The Simons TV: Legally Binding Contract

Introduction

A legally binding contract under English law requires an agreement between two parties. The agreement is essentially constituted of an offer expressed in clear and uncertain terms together with a similarly clear acceptance, consideration and intention to create legal relations. The manner in which the agreement is undertaken is important as it may compromise the validity of the contract. The process must be systematic and both parties must be fully aware of the contact terms and conditions. In this light, the offeror must provide the offeree with all the information that he/she requires to make an informed decision.

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Requirements of a legally binding contract

The parties’ last word before acceptance is represented by the offer. It is important to note that there is no contract if the original statement representing the offer is not a valid offer since acceptance cannot only occur under such a condition. The offer must be expressed in clear terms to avoid vagueness that could lead to an unenforceable contract (Adams, 2010). Furthermore, Simons TV must not confuse statements of negotiation as legally binding as these are just mere negotiations without a “last word”. Communication of the offer to the judges of the show must be made for them to accept it. This communication may be written, spoken or by conduct (Hill, 2001. p 151). In the case of Simon’s TV a written communication will serve both parties well.

The offer that Simons TV communicates to the potential judges is subject to their acceptance for the contract to be legally binding. However, the offeree (judge of the show) may simply reject the offer if she is not interested therefore bringing the contract negotiations to a halt. The validity of the offer is void if the offeree makes a counter offer thus signifying the start of another contract negotiation if the offerer (Simons TV) is still interested with this counter offer. Termination of the offer also may be due to death of the death of the offeree, lapse of time or revocation (Atiyah, 2000). The death of the offeree renders the offer null and void automatically same as failure of the offeree to accept the offer within reasonable time. In the same breadth, the offerer may revoke the offer before the offeree accepts it but this is only effective if the offeree is told of the revocation before acceptance.

Acceptance of the terms of the offer binds the contracting parties to the terms of the offer. For Simons TV to ensure that the acceptance is legally binding the acceptance must be; a reflection the offer, firm and the potential judge communicates the acceptance. The acceptance must not include or omit any conditions provided in the offer since this will result into a counter offer, which in essence contradicts the original offer. The offeree cannot accept the original offer if the counter offer is rejected by the offerer since the counter offer will have already destroyed the original offer. Furthermore, the communication of the acceptance can only be done by an authorized person in a reasonable method preferably the same method in which the offer was made (Beatson et al, 2010).

For either party to agree to be legally bound there must be a consideration. The consideration may be in form of a benefit or a detriment to either party. While formulating considerations, Simons TV must ensure that the consideration is not past. For example, a promise to pay a certain amount of money to one party for a service is only legally binding if the promise to pay the amount was made before the service was rendered. In addition, only parties privy to the contract can benefit from the contract, unless the contract confers benefits to a party outside the contract or it is expressly permitted by the contract. The consideration must be assessable in financial terms although it needs not to be the full market value in terms of its adequacy (Keenan, 2011). Most importantly, a contract whose subject matter is not legal is not enforceable. Therefore, all parties privy to the contract must be clean of any wrongdoing.

Contents of a legally binding contract

Legally binding contracts are made up of terms that are offered by one party and accepted by the other. These terms may be implied terms that are not expressly agreed upon by both parties but are implied in the contract document. Secondly, there exist conditions in the contract which form the basis of existence of the contract and the remedies of a situation caused by the breach of a contract. However, s party may be exempted from liability following a breach of contract through exemption clauses in the contract (Collins, 2003). The offerer communicates express terms to the offeree.

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A legally binding contract is governed by the conditions whose failure to adhere to by either party entitles the injured party with a right to reject the contract and claim damages or continue with the contract and claim damages. A warranty in a contract is not as crucial to the contract as a condition. Breach of a warranty only entitles the affected party damages and not total rejection of the contract. However, all terms cannot be classified as conditions or warranties, as they are not conclusive. Thus innominate terms are used are used to cover a variety of breaches. It is prerogative of the court to judge whether the breach has compromised a major or a minor term.

Inclusion of exemption clauses in a contract is vital since they allow the involved parties to assess genuinely the potential risk of entering into the contract. The exemption clauses are classified as exclusion clauses which exclude consequence on event of a breach of contract and limitation clauses which seek to limit a liability. It is common practice for parties in a contract to avoid liability, to prevent such behavior of negligent and irresponsible breach of contract, Simons TV must have exemption clauses that are incorporated into the contract, and the clauses must be crystal clear, explicit and should satisfy the statutory requirements. The inclusion of these clauses must be communicated into the offeree before she accepts to the offer. Failure to draw the attention of the offeree to the exemption clause through reasonable measures will render the exemption clause unbinding (Goode, 2007). Therefore, limitation and exemption clauses should be printed in clearly and may be underlined to ensure it cannot be missed in the contract document this is referred as the sufficiency of notice rule. However, this rule does not cover signed documents since before a party privy to a contract signs a document he must be aware of the contents his appending his signature to whether or not he has read the document unless the party was misled to misinterpret the exemption clause by the other party (Treitel, 2011). Wording of the exemption clause ambiguously may lead the court to restrict its effect in the sense that the meaning f the clause that is least favorable to the offerer is adopted.

Consequences of breach of contract

Breaching a contract attracts consequences. The seriousness of the breach determines the extent of the consequences. A fundamental breach of contract occurs when the breach is so serious that the purpose of the contract is defeated (McKendick, 2009). However, just breaching a contract is not enough to discharge a contract. If one of the judges breaches a warranty this will give rise to a claim in damages only. However, if a judge breaches a condition, Simons TV may sue for damages and continue with the contract or it may consider the contract repudiated by the judge and sue for damages.

In event that Simmons TV accepts the repudiation, the company is entitled to sue for damages and both the judge and Simons TV are freed from their future obligations to the contract. However, existing obligations to the contract remain binding and damages payable are those that arose before the termination on the contract. The intention to terminate the contract may be communicated to the judge if she breaches the contract to which she will affirm the termination although failure by the judge to affirm is in itself enough to terminate the contract.

The judge may also indicate that she will not perform her part of the contract in the case of anticipatory repudiation. In this case Simons TV may accept the anticipatory breach and sue for damages arising thereof or may decide to wait until such a time when the judge does not perform her duty and sue for damages then.

Conclusion

A legal binding contract requires a procedural approach since the time of placing the offer to the time of signing the contract. A legal binding contract is based on the principle of one party making an offer and the other accepting the offer fully aware of the implications of the contract. Therefore, for Simons TV and the judges to enter into a legal binding contract both parties must adhere to the terms and conditions of the contract. The judges’ attention must be drawn to the consequences of breaching the contract to avoid unnecessary confrontation.

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References

Adams, A. (2010) Law for Business Students. Harlow, Longman.

Atiyah, P. (2000) An introduction to the law of contract. ND, Clarendon.

Beatson, B et al (2010) Anson’s law of contract. New York, Oxford University Press.

Collins, H. (2003) Contract law in context. CA, Cambridge University Press.

Goode, R. (2007) Goode on commercial law. ND, Penguin.

Hill, S. (2001) Flogging a dead Horse- the Postal acceptance rule and email. Journal of contract Law, 17(1). p. 151.

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Keenan, R. (2011) Business Law. Harlow, Longman. p. 13-17.

McKendick, E. (2009) Contract law. ND, Palgrave.

Treitel, G. (2011) Treitel on law of contract. NY, Maxwell.

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