Journalism and Media Fiona - PowerPoint Presentation

Slide1

Journalism and MediaFiona Taylor Taylorssolicitors1@outlook.com

Contract LawSlide2

Contract TermsThe terms of a contract are binding obligations which the parties agree to perform to complete the contract – they are its contents effectively. Non-compliance will result in breach and the seriousness of that breach will affect what remedies are available. There are a number of ways in which terms can become part of the contract.Slide3

What is a contract?An agreement enforceable at law. An essential feature of contract is a promise by one party to another party to do or forebear from doing certain specified acts. The offer of a promise becomes a promise by acceptance. Contract is that species of agreement whereby legal obligation is constituted and defined between the parties to it. It can then be enforced in a court of law or other suitable forum.

There will be OFFER, ACCEPTANCE & CONSIDERATIONSlide4

Reasons for Contracts

because they create legitimate expectations in both parties that their promises will be carried out

because there one party often acts to their potential detriment, losses may be incurred as a consequence of agreeing to a certain course of action

because it would be unfair if one party carried out their part of the agreement for the other party to be allowed not to do soSlide5

What is an Offer?A contract usually starts with acceptance of an offer. An offer is a statement by one party, the

offerer

, (the person making the offer), identifying terms of an agreement by which s/he is prepared to be bound if they are accepted by the offeree, (the person to whom the offer is made

).

(Martin & Turner 2014)Slide6

The character of an Offera statement of willingness to be bound by the terms of the offer.

Distinguishable from an

‘invitation

to

treat’ (see below).

Distinguishable from a mere statement of price which does not indicate a willingness to sell

Special words may make an apparent invitation to treat an offer,

eg

competitive tenderingSlide7

Communicating an Offera statement of willingness to be bound by the terms of the offer.

Distinguishable from an invitation to treat

Distinguishable from a mere statement of price which does not indicate a willingness to sell

Special words may make an apparent invitation to treat an offer,

eg

competitive tenderingSlide8

Revoking an Offeran offer may be withdrawn any time up to acceptance

revocation must be communicated to the offeree to be valid

this may be through a reliable third party

a unilateral offer cannot be withdrawn while the offeree is still in the act of performanceSlide9

Terminating an OfferA

n

offer ends in one of four ways:

it is accepted so a contract is then formed

passage of time – whether stated time or a reasonable time

failure of a condition precedent (

ie

a condition that must be fulfilled before the offer is completed)

death of a partySlide10

Invitation to TreatAn invitation to treat is such that the person responding has not yet made an offer to buy, and therefore does not of itself give rise to a binding contract.

eg

invitation to council tenant to buy council house, auction catalogues, tenders to provide goods or services, advertisements, goods displayed in shop window, a statement of price made during negotiations indicating that an offer exists. Slide11

When contract is formed:

Invitation to Treat

eg

goods offered for saleSlide12

Offer to TreatThe significance of the invitation to treat is that the person responding to

it

has not accepted an offer, so their action does not at that point create a binding contract. Sometimes whilst something may seem like an invitation to treat, if it has the effect of an offer a positive response may lead to a binding contract being formed.

Acceptance may be deemed by conduct.Slide13

AcceptanceThere is no contract until there has been acceptance. The contract is formed immediately UPON acceptance.

It is vital to establish that the response to an offer is in fact acceptance and is communicated to the offeree. Slide14

Basic Rules of AcceptanceA

n

acceptance is an intention to be bound by the terms of the offer

I

t

must therefore

i

) be unequivocal

ii) be unconditional

iii) correspond precisely with the terms of the offer – this is known as the ‘mirror image’

rule.Slide15

Mirror Image Rulean attempt to vary the terms of the offer is a counter-offer! This is tantamount to rejection of the original offer so the original offer is therefore is no longer open to acceptance

if there is a counter offer, the terms of that will be included in the contract

the courts will not allow a party to benefit from both the counter offer and the original offer – you can’t have the best of both worlds!

A rejection of an ancillary subject may still be a counter offer, although the main terms are accepted

A mere enquiry that does not seek to vary the terms of an offer is not a counter offerSlide16

Communication of an OfferUntil acceptance is communicated there is NO CONTRACT …

usually

Some exceptions. Silence is not normally enough.

Acceptance can be in any form.

Consumer Protection (Distance Selling) Regulations 2000.Slide17

Consideration

“A valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other”.

Which means what has it cost you or what have you gained., e.g. the money for the Mars Bar.Slide18

ConsiderationNeed not equal the value of the other thingMust be real, tangible, of value, i.e. SUFFICIENT (although that may be very little)

Must not be past, (unless the service was requested)

Must move from the

promissee

– to sue or be sued a party must give consideration (which does not mean just being thoughtful)Slide19

Consideration

What one is already bound to do under one contract cannot be the consideration for a new one unless it involves something extra or the other party gains extra benefit

An agreement to accept part payment only is unenforceable unless the payment is made earlier or in different form or the other party is prevented from revoking the promise by estoppel

The exception to the rule that consideration cannot be past relates to service originally requested and then carried out by the other party. A later promise to pay is enforceable, even though the agreement to pay comes after the service is rendered.

If third parties’ rights are affected there may not have to be movement of consideration from the

promissee

– Contract (Rights of Third Parties) Act 1999.Slide20

Intention to Create Legal Relations

Domestic and social arrangements – there is presumed to be NO intention to create legal relations unless the contrary is shown.

So arrangements between husband and wife, or parents and children are not usually enforceable. Arrangements usually are enforceable between estranged couples, domestic arrangements where money has changed hands and domestic arrangements where one party has suffered a detriment to comply with the agreement.

Business and commercial transactions – there is presumed to be an intention to create legal relations

unless the contrary is shown.Slide21

Formation of Contract1. Simple e.g. sale of goods and supply of services. These can be made orally, in writing or even implied by contract, so there is no specific format

2

. Speciality e.g. transfers of land and land interest. Must be in specific form either or deed or writing to be valid, e.g. guarantees.Slide22

VOIDVoid: Of no legal effect; a nullity; eg

an agreement for an immoral consideration. A contract may be void on the face of it, or evidence may be required to show that it is void. But when an illegal contract has been executed, money paid either in consideration or performance of the contract cannot be recovered back.

Slide23

VOIDABLEVoidable: an agreement or other act which one of the parties is entitled to rescind, and which until that happens, has full legal effect.

Eg

in case of fraud in a contract. If, however, the party entitled to rescind the contract affirms it, or fails to exercise his right to rescind within a reasonable time, so that the position of the parties becomes altered, or if he takes a benefit or acquires third party rights, then he will be bound by it. Slide24

Freedom of ContractInequality between the parties –

eg

big company versus unrepresented individual – exemption clauses

implied terms –

eg

in employment

use of standard from contracts – business practice

statutory protection of consumers

EU law

Authority to contract – if there is no authority to offer, usually an offer cannot be accepted

Legality

Capacity (Mental/legal)Slide25

Enforcabilitycapacity to contract;intention to contract;

consensus ad idem; mutuality of intent – offer and acceptance

valuable consideration;

legality of purpose;

sufficiency of terms.Slide26

 Minors (not miners) – i.e. under 18.

There are two groups of valid and enforceable contracts for minors

:

Valid

–

enforceable

Contracts for necessaries, (according to station in life and present needs). Must pay reasonably for goods or services actually delivered

Contracts for service, training or education – one adverse term will not invalidate the contract but must be substantially to minor’s benefitSlide27

MinorsVoidable – so can enter into, but may be set

aside:

Contracts to lease property

Contracts to purchase shares in a company

Contracts to join a partnership

Marriage settlementsSlide28

MinorsVoid, so cannot be enforced:

Loans

Goods or services other than necessaries

Accounts statedSlide29

IntoxicationA contract made by a person while drunk is voidable

if at the time of contracting the person did not know the quality of his/her acts and the other part knew of the intoxication

The party may ratify the contract upon reaching sobriety

S3 Sale of Goods Act 1979 where the contract is for necessaries, the party making the contract while drunk need only pay a reasonable price for goods actually deliveredSlide30

Mental IllnessA contract made by somebody mentally ill is voidable if when contracting the mentally ill person was unaware of the quality of his/her actions and the other party knew of the illness

A contract made while not ill will be binding despite consequent illness

S3 Sale of Goods Act 1979 where the contract is for necessaries, the party making the contract while mentally ill need only pay a reasonable price for goods actually deliveredSlide31

Privity - Who is party to the contract and has a right to take action in respect of it

Basic considerations: Who can enforce it? Who is a party to the contract? Who are you contracting with??

“Only a party to a contract can sue on it” Lord Haldane.

‘

Privity

of contract is the relation which exists between the immediate parties to a contract which is necessary to allow one person to sue another’. Slide32

Representations

Type of Representation

Liability

Basis for Liability or not

Terms

Create binding obligations so attach liability

Actually incorporated into the contract and so are the obligations under it

Mere representations

Attach no liability in themselves if correctly stated

Induce a party to enter a contract but do not become a part of it so no not binding

Misrepresentations

Can attach liability and therefore remedies

Even though not part of the contract the representation acted to induce the other party to enter into the contract and so “vitiated” their free will

Mere Opinions

Attach no liability in themselves

Opinion is not a matter of fact and is variable

Expert opinions

Can attach liability as terms if important enough to be

I

ncorporated

or as misrepresentations if falsely stated

Party is entitled to rely upon the skill and expertise of experts

Trade Puffs

Attach no liability

Mere advertising boasts so not expected to take seriously

Puffs with an attached promise

May attach liability

The promise is sufficiently specific to be relied upon. See

Carlill

v Carbolic Smoke Co below.Slide33

ReflectionBe aware when you are creating contractual arrangements. Especially consider offer, acceptance and consideration

Don’t sign contracts without reading them

Don’t enter into contracts you can’t fulfil

Before entering into a contract consider terms and conditions and whether these can be negotiated

Honour contracts

Get them in writing

Keep evidence Slide34

Contract TermsExpress terms – confirmed and incorporated by the parties to it. Must be seen to be of importance to one of the parties. May be oral or written. Usually close in time to making of contract. Example of reliance on expertise of one party, written, signed.

Implied terms – by custom, past dealings, to make sense of agreement or for business efficacy. There is an “officious bystander” test – presuming intention of the parties. Terms may be implied by statute – e.g. Employment and consumer rights. Implied by fact (apparently unexpressed intention of the parties) or by law.Slide35

Vitiating FactorsVitiating Factors

A contract may have defects which if known to the parties at the time of entering into the contract may have resulted in no contract being formed. These are called ‘

vitiating factors

’. They may result in either void or voidable contracts. In the first instance the nature of the vitiation is such that a valid contract could never have been formed. If the contract is voidable, the party affected by the vitiating factor may end the contract or continue with it, possibly replacing more appropriate terms. Slide36

Discharge of the ContractThe contract comes to an end in one of four ways:

Performance

Agreement

Frustration

BreachSlide37

Remedies for BreachDamages

unliquidated damages based on precise loss

liquidated damages fixed by parties at time of formation of contract

quantum

meruit

– payment for part-performance based on amount of work done

Note need for causation and

not

too remote.Slide38

Remedies cont.

Nominal Damages - When there has been breach but no loss

Loss of bargain – difference between quality promised and quality received

Failure to deliver – difference between cost under contract and cost of obtaining elsewhere

Loss of profit

Loss of chance

Damages for mental distressSlide39

Equitable Remedies Equitable Remedies

Specific performance

Injunctions

Rectification

RescissionSlide40

Duty to MitigateIf you have suffered as a consequence of breach of contract, you have a duty to do what you reasonably can to reduce the amount of the loss.

If you are unsure about any of this, please contact Fiona to

discuss.

©Fiona K. Taylor 2016