As your legal advisor, I, xxxxxx, will be advising you on whether Kanye, the car salesman, is obliged to sell you the car or whether he has committed a breach of contract.
The advice will include the requirement for a legally binding contract and the consequences if the contract is breached. A contract is usually between two or more parties, which can be either written or oral (Bonner 2019). There are two main types of contracts. The first is a bilateral contract, an agreement between two or more parties forming a ‘reciprocal obligations. (legal dictionary,2014). The other is a unilateral contract, which offered to a number of people, and the person who fulfils the offer will complete the contract (Jones 2017). The advert itself is not a contract, it is primarily used to invite potential customers. Conversely, an advertisement typically does not constitute an offer to fulfil a contracted obligation; instead, it is an offer to establish a unilateral contract (Pearson,2020) Partridge v Crittenden (1968), is an example of an advertisement ,charged with unlawful offering, which is not an offer, hence no offence was committed.
For the contract to be legally binding contract, under English law, it must fulfil the following four criterias; offer, acceptance, consideration and there must be an intention to create a legal relationship. The absence of any of these elements can be void, contract cannot be enforced by either party, or voidable, only one party is bound to the contract terms (Tam 2018).
To make a contract valid, an offeror makes an offer setting out terms of contract, clearly and certainly, and the Offeree accepts the offer, indicating that he is willing to be bound by terms of the contract (jones 2017) The contract needs to be clear and unambiguous, Guthing v Lynn(1931) used the word ‘lucky’ which was considered too vague hence making the contract invalid. To clarify, in this case Kanye, the car salesman is the offeror and you, Kim, is the offeree.
Kim’s part performance of handing over the envelope of cash prevents the offer from being withdrawn, causing an implied obligation on kanye. Errington V Errington and woods (1952), shows that one parties performance of act, paying the mortgage, does not allow the other party to revoke the offer
Acceptance may be defined as ‘an unconditional assent, communicated by the offeree to the offeror, to all terms of the offer, made with the intention of accepting’ (Duxbury 2015). In the case where offer and acceptance are difficult to state, courts will look at the correspondence (Jones 2017). For it to be valid, firstly it must be unconditional, the terms of the acceptance must match the terms of the offer exactly; and communicated to offeror, or else a counteroffer is constructed (Jones 2017). In the case of Hyde V Wrench. It was agreed that there was no contract- the original offer was destroyed when the counter off was made. Moreover, In the case of Brogden V metropolitan, altering an offer made a new offer.
It could be argued that the advert lacked intent to offer, nor was there was no notification of acceptance. However, Kim providing Kanye with an envelope of money demonstrates intent, portraying acceptance through performance. A similar situation is exemplified by Carlill V Carbolic Smokeball co (1893).
Consideration is another important element for a legally binding contract, defined as a ‘promise to give, do something, or refrain from doing something, in return for a similar promise or action by the other party’ (Jones 2017). English law does not enforce unrewarded promises, unless made under deed, a legal document signed and witnessed by all parties involved (Claric Legal Services 2014). Kanye did not sign a legal agreement, therefore Kim cannot sue him for breach of contract.
However English law enforce a promise, if supported by consideration (jones 2017). This case comes under exchange of considerations, an exchange of money for a car. Under Executory consideration, Kanye’s consideration, providing the car key, is executory and Kim’s consideration, the payment, is executed. Tweddle v Atkinson (1861) – in other words, something must be given in order for a promise to be enforced. In this case, Kim provided Kanye with an envelope of money, which he accepted. When Kanye received Kim’s envelope of cash, the offeror becomes contractually bound by his promise, The giving (or promising) of benefit or the suffering of loss. Currie v Misa (1875).
For a contract to be legally binding, the parties should have the intention to create legal relations, which ensures that both parties understand the legal consequences of the agreement. In the event of a dispute between parties, the courts would have to decide if there was an intention to create legal relations by studying the nature and context of the agreement (Jones 2017).
If an agreement was made in a commercial setting, it is often assumed that the parties intended to create legal relations, in this case, Kanye’s shop. Due to the commercial setting the court will presume intention for legal relations. In the case of Balfour v Balfour, a wife suing her husband for unpaid maintenance, court decided that the agreement was under domestic arrangements, with no intention to create legal relations.
Due to the ambiguities in this contract, courts will first presume there was intentions to create a binding agreement (Jones 2017). It would be up to Kanye to prove there was no intention to create legal relations, and if he cannot, the agreement can be enforced against him. Edwards V Skyways (1964), shows the ambiguity in a commercial setting, resulted in court siding with the claimants.
A breached contract is the legal term given to the violation of contract/agreement when one party fails to fulfil its promises according to the provisions of the agreement (Murray 2020). If a condition is breached, the claimant is able to terminate or discharge the contract and claim damages for any loss (Duxbury 2015).
Based on the above evidence, it is likely that a contract was formed and breached by Kanye when he gave the car to Khloe after accepting payment from Kim. In the case of Poussard v Spiers, the defendant failed to perform an important term of the contract and she was, therefore, found to have committed a breach of a condition of the contract.
Kim here suffered a loss, her money, and as a result, is entitled to take court action and claim some remedies. For example, Damages, this is a monetary compensation, awarded for unquantifiable losses, such as physical inconvenience and loss of amenity (Adams,2019). Another example is specific performance, in which you can obtain a Court order for the other side to carry out their contractual obligations (Adams,2019).
In the future my advice to you is that you ensure a deed is signed and witness, by both parties. Both parties should understand and agree to the terms of the contract. This deed should be clear and concise and meet all the criteria for a legally binding contract, under English law.
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