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Business Management Affairs: Contract Law Report


Introduction

The English Contract Law is considered to be very unique due because it relies on the Common law. As such, there are noticeable differences between the English Contract Law and contract laws from other countries. Simons TV wishes to enter into a contract with the four judges and the contact in question needs to be invoked in a UK court. Owing to the unique nature of the English Contract Law, Simons TV needs to act in good faith and avoid any legal conflict that might arise during this period. This report highlights the requirements and content of the contract, as well as the consequences for breach of contract by the judges.

Requirements And Contents Of The Contract

Due to the increased influence and significance of transnational law, contracts under the English contract law needs to be established in good faith (Sims 2004). Under the English Law, in order for a contract to be considered legally binding, an agreement has to be reached. This is often achieved in three phases and they include acceptance, the offer, and the invitation to treat. However, they do not have to be administered in that order. Legal experts understand that the distinction between these three stages is not usually clear-cut. Owing to the lack of a clear-cut distinction, the three phases often conflict with each other.

In order to avoid such conflicts, it is important to indicate when the contract becomes legally binding, and when a legally binding offer was made. Approaching the four celebrities for the possibility of their inclusion as judges should not be considered as an offer but as an invitation to treat since the move is intended to enter them into negotiations for a contract (Young 2010; Out-Law 2008). Since Simon has already had preliminary talks with the four celebrities who have all shown interest in the job, it is important to indicate that an invitation to treat has successfully been issued.

The next phase involves making an offer. This is a very crucial stage and Simon’s lawyers need to identify the best way to make the offer. The scenario does not involve selling goods but it involves offering services. As such, Simon should avoid making an informal offer. In this case, a formal offer has to be made through a written document. The most appropriate way to make an offer is through a letter addressed to each of the four celebrities. Additionally, the contract should not be a collective agreement but only a legally binding agreement to the extent that the individual contractee is involved (Direct Gov 2011). The letter must also state clearly the intentions of the contract in order to establish legal relations and the point at which the offer (contract) becomes legally binding.

Additionally, the letter must also constitute terms of business, and also indicate that accepting the letter does not involve accepting the offer. This is important in order to allow for further negotiations and counter offers before the actual contract is signed. It must be established within the contract how the acceptance is to be made, if at all it is to remain legally binding. In this case, acceptance should become legally binding once each judge has signed the contract. There are certain instances in which the time between the offer and acceptance creates legal loopholes. In this case, it is important to issue an explicit statement on the time the offer lapses. To avoid such problems, the offering letter must explicitly state the duration of the offer, after which the celebrities must either accept or reject the offer. This implies that acceptance can only be made as long as the offer is still open, so that it can be legally binding (A4ID n.d.).

Under the English Law, a consideration is usually a necessary requirement if a contract is to be binding. In this case, consideration should be on the value attached to the business relationship. The judges should that they will offer sufficient services. For this promise to be considered as having contractual force, something valuable (in this case, financial compensation) is required (A4ID n.d; Atiyah 2000). However, the consideration should not interfere with the bargaining process between Simon and the judges (A4ID n.d.).

It is also important to identify how the contract is brought to an end. There are four basic ways of ending a contract and they include expiration, termination, vitiation, and, frustration (A4ID n.d.). The contract should spell out clearly the expiry date and in this case, it should be come after a specific time following the end of the reality show. Secondly, termination may occur when either of the parties breaches the terms of contract. The contract must express what constitutes a breach of contract and how the termination is to be made. Additionally, the contract should express the rights of parties to terminate the contract upon refusal to perform (repudiation), when the parties are disabled and hence unable to perform, or when the parties fail (due to incapacity) to perform. Vitiation involves a scenario in which a mistake, misrepresentation or omission of a fact is noted after the contract is made. Thus, the contract must offer remedies either through rescission, indemnity, or payment of damages. Lastly, the doctrine of frustration stipulates that when there are instances when unforeseen occurrences make it impossible to execute the contract, the parties have the right to terminate the contact. Since it is impossible to foretell these circumstances, the contract must therefore express what should not lead to frustration (Young 2010). In this case, the contract needs to express the fact that frustration does not include breach of contract, fault, or weaknesses by one of the parties. It is important for all parties to note that the doctrine cannot be invoked when one of the parties made a bad bargain (A4ID n.d.).

The type of business engagement involving Simon TV and the four celebrities is likely to cause injuries and/or loss to either of the parties. These injuries are likely to emanate from poor performance or breach of contract. In this case, the contract should contain a detailed clause that stipulates the potential types of injuries and/or loss and the remedies for each of them. The clause should be made in such a way that damages are based on losses made and not the gains made from the injuries. This contract also needs to include an injunction clause that restrains any of the parties from committing a breach of contract in case of a dispute (A4ID n.d.).

Much of the conflict in the contract can however, be avoided through the two types of contract terms. Express terms involves the terms of agreement and in this case it includes the remuneration, compensation, tasks for each judge, contract duration, and working hours, among others. The terms involved in this agreement must be taken in the conventional meaning, unless there is valid reason for the use of unconventional means (A4ID n.d.). Secondly, there are other terms which are implied, by fact, by law, or by custom. Either way, these terms can act as grounds for conflict. To avoid such conflict, implied terms should be appendixed in the contract, and their implications agreed upon by the parties before signing the contract. The intake implied terms may involve the conduct of the judges during the entire duration of the show. Simon TV trusts the judges to act in a manner that is not likely to sabotage the integrity of the show. In this case, implications of such terms need to be appendixed.

Consequences Of Judges’ Breach Of Contract

As stipulated earlier, the contract needs to have remedies for breach of contract. There are two principle parties involved; Simons TV and each of the four judges. In this case, what would be the consequences should the judges breach the contact? To avoid draconian consequences on the judges, it is imperative to follow the common norm which involves taking a 10% percent of the judge’s contract worth as deposit to be forfeit should the judge breach contract. This consequence will be accompanied by rescinding of the contract (Ilex n.d.). In case the breach of the contract results in massive losses for the TV Company, the judges will be compelled to pay the cost of damages incurred. Of course, if the contract is substantially performed, the judges could only be required to pay the difference between the gains made and the cost of correction (Peel and Treitel, 2011).

Conclusion

Although the contract in question is based on the English contract law, all parties involved should understand their specific rights, duties, and responsibilities. A good contract operates without seeking legal redress. As such, by understanding the rights, duties and responsibilities, Simon TV and each of the four judges need to furnish themselves with relevant details that necessitate the performance of the contract.

Reference List

Atiyah P 2000, An Introduction to the Law of Contract, Clarendon, London.

A4ID. n.d., Basic principles of English contract law. 2011. Web.

Direct Gov. 2011., Employment contract terms. Web.

Ilex. n.d., Contract law. 2011. Web.

Out-Law., 2008. . Web.

Peel, E, & Treitel, G 2011, Treitel on the Law of Contract, Sweet and Maxwell, London

Sims, V 2004. Good faith in English contract law: of triggers and concentric circles. Web.

Young, M 2010, Contract law: the basics. Routledge, London.

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IvyPanda. (2020, May 28). Business Management Affairs: Contract Law. Retrieved from https://ivypanda.com/essays/business-management-affairs-contract-law/

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IvyPanda. "Business Management Affairs: Contract Law." May 28, 2020. https://ivypanda.com/essays/business-management-affairs-contract-law/.

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IvyPanda. 2020. "Business Management Affairs: Contract Law." May 28, 2020. https://ivypanda.com/essays/business-management-affairs-contract-law/.

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IvyPanda. (2020) 'Business Management Affairs: Contract Law'. 28 May.

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