Legally Binding Contracts

Legally Binding Contracts

Advice Simon of the Legal Requirements of a Legally Binding Contract With Kylie Under English Law

Formation of a Contract

A contract is an agreement that is legally binding whether written or oral made through a promise to fulfill an obligation in exchange for consideration. For it to be lawfully obligatory and enforceable,  four components are necessary, which include an offer, an acceptance, a consideration, and the intention. When any of the four elements are absent, the contract would be considered null and void. It is, therefore, paramount that these components are well understood (Lecture 3). An offer is an explicit declaration of terms or conditions, whereby the offeror makes a promise, and the offeree receives this promise. However, for this offer to be valid, the agreement should state the terms clearly. In addition, there should be intent to do business or action, and the offer must be communicated to the other party. In Guthing vs. Lynn [1831], one was buying a horse and promised to pay an extra amount only if the horse happened to be lucky for him. The court held that the condition was extremely ambiguous and could not be enforced. Given that, it would not be regarded as a valid offer.

Another vital component to note during an offer is that it is usually the last word before the acceptance of the proposal. Before acceptance, one must be sure that the offer is valid or there can be no contract.  Some of the statements that can be confused as an offer include an invitation to treat or statements made during negotiations (Lecture 3). For example, advertisements or goods displayed on a window are merely invitations to treat. It means that the seller has the right to decide whether or not to accept an offer.

When parties are making contracts, at times, there can be lengthy negotiations. It implies that they may make statements during such deliberations which should not be considered as an offer. For instance, in Harvey vs. Facey [1893], Harvey wanted to purchase land that Facey had not publicized for anywhere. He sent Facey a telegram inquiring about the lowest amount that Facey would consider selling the property. When Facey told him the price, Harvey tried to accept it as the price. The court held that the parties had no contractbeen made because the statement of an amount was just an initial stage in the negotiations and did not constitute a binding offer. Finally, when it comes to the communication of the offer, it should be presented to the offeree since he or she needs to know about it for them to accept it.

Termination of an offer is also critical for parties to know when an offer is no longer valid. An offer can end when the offeree dies, when the offeree has accepted the offer or where the offeree turns down the offer. Moreover, an offer can be terminated by a counter offer, whereby there is an attempt to change the conditions of the agreement. Still, parties can terminate an offer due to a lapse of time depending on the nature of the goods or service (Lecture 3). An offer may also be terminated when the offeror withdraws the offer before the offeree accepts it. However, it is only valid if the offeree is aware of the withdrawal.




Legally Binding Contracts

For a contract to be legally binding, all the components of the agreement should be available. Also, other factors should be considered for the contract to be legally binding, for instance, acceptance of an offer where the offeree accepts the offer and consideration and intention elements should be included. When we talk of acceptance, it is where the offeree has an agreement to be bound by the terms set in the offer (Lecture 2). It means that the acceptance should be firm and clearly communicated to the person who made the offer.  The acceptance should be done through speech, conduct, in writing or may also be in the same form as the offer. The communication is termed as effective if it reaches the person making the offer or their place of business. The acceptance should be an acceptance of all the terms of the offer with no introduction of new conditions (Lecture 2). If any party introduces new terms, it would be considered as a counter offer which means the initial offer has been rejected. A conditional acceptance is not binding.

In the case of Kylie, when she introduced a new term of having a Nanny provided for her, she rejected the initial offer and made a counteroffer. Kylie did not accept the original offer without conditions. She said that she would accept “on condition,” which immediately implies that Kylie made a counteroffer. When Simon accepted and made a provision of the condition in the contract, he acknowledged all these terms; therefore, the contract would legally bind him.



Types of Legally Binding Contracts

When entering into a contract with a client or an individual, it is prudent to know the legal implications and what might happen if the terms of the agreement are not adhered to (Lecture 2). Notably,  not all contracts are legally binding, especially agreements with children who are under the age of eighteen and legally considered to be minors.

Moreover, agreements between friends and family are not presumed as legally binding though this can be rebutted. Usually, the burden of proof lies on the person claiming there was a legal relationship. A good example would be in the case of Buckpitt vs. Oates [1988] where Buckpitt and Oates agreed to take a trip together. Buckpitt had even paid for petrol during the trip since it was not unusual for them to be in each other’s car. However, due to Oates reckless driving, Buckpitt who was a passenger was injured. He then went on to claim damages for the injuries he incurred during the trip, against Oates’ vehicle insurance. The court held that the parties had not entered into any contract since it was merely an agreement between friends to go on the trip. Buckpitt was unable to claim damages for his injuries under the law of contract. From the example above, understanding contract law is paramount and comprehending a situation where it would be considered legally binding. A contract with friends as in this case is not legally binding.




Often, contracts that are legally binding are contracts in business or those in industries. These contracts can range from contracts between employers and employees to businesses and individuals, as is with the case between Simon’s talent show company and Kylie. In these forms of contracts, lawyers are involved directly, especially during negotiations or may be behind the scenes providing legal advice (Lecture 2).  When businesses hire an independent contractor maybe for their unique or expert services, they often have a contract for services with the individual as it would be with Kylie. It means that the contract should stipulate the services that the said individual should offer and the duration of time that he or she will provide these services. Usually, when handling independent contractors, one should set the terms of the contract clearly to avoid any ambiguous clauses or assumptions that may land either party in trouble.

Still, it is vital for the business to have a distinction in the nature of the relationship. Independent contractors are not employees; hence, they may not be privy to the rules and regulations of other workers or the benefits that they are entitled to. This distinction will provide for the legal protection and liabilities in the contract. For instance, employers have control over the way workers carry out their work. Conversely, when it comes to independent contractors, they can only control what is to be achieved (Lecture 2). An independent contractor is not part of the business, but he or she is an accessory to the business. In this case, Kylie is not an employee of the company but an independent contractor.




Advise Simon of the legal consequences if he breaches the contract by failing to provide a nanny for Kylie’s baby while she works for the show

In business contracts, when the parties enter a contract,  they intend to be bound by the terms of the agreement. It means that if a contractual term is broken, then there is a breach. Consequently, a remedy for the violation should be compensated. The nature of the breach would determine the remedy sort. For instance, when there is a breach of condition, the remedy sort would be a rejection or damages. Conversely, if it is a breach of warranty, only damages would be sort. Still, according to the Supply of Goods and Services Act (1982), if a contract does not have stipulated terms as to the criteria of performance, the work should be done with reasonable care and skill. However, if the breach of the contract is due to carelessness, the law of tort would apply. It would be a tort of negligence where careless conduct caused damage. Mostly, it applies in situations whereby reasonable care was not taken.

In this case, the counteroffer clearly states that Kylie would only do the job if a Nanny is provided for her. However, if Simon fails to provide the nanny as agreed, it would be a breach of condition. Kylie would be entitled to seek damages for the breach of the contract and may have the option of rejection. She may reject the job if Simon does not meet her conditions. One way to terminate an agreement is through a breach or performance.


However, a breach of contract can occur in various ways. For instance, an anticipatory breach occurs whereby one party indicates that they repudiate the contract. The refusal to perform should be unambiguous and communicated. In addition, it can happen through actual breach whereby one party breaks the agreement when the action promised is due or during the act (Lecture 10). It can occur through failure to do or the performance is insufficient that it ruins the purpose of the contract.

If Simon were to have an actual breach of contract by refusing to provide a nanny who is a breach for a condition as mentioned earlier, he should be aware of the remedies that may be sort. Kylie would probably seek damages following the breach of condition. Usually, the resolve of damages is to reimburse the affected party for any loss, injury or damage that may arise. The court awards an amount of money which is supposed to put the affected party in the same monetary position that they would have benefited from had the contract been fulfilled. It means that the defendant is only accountable for damages attributed to the breach and not for everything that happens due to their actions (Lecture 10). It implies that the loss should be quantifiable.

Other remedies may be awarded at the court’s discretion such as specific performance. The court may order the person who breached the contract to perform his or her contractual obligations. Such a remedy is rarely given, especially when it comes to enforcement of employment contracts (Lecture 10). It would be an infringement of personal liberty if the court ordered an individual to perform certain contractual obligations.

Concerning Simon’s case, if he does not provide a nanny as stipulated in the contract, he should be ready to pay damages and for the contract to be terminated. However, the most successful remedy would be one that the parties sought outside the law through communication, negotiation, and compromise.




Lecture 2: Legal Rights, Duties and Obligations

Lecture 3: Formation of a Contract

Lecture 9: Discharge of contract

Lecture 10: Discharge of contract 2; Remedies

Gunthing v Lynn (1831) 2 B7 Ad 232

Harvey vs. facey [1893] AC 552

The Supply of Goods and Services Act [1982]

Buckpitt vs. Oates [1988] ER 1145