Business Law Tutorials

...

- Why did the court decide that the advertisement was an offer and not an invitation to treat?

Answer: The plain meaning of the advertisement indicated that, because one thousand pounds was lodged at the bank for the purpose of drawing from it to pay someone from the public the amount of one hundred pounds if the person fulfilled the conditions of the advertisement, then it was intended to be acted upon.

The advertisement was not a typical advertisement (an invitation to treat or mere puff), but rather it was an offer that would become a binding contract the moment a person fulfilled the conditions.

- To whom was the offer made? Who could accept it, and how? How could the offer have been properly withdrawn?

Answer: Offer was liable to anyone who, before it is retracted, performs the conditions and, although the offer is made to the world, the contract is made with that limited portion of the public who come forward and perform the conditions on the faith of the advertisement. A person must act (accept) with knowledge of and in reliance of the offer for a contract to be formed.

5) Now answer the following problem question, using the IRAC method and Carlill’s case as a guide.

In the window of your local convenience store John and Tuan see a note offering to pay a reward of $200 for the safe return of a lost dog.

While practicing golf in the local park, John and Tuan see a dog that matches that description and rescue it from being attacked by another dog.

The two boys return the dog to its owner Bill, but he refuses to pay the reward of $200.

Bill says that he knows the law and that there is no contract for two reasons:

First, he did not mean the offer to be taken seriously. He made the offer merely to placate his family who were distressed about the dog being lost.

Secondly, the boys had not communicated their acceptance of his “offer”.

Advise Bill whether John and Tuan are legally entitled to be paid the reward?

Answer:

Issue: The issue raised by the question is whether the contract exists between them or not.

- Rule: The legal rule is that there are four essential components to form a contract. They are offer, acceptance, intention, and consideration.

In this case it is necessary to find whether there was contract or not, whether the note offering the reward of 200$ by bill was offer or just an advertisement in order to find his dog. He said that he just make an offer merely to placate his family who were distressed about the dog being lost and that the boys did not communicated their acceptance of his offer.

If the person fulfilled the conditions of an advertisement,then its intended to be acted upon.same kind of scenario is described on

Carlill v Carbolic Smoke Ball Company (1893) 1 QB 256

Application: it is important to know, from the note given how will ordinary person interpret the advertisement. If the person fulfilled the conditions of an advertisement, then its intended to be acted upon. The advertisement by bill was not the typical advertisement, but rather it was a offer that would become binding contract the moment a person fulfilled the conditions.

Conclusion: The advertisement/note was an offer made, and that if people performed conditions of the advertisement/note, then a contract was formed.

Exercise 5.4

Read the cases of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1953) 1 QB 401 and Fisher v Bell (1961) 1 QB 394 (Parker and Box pages 89-90) and answer the following questions:

- If a customer selects items from a store shelf, are they accepting the store’s offer to sell the items at the nominated price or are they offering to buy the item?

Answer: The store shelf keeps item as invitation to treat, if the customer select the item and take to the counter than they are making an offer to buy from the store.

- If a person sees an item in a store window goes into the store and says they want to buy it, are they accepting an offer from the store to sell the item?

Answer: The store keep item for sell, that mean they are not making an offer but they are displaying as invitation to treat, the offer is made by the customer by taking that item to the counter, if the offer is accepted, the contract is made at cashiers desk but not at display shelf.

- In the above scenarios, when is the contract formed?

Answer: the contract is made at cashiers desk but not at display shelf.

4) Answer the following problem question, using the IRAC method. Cite the relevant cases and principles to support your answer.

While browsing in a second hand shop, Jane notices two apparently identical chests of drawers. One chest of drawers is a genuine antique and the other is a reproduction or imitation.

The price tags ($4,000 and $200 respectively) have been accidentally swapped so that Jane believes that she can buy the antique (normally $4,000) for $200. She tells the shop owner that she will buy the antique for $200 and produces the money for her purchase.

The owner realises that a mistake has been made and insists that the price should be $4,000. He therefore refuses to sell the antique to Jane. Jane seeks your advice as to her rights.

Advise Jane whether a contract exists between her and the shop owner, citing cases to support your answer.

Answer:

Issue: The issue raised by this question is whether the essential component of acceptance exist or not and whether there is contract formed or not.

Rule: The legal rule is that there are 4 essential components of a contract, offer, acceptance, intention and consideration.

Acceptance must be clear, unambiguous, and unequivocal, Acceptance should meet offeror’s requirement, Acceptance must be in reliance on the offer, Acceptance must be communicated and