Peter is an aspiring writer who has just completed his autobiography. Before his memoirs can be submitted for publishing, he must first find a literary agent to represent him and his work. His sister’s husband, Raymond, is a literary agent, but Peter does not want Raymond to represent him because Raymond doesn’t treat his sister and their pets particularly well, and in one of the chapters of the memoir, Peter discusses these events while describing Raymond as a ‘tool’.
Unfortunately for Peter, he has led a very boring life and after contacting every literary agent in town, he can find no one to represent his work. Discouraged and desperate, Peter contacts Raymond and asks him to act as his agent for the autobiography, and for the other few manuscripts that he will produce after that. Raymond doesn’t really like Peter, but needs to get back into his wife’s good books after striking their over-energetic Labrador while reversing out of the driveway. Seeing this as a good opportunity to make good on his misdeeds, Raymond agrees to act as Peter’s agent for a small commission of 8% of the revenue on every book that Peter sells. Before sending the manuscript over to Raymond, Peter removes the parts that would likely offend Raymond and embarrass his sister.
Receiving the manuscript, Raymond thinks that he knows just the man to get the manuscript into print. Billy, who assesses manuscripts for the Booky Wooky publishing company (and has quite a boring life himself), reads a chapter of Peter’s manuscript and loves it. After not being able to put it down, he decides on the spot to offer Peter a publishing contract.
Getting Peter’s email address off Raymond, Billy sends the publishing contract through to Peter’s email on Monday for his signature. In the email Billy states that the contract must be signed, scanned and returned as an email attachment by Sunday 5pm, otherwise Booky Wooky publishing will have to find another author’s work to publish. Reading Peter’s manuscript again on Friday morning, Billy can’t help but think that he made a terrible mistake by first reading Peter’s manuscript after drinking a bottle of Tequila while listening to One Direction’s new album. Now having the clarity of mind reserved for geniuses, Billy gets on his email and sends an email to Peter communicating that the Monday offer of a publishing contract is revoked.
After taking a short trip to Bali that was inspired by ‘Eat, Pray, Love’, Peter checks his email on Friday afternoon. After reading the initial email from Billy, and breakdancing delightedly for a short while thereafter, Peter signs the contract, attaches it with a reply message to Billy and presses send. After clearing out more of his inbox, Peter then opens Billy’s email revoking the publishing contract. Confused and agitated by this occurrence, he calls Billy and forcefully tells him that they have a legal agreement because he signed and returned the contract prior to receiving the revocation email. Billy thinks that Peter is as mad as his memoirs describe and tells him that they don’t have a contract at law.
Question (a) 10 marks
Using the four-step process, discuss the element of agreement required for the formation of an enforceable contract. HavePeterandBilly(as an agent for Booky Wooky Publishing Company)reached ‘agreement’ in relation to the publishing contract?
Peter’s second manuscript, which is significantly better than his first effort, is expertly negotiated by Raymond with Le Paz publishing, and sold for quite a large advance. After this book, titled ‘Trifight: the story of three bodybuilders who compete for the love of a lonely personal trainer’, hits the shelves, sales go ballistic and end up earning Peter substantial revenues of $1 million.
When Raymond checks his bank balance and sees Peter’s agent fee deposit of $60,000, he approaches Peter and sternly reminds him that 8% of $1 million is $80,000. Peter, who has gone Hollywood with all of the attention received from the success of the book, tells Raymond to “chill out brother” and calmly explains that he deducted the other $20,000 as back payment for charging a reduced rent on the house that his sister and Raymond leased off him five years earlier. Raymond is angry beyond belief and tells Peter that this is not the arrangement that they came to when he agreed to be Peter’s literary agent.
Question (b) 10 Marks
Assume that a legally binding agreement exists between Peter and Raymond. Using the four-step process, consider whether the other elements required for an enforceable contract are present. Can Raymond enforce the contract against Peter?