Contract law comprises regulatory provisions expressed towards enforcing the specified promises. It is basically regulated by the common law, but the major statues are aligned with the common law of contract which is in relation to consumer protection. The foremost necessity of a valid contract is an agreement which includes offer as well as acceptance, and it also comprises ‘meetings of mind’ of the two parties (Knapp, Crystal and Prince, 2016). The present report emphasises on the decision which is to be concluded in the case study of Simon in which he decides not to give a gift to Kim in against of her appointment for his show and along with the denial of pre-decided remuneration in the contract. The study will include a description of defences or remedy available to the parties associated with the contract along with the ability of Kim to sue Simon for the breach of contractual terms.
As the last season’s applicants were of poor quality and the same lowered the viewing figures of TV show; thus the American celebrity sisters (Kim, Khloe and Kourtney) is appointed on the judging panel for the TV show by CEO of his TV Production Company (Simon). It was decided between them, that American celebrity sisters will be provided with final fees of $100000 each at the end of each episode. The same was inserted in a legally binding contract by the lawyers of Simon as the same was in practice when any new contract was made by the company. Simon was aware that Kim is also assessing other business opportunities due to goodwill gesture; thus for making her more comfortable; he says that he will gift her diamond bracelet and earrings at the end of the show. However, Kim performs poorly as a judge and the same affect the comments in the press which directly affected the advertising revenue as well as viewing figures in an adverse manner. Thus, due to this Simon decides not to provide a gift to Kim and gives the bracelet to Khloe and earring to Kourtney instead. Now, as a legal adviser, it is to be decided whether Kim will be able to sue Simon as per law of contract for giving him jewellery as he promised or not.
Consideration can be specified as the price that is asked by the promisee in exchange for their promise and is necessarily required to be specified before making a contract binding. The same is saved under the agreement and made under seal (McKendrick, 2014). In the present case, the final fees of 100000 to each of Kim, Khloe and Kourtney can be said as a consideration which is required to be paid by Simon. Further, as per American contract law, it is also stated that gratuitous promises are generally not enforceable. The same can be interpreted in a manner that the promise which is made by Simon for gifting a diamond bracelet and earrings is not enforceable as the same was just said for the sake that she works comfortably.
The rights and obligation of both contractual parties are determined by the terms of the contract in case any discrepancy occurs in future. In the present case as it has been specified that Kim, Khloe and Kourtney will host the show and at the end of show Simon will pay 100000 to each. Thus the specified terms are articulated in written form in this case as generally present in major cases (Eisenberg and Miller, 2015). Once the terms relating to the contract are established, it is essential to interpret the same in an appropriate manner. Generally, the contract should be provided with the meaning which is specified by the parties of contract; in case the same is not specified in an appropriate manner; the court will do best to specify and give effect to that intention. A variety of rules and provisions have been emerged for aiding the court in this regard.
It has been specified in contract law that, for a contract to be discharged by performance it is necessary that contract obligations should be performed completely and in the same manner as specified. In the present case, it can be assessed that Kim, Khloe and Kourtney are required to host the show in an appropriate manner and on other hand Simon requires to pay the specified amount as specified in the contract (Appleman, Appleman and Holmes, 2016). It should not be sufficient to perform a contract substantially. Ascertainment of relevant level of performance depends on the proper construction of the contract which has been developed. Termination of the contract takes place through the provision specified in the contract itself or in a new contract.
A right is available to a non-breach party that in case the other party breaches the contract, he can terminate the contract for that breach. The non-breaching party might terminate the contract on the basis of a breach in case a provision of same is available in the contract, or the other party repudiates the contract, or in case the breach is the requirement of available circumstances (López, 2015).
Due to the supervening event often contracts came to an end, and cannot be controlled by parties. For instance, there is a contract among A and B, where B is ready to appoint A in the theatre on a specific night, but same has been breached because of the terrorist act as the theatre got damaged before to the agreed date for performance of the contract (Smits ed., 2017). For this aspect, case of Taylor v Caldwell (1863) 3, B & S 826 can be referred.
Application of the doctrine of frustration is made only at a certain range of situations, usually where the event provider does something essentially dissimilar in comparison of performance expected by the parties. In this case, courts seem to be cruel, if the event might have been expected and thus provided for by the parties in their contract,
The contract is ended automatically when there are chances of frustration (in future). Further, there is no choice to free at common law; due to this the loss incurred from the termination lay where it declines (Appleman, Appleman and Holmes, 2016). However; there are various exclusions to this rule such as statutory modification which means that in utmost cases the ruggedness that might consequence from that avoidance of rule of common law. This has been supported by Fair Trading Act 1999 (Vic) Part 2C
However, in the present case provisions of discharged by frustration will not be applied as the show was judged by American celebrities which were the only requirement on the contract as the manner of judging was not described (Johnson and Sohi, 2016). In addition to this, television shows based on reality are generally subjected to controversies. Thus it cannot be considered as fair justification to breach the contract or non-payment of consideration to the contractual parties.
Both Damages and liquidated claims are the common law solutions offered in a breach of contract to the aggrieved party. Damage claims are observed as an alternative intended for performance. It is intended in such a way that the applicant can perform its contract appropriately (Markovits and Schwartz, 2016). Availability of penalised damages is not there. Therefore, the loss claimed should not be far-off from contravening. Non-breaching parties must perform only which is reasonable to decrease the damages they bear.
Another solution available for the breach of contract is for debt or liquidated damages. These are only offered where a section, in the contract among the parties offers a specific amount of money which is required to be paid upon breach (Courtney and Carter, 2014). It is also offered that the amount specified excludes penalty, the non-breaching parties may be charged for this liquidated amount instead of unliquidated damages.
Debt and damages are poles apart for each other (liquidated or otherwise) in that it is engaged in an argument for a sum of money outstanding under the contract (Carter, Courtney and Tolhurst, 2017). Further, a liquidated sum, it is not in the structure of an alternative solution, but it is an argument for a particular amount outstanding under the contract.
Two major reasonable solutions for contractual breach are mentioned below:
Specific performance – It supervises the breaching party to make their contract as mentioned by the court (Markovits and Schwartz, 2016). It will be ordered only when the damages will not give sufficient return and will not be rewarded regarding the contracts of individual service.
Injunctions – These are orders supervising a party not to perform something such as, not to continue with a contractual contravene (Hogg, 2015).
Both of these mentioned remedies are open and flexible as the court is not appreciative to honour them even in the case of establishment of the breach.
Right available with Simon
In accordance with tort law relating to negligence; a legal action can be brought by a person to whom the perpetrator owed a duty of care. Thus in this case liability arises where there is a duty to take care and where a breach of similar duty has caused damage (Eisenberg and Miller, 2015). The tort consists three elements, and all of them should be established in order to be successful.
The three factors are:
In the present case, as Kim was responsible for accomplishing his role that is judging the show in an appropriate manner with all reasonable care. The second variant, ‘breach of duty’ i.e. he didn’t perform well as it was poor even after being the winner of last show. The third variant i.e. ‘damages’ even that is not too remote as it includes negative comments as well as loss of advertising revenue.
Thus on the following basis, Simon can take action in the same manner as the remedy against the case.
In the present scenario, as per the facts of the case, it can be assessed that no condition was present regarding the gift when he promised the same. Further, Simon said he would gift a diamond bracelet and earrings after the finale of the show and didn’t specify that it will be in accordance in the manner he performs or the comments of the press which has an effect on the viewing figures and advertising revenue. Thus, Kim can case against Simon for the jewellery on the following basis, and he is having right regarding the same.
Conclusion
In accordance with the present study, the conclusion can be drawn that there was an enforceable contract between parties and they were required to provide appropriate performance in order to discharge the obligation of the contract without any penalty. The present case study shows that due to the inappropriate performance of American celebrity sisters there were significant losses to shows due to which CEO is not willing to fulfil the promises. However, provisions of the law state that action of Simon is not justified as cited aspect was not mentioned in the contract. Consequently, he will be required to provide jewellery as promised in the contract. Although, he is entitled to claim remedy in tort law as due to their behaviour show had suffered losses as all key elements of the negligence of the negligence is satisfied in the given case scenario. On the basis of above-described aspects, it can be concluded that Kim in entitled to sue Simons under the law of contract for not providing jewellery in accordance with the contractual promise made by him during the contract.
References
Appleman, J.A., Appleman, J. and Holmes, E.M., 2016. Contract Concerns: Reinsurance Contract Formation, Validity, And Judicial Construction (Vol. 14). Appleman on Insurance Law and Practice.
Carter, J.W., Courtney, W. and Tolhurst, G., 2017. AN ASSIMILATED APPROACH TO DISCHARGE FOR BREACH OF CONTRACT BY DELAY.The Cambridge Law Journal, 76(1), pp.63-86
Courtney, W. and Carter, J., 2014. Debts, Liquidated Sums and the Enforcement of Claims Under Guarantees and Indemnities.
Eisenberg, T. and Miller, G.P., 2015. Damages versus specific performance: lessons from commercial contracts. Journal of Empirical Legal Studies,12(1), pp.29-69.
Hogg, M., 2015. Restitution following Termination of Contract: a Contractual or Enrichment Remedy?. Edinburgh Law Review, 19(2), pp.269-273.
Johnson, J.S. and Sohi, R.S., 2016. Understanding and resolving major contractual breaches in buyer-seller relationships: a grounded theory approach. Academy of Marketing Science. Journal, 44(2), p.185.
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2016. Problems in Contract Law: cases and materials. Wolters Kluwer Law & Business.
López, M.J.R., 2015. Obligations and remedies under a related service contract. In European Perspectives on the Common European Sales Law (pp. 225-241). Springer International Publishing.
Markovits, D. and Schwartz, A., 2016. (In) Efficient Breach of Contract.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Smits, J.M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.
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