Case Study on Legal Issues
Added on 2021-04-19
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Analysis Question 1(a)Legal IssuesThe key issue of this case revolves around the presence of a binding contact between Leila and Julie based on the advertisement given in the local newspaper. Rule: Premise and AuthorityA contract denotes a promise being made which has legal validity, where one party agrees that they would do the promised task under the contract, and the other party agrees that they would make payment of the consideration value, as was decided between both the parties (Abbott, Pendlebury & Wardman, 2007). A contract can be formed orally, where the parties exchange the terms of contract in a spoken manner. On the other hand, a contract can be created in written manner, whereby the terms of the particular contract are provided on a document and the parties to the contract signing such document (Marson & Ferris, 2015). For the purpose of forming contract, there is a requirement for certain important or essential elements to be present in a contract; these include offer, acceptance, consideration, intention, legality and capacity (Gibson & Fraser, 2014). The first step in creating a contract is for an offer is to be made by one party. This offer needs to be clearly stated and needs to provide the details of the terms being offered by the offering party. It is important that an offer is differentiated from an invitation to treat, as the former shows the intent of getting in legal relations, but the same is not present in invitation to treat, which denotes only the negotiation phase of contract, which may or may not be present in every case (Paterson, Robertson & Duke, 2012). In invitation to treat cases, the individual is not Page 2
Analysis obligated to sell the advertised products, as had been seen in Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401. In general, the advertisements which are placed in the newspapers are invitation to treat, as was seen in Partridge v Critenden (1968) 2 All ER 425. However, there are cases when the advertisements in newspapers are taken to be an offer.For this, reference needs to be made to Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256. In this case, a newspaper advertisement was given by the defendant providing that where a person got sick with influenza, even after using their product in the prescribed manner, they would get an award. The plaintiff used the product and still fell sick. This led to a case being raised as the defendant denied paying the rewards money stating that the advertisement was an invitation to treat. However, the court stated that this was not the case and that a unilateral offer had been made in this case. Upon such an offer being made, the other party only has to undertake the performance of the promise to give their acceptance (Latimer, 2012). The next requirement in formation of a contract is for the presence of an acceptance. The offer which has been made by the offering party has to be accepted in the exact manner it was made, by the accepting party (Andrews, 2015). Where there is any change in the communication of acceptance, it would result in a counter offer being made based on Hyde v Wrench (1840) 49 ER 132. The acceptance has to be unequivocal, clear and unambiguous. In context of acceptance,it is crucial that the acceptance is given in the mode which had been prescribed by the offering party. The acceptance date is taken to be such date when the acceptance is communicated to the offering party; in other words, the day on which the acceptance reaches the offering party, is the date of acceptance (Blum, 2007).Page 3
Analysis The next requirement for creating a legally binding contract is for the value of consideration being present, which needs to have economic value, as without valid consideration,a contract is not deemed as valid. However, the parties are free to decide the value of consideration, as it needs to be sufficient not adequate (Stone & Devenney, J. (2014). For instance, in Chappell v Nestle [1960] AC 87, three wrappers had been accepted as valid consideration in this case due to condition precedent. The next requirement in creating the contract is for the parties to have the intention of creating legal relations, which can give rise to possible liabilities for the parties in future, in addition to giving them certain rights (Elliot, 2011).The terms of the contract need to be legal as an illegality in the contract, in terms of presence of coercion, can render the contract void. Lastly, the contracting parties need to hold the capacity ofentering into the contract, in terms of holding the legal age under the eyes of law (McKendrick, 2014). ApplicationIn the present instance, an advertisement had been placed in the local newspaper. There isa need to decide here whether this advertisement was an offer or an invitation to treat. This requires careful analysis of the wordings of the advertisement. This advertisement was a unilateral offer as it was an open offer for any person who was reading this advertisement that if they found the lost gold locket and chain, they would get the reward based on Carlill v Carbolic Smoke Ball Co, as against Partridge v Critenden due to presence of unilateral offer. An individual only had to find the lost gold locket and chain and the offer would deem to be accepted. There was consideration value of $50 making it valid consideration based on Chappell v Nestle. There was no mode of acceptance provided in the advertisement. Only the phone number Page 4
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