deal, which was poised to solve her future problem through life insurance. Nevertheless, Nancy Leonard’s uninformed decision to sign a contract under the influence of tranquilizers mixed with beer is enough grounds to argue for mental incapacitation against Tom Raskin’s unethical act.
Raskin’s decision to target Leonard just a day after her son’s death was misinformed. Just like in the case of Shurgard Storage Centers v. Lipton-U City LLC, “if a material error performed by one party is known or is expected to have been known by the other, the mistaken individual has the right to rescission (Twomey & Jennings, 2014).” In this case, Nancy Leonard’s mistake of taking an additional tranquilizer using beer should have been known by Raskin. In essence, Tom Raskin needed to have known the mental situation of Nancy Leonard before asking her to sign the contract. In sum, Leonard has the upper hand in the legal considerations of this case as she did not foresee the benefits of the promise by Globe’s policy insurance due to over anxiety and stress.
References
Twomey, D.P. & Jennings, M.M. (2014). Anderson’s Business Law and The Legal Environment Comprehensive Volume (22nd Ed). Boston, MA: Cengage Learning.
EZ Casebriefs (2015, Sep 7). What is Consideration? (Contracts). YouTube. Retrieved on 17th March 2018 from https://www.youtube.com/watch?v=hmdW_95r2jI