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. Have Peterand Billy(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?

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