Describe about the Questions on Law for Remedies and Costs.
A contract is a promise or set of promises between two parties whereby one party promises to do something in exchange of receiving consideration from the other party. Such consideration has to have an economic value (Treitel and Peel, 2015). This creates a legally binding contract between the two parties. Such contract is enforceable by law.
A contract can be in two forms, a written and an oral (Department of State Development, 2016). A written contract is such an agreement where all the terms are written and signed by the parties. An oral contract however, does not have any such writings. It is a mere exchange of binding words which are enforceable by law. An agreement, whether written or oral, has to be followed as per the terms.
A contract has certain elements and these include capacity, intention, certainty, consideration, offer and acceptance (Jacobs, 1985). First and foremost, an offer has to be made for a contract and then such contract has to be clearly accepted by the other party. A mere counter offer does not form an acceptance. A contract has to involve a consideration of economic value (Carter, 2007). Most importantly, an intention to enter into the contract has to be present in the parties otherwise the whole purpose of a contract is lost. The parties to the contract have to be of contractual capability. And lastly, a certainty regarding the terms of the contract is essential to form an enforceable contract.
In the present case, Richard and his father entered into an agreement whereby Richard had to mow the family property and ‘do a bit’ to keep the gardens tidy. In return, a consideration of $200 was fixed which was to be paid by Richard’s father. The previous garden contractor was paid $350 for the same job. But this does not invalidate the consideration fixed in this case. The parties to contract are free to fix the consideration between them, as long as it has an economic value. So, in this case, an offer was made, an acceptance was attained and a proper consideration was set making this an enforceable contract (The Law Handbook, 2015).
An intention to enter into the contract was present between the parties at the time of formation of the contract (Frey and Frey, 2005). A certainty regarding the terms of the contract was also present. So, this whole agreement was a valid and legally enforceable contract between Richard and his father.
After four weeks, Richard’s father told him that he cannot afford to pay Richard $200 a week. He further stated that as a family, it was Richard’s responsibility to tend the garden and also, that Richard he getting free board and lodging.
Family agreements are usually not taken as legally binding. But where clear evidence is present to the contrary, such agreements are binding. In the famous case of Errignton V Errignton, it was held that a father’s promise to allow his daughter in law and son to live in the house and ultimately own it, if the balance of mortgage was paid, was considered as an enforceable contract (Australian Contract Law, 2010). Applying the judgment of this case in the matter of Richard and his father, the agreement between them was an enforceable contract.
When a party goes back on its promise, upon which the contract was based, and the consequences of such, result in material harm to the other party, the aggrieved party can claim damages by reasons of breach of contract. Here, Richard was an impoverished university student and his father was a millionaire. If Richard had not worked for his father, he would have been working somewhere else and earning money. Richard was not rich like his father and needed the money as it was his source of income.
This can be further explained by taking the case where the garden contractor was still working for Richard’s father. If the said garden contractor was still working in the garden and doing tasks which Richard is now doing as per the agreement, Richard’s father would have paid him $350 per week. This amount was nearly double to what Richard’s father was paying to Richard. It does not matter that Richard’s father was providing Richard free boarding and lodging. Had Richard not been doing the garden tending activities, he would still have received such boarding and lodging. So, this does not affect the agreement made between Richard and his father in any way.
The agreement between Richard and his father was made for a particular purpose of tending the garden. The agreement nowhere stated that free boarding and lodging would be provided in exchange of this work. Such terms were also not present in the agreement between Richard’s father and the garden contractor. This further strengthens the fact that free boarding and lodging was not part of the agreement.
In this case, Richard has discharged his part of the agreement by performing the terms of contract. But on Richard’s father part, a breach of contract occurred. And so, Richard is eligible to damages as a result of material breach of contract. Damages for breach of contract are viewed as an alternative for performance. Here, the loss of consideration is material in nature and hence, Richard would be successful if he sued his father for a breach of contract. He can claim damages of consideration and apart from that he is also eligible for the mental distress this whole incident caused (Australian Law Reform Commission, 2016). Further, Richard has the right to terminate this contract.
There is enough evidence in the present case to prove that an enforceable contract was formed. And by not following the terms of the contract, Richard’s father has established a breach of contract. And the legal remedies’ regarding such breach is a viable legal option available with Richard.
2. When an actor is hired for any acting job, they are usually required to sign a contract with the employer. This establishes the terms of contract clearly and removes any chances of ambiguity in the contract. Such acting contracts contain the employment terms, the dates and hours, compensation, exclusivity, merchandising and promotion and publicity services (Atkinson, 2013).
An exclusivity term in the contract limits the actor’s right to engage in any other acting employment. This can include a prohibition from appearing in other productions during or even after a certain period of time. This term is a standard form in acting contracts and is considered valid. Further, exclusivity is not considered as a restriction to trade and commerce.
When a party to a contract, fails to perform the terms of the contract, it is the case of breach of a contract by such party (Lindgren, 2011). A contract can be breached by reasons of failure to perform or failure to pay or violation of some other term of contract which is of material significance. In other words, the basis on which the contract is made, a promise, is not fulfilled or broken.
A breach can be partial or material or even anticipatory. A partial breach is a failure to perform those tasks which are negligible or immaterial. Unless actual damage is shown, a party cannot sue the other party. In cases of material breach of contract, a major violation of significant terms of contract takes place. A material breach of contract can relieve an aggrieved party from performing his part of contract and gives him definitive right to sue for damages (Gibson and Fraser, 2013). An anticipatory breach of contract results when one party stops acting in accordance to the terms of contract which leads the other party to believe that the first party has no intention of fulfilling the obligations. An aggrieved party can sue breach of contract in form of damages, without actually waiting for the breach to occur (McKendrick and Qiao, 2015).
When a breach of contract occurs, party can sue for damages and is also entitled to remedies. Specific performance is one of such remedies available to an aggrieved party (Barnett and Harder, 2014). Specific performance not available as a matter or right but has to be awarded at the discretion of the court. Specific performance is an order of the court which requires a party to perform certain tasks which are stated in the contract. It is classified as an equitable remedy and is an alternative to awarding damages.
Equitable remedies are awarded by the court on the basis of what is fair and what seems right in a particular situation. Such remedies are different in each case and it is not necessary to follow the earlier remedies awarded or to stick to the established common laws. These remedies require discretion of court so that court can measure all the aspects of the case and then give the equitable justice to the aggrieved party (Ayres and Klass, 2012). Equitable remedies are flexible in nature and ensure that each situation has its adequate justice.
It is worth noting that equitable remedies are not used as often as the legal remedies (like damages). Equitable remedies are awarded only when the monetary damages are either inadequate to the harm done to the aggrieved party or are difficult to calculate. As stated above, specific performance is one of such remedies available to an aggrieved party whereby he court can ask the breaching party to do the tasks mentioned in the contract.
An injunction is also a form of equitable remedy whereby a court prevents a breaching party from doing certain things (Clarke and Clarke, 2016). So, by awarding an injunction order, a court can order a person to not do something which would result in loss to the aggrieved party. Injunctions are issued as a remedy at the end of any lawsuit where a breach of contract has been claimed. These are in the nature of permanent injunction. Temporary injunctions are awarded for a shorter period of time and are effectively immediately. Such injunctions are usually awarded before the start of a formal lawsuit. Lastly, a preliminary injunction can also be awarded by the court. These are also temporary in nature but are awarded till the time the proceedings of the case go on in the court (Elliot, 2011).
In the given case, Joe entered into an exclusivity contract with Frere Bros, for a period of five years. As per this contract, Joe was prohibited from working in any film which was not made by Frere Bros. but, in the first year only, Joe entered into a contract with Pretty Pictures to star in their film. Here, Joe clearly breached the terms of the contract. And as a result Frere Bros have various remedies available as an aggrieved party.
As a matter of right, Frere Bros is entitled to damages. Upon suing Joe, Frere Bros would be entitled to damages in form of a sum which would restore the economic position that Frere Bros expected from the exclusive acting performance by Joe. This sum would be fixed by the court. Further, Frere Bros can show that monetary damages are not adequate for such breach. And can request the court to order specific performance of the terms of the contract and an injunction to stop the breaching party from undertaking certain task.
Frere Bros can also request the court to stop Joe from acting in the movie of Pretty Pictures as it would result not only in economical damages, but incomputable loss of revenue, which would have resulted, if Joe had only performed in their movies. Frere Bros can attain an injunction order against Joe which would ensure that Joe does not work in a movie other than that of Frere Bros.
To conclude, in the given case, Joe had breached the exclusivity contract which he entered with Frere Bros but entering into an acting contract with Pretty Pictures. Frere Bros have equitable remedies in this case. Firstly, they are entitled to specific performance whereby a court can order Joe to only work in Frere Bros movies for the stated period of five years, as per the contract. Secondly, Frere Bros can get an injunction order against Joe to stop him from acting in the movie scheduled to be made by Pretty Pictures.
References
Atkinson, G. (2013) Acting Contracts. [Online] LegalMatch. Available from: https://www.legalmatch.com/law-library/article/acting-contracts.html [Accessed on 06/09/16]
Australian Contract Law (2010) Errington v Errington [1952] 1 KB 290. [Online] Australian Contract Law. Available from: https://www.australiancontractlaw.com/cases/errington.html [Accessed on 06/09/16]
Australian Law Reform Commission (2016) Remedies and Costs. [Online] Australian Government. Available from: https://www.alrc.gov.au/publications/12-remedies-and-costs/damages#_ftn1 [Accessed on 06/09/16]
Ayres, I., and Klass, G. (2012) Studies in Contract Law. 8th ed. New York: Foundation Press.
Barnett, K., and Harder, S. (2014) Remedies in Australian Private Law. UK: Cambridge University Press
Carter, J W. (2007) Contract law in Australia. 5th ed. Sydney: LexisNexis Butterworths.
Clarke, P., and Clarke, J (2016) Contract Law: Commentaries, Cases and Perspectives. 3rd ed, South Melbourne: Oxford University Press.
Department of State Development (2016) Contract Law. [Online] Government of South Australia. Available from: https://www.sa.gov.au/topics/crime-justice-and-the-law/contract-law [Accessed on 06/09/16]
Elliot, C. (2011) Contract Law. 8th ed. London: Pearson.
Frey, H.P., and Frey, M.A. (2005) Essentials of Contract Law. 3rd ed, Portland: Delmar Cengage Learning.
Gibson, A., and Fraser, D. (2013) Business Law 2014. NSW: Pearson Australia
Jacobs, E.J. (1985). The Battle of the Forms: Standard Term Contracts in Comparative Perspective. International and Comparative Law Quarterly, 34 (2), pp 297-316.
Lindgren, K.E. (2011) Vermeesch and Lindgren’s Business Law of Australia, 12th ed, Australia: LexisNexis.
McKendrick, E., and Qiao, L. (2015) Contract Law: Australian Edition. London: Palgrave Macmillan
The Law Handbook (2015) Elements of a Contract. [Online] The Law Handbook. Available from: https://www.lawhandbook.org.au/07_01_02_elements_of_a_contract/ [Accessed on 06/09/16]
Treitel, G.H., and Peel, E. (2015) The Law of Contract.14th ed, London: Sweet & Maxwell.
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