Module Number
This paper deals with the aspects of valid contract, and their relevant to Simon and a music band. It advises Simon on how to secure a valid contract under English Law and the consequences/remedies in the event of the contractual terms being breached. Among others, the paper advises that Simon should check the contract between the TV Show and No Direction comprises of an offer, an acceptance, a consideration and intention to create legal relations.
A valid and enforceable contract requires five critical elements to be satisfied: intention to enter a legal relationship; agreement (or offer and acceptance); a consideration; legality; and capacity. An offer may be express or implicit, but should express a party’s willingness to be bound by certain specific terms upon acceptance by the offeree. It may be bilateral or unilateral. An offer must set out clear terms of the said contract that will become binding if accepted by the intended party. In Carlill v Carbolic Smoke Ball Co. (1893), the court held that even tentative and unilateral offers become binding once accepted in a valid way. Upon communicating an offer to the offeree, they must agree to the said terms in order to create a contract.
According to Branco v Corbarro (1947) and Hyde v Wrench (1840), an acceptance is an unconditional, certain, and full agreement to the terms set out in the offer. It must be a mirror image of the terms of the offer. Any changes, conditions, or reservations thereof, amount to the rejection of the initial offer, and venturing of a new offer. Further, an acceptance must be communicated to the offeree in the right/intended manner or through performance. The intention to create a comemrcial relationship must exist, and is mostly presumed in non-domestic relationships. Further, a bargain, or consideration, which does not need to be commensurate or reasonable must be offered to give force to the contract. A consideration is not the same as a promise of affection. It is a benefit and/or detriment by each of the parties. A unilateral promise that is not backed by a consideration is legally considered a gift. The capacity to contract is predicated on the parties being of an age of majority and sane, while the contracts to be entered into must not be illegal.
In Simon’s case, it is critical that he contacts the individual parties and/or their agents who have the capacity to form a contract that is individually or collectively binding to all the band members. If One Direction does not have an agent/manager with the power to contract, then he must contact all band members individually. Secondly, Simon needs to expressly (preferable but it may be implied) ask the band members/agent(s) to perform at the said show’s finale for a consideration of £250,000. He must secure their agreement to these terms. The intention to business is not clear on the part of the band, and Simon needs to secure it too, by making certain there is a mutual understanding by all the parties that the show finale is commercially important for the TV show, and the band’s participation thereon, will further that interest. It is advisable that Simon secures a written contract to difficulties at the enforcement stage.
Remedies/Consequences of Breaching Contract
The contract is made with and is enforceable against all the band members, because they perform together, and thus the failure of one of the band members to perform amounts to a breach of the agreement. The consequences may include one or all the following: damages, specific performance, injunctions, repudiation, and rescission. If it become apparent before the show that one band member is unwilling to perform, Simon may seek a court order forcing Payne to perform. As an equitable remedy, specific performance seeks to ensure contractual parties fail to perform their end of the contract to do so, but courts hesitate at forcing unwilling parties to fulfill their obligations except in situations where other remedies are unlikely to be adequate (Nutbrown v Thornton, 1805). A mandatory injunction preventing Payne from leaving the band without fulfilling the terms of the agreement will also have the same effect.
The failure of Payne and/or the band to perform at the show may also render them liable to pay damages to the injured party as a result of the loss of viewership and advertising revenues for the finale. The award of damages, especially in cases where they are not expressly provided for in the contract, is subject to the rules of causation, remoteness, and loss minimization. According to Statsky (2011), the innocent party must demonstrate that they incurred an injury (favorable viewer ratings and advertising revenue loss) caused by the band/Payne’s failure to perform. A court needs to satisfy itself that on abalance of probabilities, the injury could not have occurred but for the defenadant(s)’ unreasonable actions. Secondly, the financial injury sustained must have been caused as a natural/expected consequence of the breach of the agreement (remoteness). Lastly, the damages may only if, and to the extent that the aggrieved party did all they could to mitigate the injury resulting from the contractual breach. For instance, if the band could perform without Payne then they should be let to, and/or if it is not possible, then Simon should have sought other suitable musicians to fill the slot (assuming there was time to). Upon considering these factors and the specific circumstances of the case, the court may award damages. Further, reneging on the agreement may lead to Simon repudiating the contract all together by withholding the consideration (Statsky, 2011; Debre & Amritpal, 2015).
References
Balfour v Balfour , 2 KB 571, 1919.
Branco v Corbarro , 2 All ER 101, 1947.
Carlill v Carbolic Smoke Ball co, 1 QB 256, 1893.
Chester v Afshar, 3 WLR 927, 2004.
Debre, J., & Amritpal, S., 2015, Legal Aspects of Responsible Leadership. Essex: Pearson Education Limited.
Hyde v Wrench, 49 ER 132 (1840).
Nutbrown v Thornton , 10 Ves 159 (1805).
Statsky, W., 2011, Essentials of Torts. London: Cengage Learning.
