The Contract With Crane Entertainment Essay

1440 Words Apr 26th, 2016 null Page
Question 1 –

To advise Gabe as to whether his contract with Crane Entertainment is valid it needs to be established that the agreement formed between the two parties was indeed a contract, hence contract formation needs to be considered. Crane Entertainment made an offer of $750,000 for all development, production and promotional costs. Gabe considered his options and had the opportunity so accept or decline, therefore an offer was clearly made. Gabe’s acceptance was communicated over the phone and he signed the contract in person. It is evident that an agreement was reached. It is obvious that there was intent to create legal relations between the two parties, this is a commercial relationship between two companies.

For the agreement to become a contract there needs to be valuable consideration. The doctrine of consideration requires that something be given in return for a promise in order to make it legally binding. There are two elements of consideration: benefit/detriment and bargain. Ultimately consideration is the concept of price paid, which was presented and accepted in Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847. There are also requirements of consideration: sufficiency, currency and movement from the promisee. The sufficiency of consideration is that it must be sufficient, have some legal value but it does not need to be adequate: Chappell & Co Ltd v Nestlé Co Ltd [1960] AC 87. This is consistent with Gabe’s situation; he was offered a price…

Related Documents