Legally Binding Contract of the TV Show Producers and Contestants

Simon is the producer a talent show broadcasted on TV named "You’re Hired!", where contestants compete against each other to become the CEO of Simon’s UK based TV production company. The number of viewers and advertising revenue that the TV show amounted to wasn’t to Simon’s satisfaction. Due to this Simon has decided he must revitalise the TV show and to do so he would like to bring on board Kylie Jenner as a mentor for the contestants. Simon is willing to pay £5,000,000 for Kylie’s appearance on his show and must also provide a full-time nanny- for Kylie’s new born child. A contract has been written in accordance with English Law. As Simon’s legal advisor he will be advised on what the requirements are of a legally binding contract under English Law and what the legal consequences are of breaching the contract by not being able to provide a full-time nanny for Kylie’s child.

Firstly, the requirements of a proper legally binding contract are; ‘an offer, an acceptance, consideration and the intention to create legal relations’ (Adams 2014). The contracts cannot come into being without these requirements as it will be void and incomplete. For Simon to be able to employ Kylie Jenner he must, therefore, complete each of these requirements in full. To begin with an ‘offer’ and ‘acceptance’ is the first requirement of a contract and this can be described as the first phase of forming a contract. The following evidence supports this: ‘There are two basic rules to the formation of a legal contract; offer and acceptance. One party makes an offer or agreement to provide a service and the other party accepts the offer. By setting out the terms and conditions of offer and acceptance a legally binding contract has been made. If the contract is broken, or breached, then the law can used to enforce the contract’ (Crystal 2018).

In relation to the TV show scenario, Simon is making the offer to Kylie who must accept for the contract to progress. Simon has become the offeror and Kylie is the offeree. In addition to this, the offer and acceptance must be clearly communicated either, orally or through a written document. The terms and offer made must also be far from vague and have clearly stated terms. A case which supports this is, Guthing v Lynn (1831) B&AD 231: - Buyer of a horse promises to pay an extra 5 pounds if the horse is ‘lucky’. Held: an offer based on luck was too vague and cannot be ruled as a complete offer. Using this case as evidence, Simon and Kylie must state their terms clearly. Once this phase is complete, both parties will have acknowledged and agreed to the terms that have been proposed, for example, the fee, Simon will pay Kylie, in addition to the full time Nanny he will provide for her new-born child.

The final 2 requirements that the contract must have to be legally binding are ‘consideration’ and the ‘intention to create legal relations’. Consideration is an essential component of the formations of a legally binding contract. Consideration can be defined as negotiations and term discussed, between parties, being ‘beneficial to each other’ (Adams 2014). In the case of Simon negotiating with Kylie, both parties would benefit as Simon achieves his aim of employing Kylie, and securing success of his TV show, Whilst Kylie would receive a sum-of five million pounds and a fulltime nanny, to care for her child. In addition to this there are also types of consideration that can apply to the situation involving Simon and Kylie. The types of consideration are known as Executory Consideration and Executed Consideration. Firstly, Executory Consideration is a consideration of a ‘promise which has not yet been performed…by which the party is either bound by contract to perform or not’. (US Legal 2016). In relation to Kylie, being the offeree, executory consideration may take place if she agrees to Simon’s sum and Is legally bound to appear on Simon’s TV show in the future, if Simon provides his future promise of proving a nanny. This can be described as Executory Consideration as both parties have considered benefiting each other by mutually considering- performing their promises soon. Secondly, Executed Consideration can be described as a ‘contractual promise which has been performed’ (Adams 2014). This means that the promise has already been agreed to and carried out to allow the formation of a contract to take place. In this case, Simon’s fee of five million pounds is the act of an Executed Consideration as he would pay Kylie the sum which both parties have agreed to.

The final requirement a contract must have to be legally binding is an intention to do business by create a legal relationship and seeking a legally bound agreement. It can formally be defined as when ‘the parties must intend to enter into a legally binding arrangement in which the rights and obligations of the agreement are enforceable’ (Gould 2017). This is the final component of a contract and once it is performed by both parties, they must act on their promises and enjoin upon what is required of them. Simon must accept Kylie’s terms and Kylie must accept Simon’s. This would mean that she has accepted the sum, Simon has offered and the role that is required of her, on Simon TV talent show. It would also mean that Simon has agreed to provide a full time Nanny and it must be to the liking of Kylie. Once the legal relationship has been formed it would also mean that an intention to do business has also been made by both the offering party and the offeree’s party. What this also mean is that if Simon and Kylie have found a nanny that they agree to, she may also be involved in in the intention to do business as she would be a ‘beneficiary’ of the contract formed. She would receive wages from Simon as her employment would be a result of Simon employing Kylie. However, Simon should know that if the contract is breached, which will be explain further, the nanny may not be able to sue if she is unhappy with the affect on her. This is because although the subject of employing a nanny was part of both Kylie’s and Simon’s Executory Considerations. That specific nanny would not have been ‘privy to the contract’ (Adams 2014).

A case which supports this is: Tweddle v Atkinson (1861): William Tweddle was engaged to Miss Guy. Fathers of the couple contracted to pay a sum of money to the couple after the marriage, but Mr Guy died before making payment. Held: William Tweddle had no right to sue, the late Mr Guy’s estate as he was a mere beneficiary and not privy to the contract and did not contribute to the consideration (Adams 2014). This case can be used as reference and a precedent for a possible case involving the Nanny if she decides to sue Simon for the breach of contract between him and Kylie. It proves that the nanny was just a beneficiary of the contract made between Simon and Kylie and isn’t privy to that contract due to not being involved in the consideration. The nanny would only be privy to her own employment contract with Simon – not Kylie’s employment contract with Simon.

Legal consequences of Breaching a Contract

Once a contract is formed and is legally binding, there is still the possibility of it being breached, however this would cause legal consequences to both parties. In this case, If Simon fails to provide a nanny for Kylie’s new born child, whilst she is employed by him, the contract would be breached and as a result Simon will have to face legal action. Simon would be at risk of having the contract discharged against him as failing to provide a nanny would mean the Simon hasn’t fulfilled the agreed obligation. Kylie could then possibly have the contract discharged based on ‘part performance’ (Adams 2014). Discharge of the contract through Simon clearly intending not to provide a nanny once the contract has been formed, is an actual breach.

However, there are breaches, which may not cause a contract to be terminated. A ‘breach of warranty’ would allow Kylie the ‘right to claim damages’ (Adams 2014) but the contract will not be bought to an end. Simon will have to pay Kylie and compensate for the damage or potential loss that has occurred by not providing a nanny for Kylie. In this situation however, this form of breach is unlikely to happen. A form of breach that is more likely to happen is a ‘Breach of Condition’, where Simon will have failed to meet a crucial condition of the contract. This will be damaging to Simon and his TV show as Kylie will then have the right to ‘Repudiate’ and ‘refuse further performance of her obligations’ (Adams 2014).

Although this type of breach will be subject to Kylie’s choice and may not destroy the contract; provision of a nanny is a fundamental term of the contract that Simon must meet. If he fails to do so Kylie may refuse to carry out her obligations. In addition to this, if Simon announces before the TV show is launched, that Kylie’s duties are to be changed or a nanny will no longer be provided, it is known as an ‘Anticipatory Breach’ (Adams 2014). If this happens Kylie can abandon her duty and sue Simon for damages. The final type of breach that can also damage the contract and cause legal consequences, if Simon fails to provide a nanny is an ‘Actual breach’. This is ‘failure to perform at all or properly once performance is due’ (Adams 2014). This type of breach would show complete disregard of the terms agreed and the legal relationship formed through a binding contract. If Simon fails to provide a nanny once his TV show is launched it could lead to the failure of his TV show, let alone legal repercussions from Kylie’s party. If the legally binding contract between Simon and Kylie is breached due to Simon not employing a nanny, there will be the need for remedies to repair the legal relationship formed.

As mentioned earlier, if Simon breaches the contract, ‘Repudiation’ is an option for Kylie as she may not carry out her obligations and claim for her losses. Another option is to claim for ‘Damages’. This is ‘used to put the claimant back in the position they would have been if the terms of the contract had been met as agreed’ (Nelsons Solicitors 2017). There are two types of damages that Kylie could claim for, against Simon – the defendant. These are ‘Special Damages’ and ‘General Damages’. Special Damages cover the loss of profits and General Damages cover ‘physical inconvenience and loss of amenity’ (Nelsons Solicitors 2017). In this case, Kylie is more likely to claim for this remedy as Simon failing to employ a nanny will cause her inconvenience, especially if the breach of contract is an actual breach. Simon may have to pay for any inconvenience caused to Kylie and her child. If Kylie claims for special damages, Simon may have to pay her the amount that was originally agreed, which was five million pounds.

The following remedies are ‘equitable’ and are therefore applied by discretion of the court. These are Recession, specific performance and injunction (Jeffree 2019). Recession would mean that the court will order Simon and Kylie to return to their pre-contractual positions. Specific performance is when the court would order Simon to carry out his contractual obligation, but this is unlikely to happen. Finally, an injunction would mean the party is forced into the employment for another (Jeffree 2019) but is also unlikely to happen in this scenario. If Simon is the defendant, Kylie will most likely claim for damages and recession. Overall, if Simon fails to provide a nanny, Kylie will have a right to legal remedies, and this could be financially straining and damage the reputation of Simon and his TV show. It is highly advised that Simon performs all his contractual obligations in order to avoid these rightful legal repercussions.