The assignment requires a detailed analysis of the Carlill v Carbolic Smoke Ball Company case, including an examination of the unilateral offer, consideration, and acceptance. It also involves a critical evaluation of the decision's impact on contract law, as well as references to relevant legal texts.
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Running head: BUSINESS LAW Business Law Name of the Student Name of the University Author Note
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1BUSINESS LAW Table of Contents Facts of the Case..............................................................................................................................2 Arguments of the plaintiff...............................................................................................................2 Arguments of the defendant.............................................................................................................3 Reason for the decision....................................................................................................................3 Comment on decision of court.........................................................................................................4 References........................................................................................................................................6
2BUSINESS LAW Carlill v Carbolic Smoke ball Company [1893] 1 QB 256 Facts of the Case TheCarlill v Carbolic Smoke Ball Company [1893]held inCourt of Appealis a landmark case that was decided byJudges Bowen LJ, Lindley LJ and A.L. Smith. As per the facts of the case, thedefendant,Carbolic Smoke Ball Companyadvertised in thePall Mall Gazetteand other newspapers in1891that its productCarbolic Smoke Ballprevents colds and influenza, if it is used thrice a day for two weeks. The makers of the product confidently advertised that anyone who uses the carbolic smoke ball in the prescribed way for a particular period and still catches cold or influenza afterwards shall be awarded£100from the company. The company deposited£1000in theAlliance Bankas a guarantee of the reward. TheplaintiffLilli Carlillpurchased the Smoke Ball and used it as per its direction but she caught flu after using it for several weeks. The issue in the case was whether the contract between the parties was binding upon them. She claimed her£100from the company and the court decided in her favor. The defendant made an appeal but the decision was again made in favor of the plaintiff, entitling her to receive compensation of£100. Arguments of the plaintiff The plaintiff argued that the advertisement made by the defendant amounted to a valid offer which obligated both the parties to fulfill the same. It formed a valid contract as it included all the valid elements of a contract that is, an offer, an acceptance, consideration and legal intention (Schwartz & Walters, 2016). The promise was valid and purchase of the product implied acceptance. The company provided consideration of£100 on performance of the offer.
3BUSINESS LAW The deposition of the £1000 in the bank guaranteeing the reward signified legal intention to fulfill the offer.Therefore, they were legally bound by the contract. Arguments of the defendant The defendant contended that the contract was not binding upon them, as they did not have any means to check the product-use by consumers or clarify whether the consumer had used the ball as per the directions. Further, there was no specific time limit and the terms of the contract was not clear making the offer too vague to make a contract. The defendant also contended that a person might claim the contracted influenza 10 years after the use of the product, which would be unjustified. Furthermore, a contract requires an intention to be communicated to accept the offer or performance of some obvious act. Reason for the decision The decision made in favor of the plaintiff was justified based on the reasons provided by the judges.The judges decided that the advertisement was an express promise as it expressly stated that£100shall be paid who contracts influenza or flu after using the product as per directionsfortwoweeks(Andrews,2015).Thecontractwasnottoovaguetobecome enforceable, as the promise was not merely a puff that is evident from the fact that it deposited £1000in the bank as a guarantee to pay the reward after the fulfillment of the promise. Further, in unilateral contracts, the notification of performance amounts to acceptance of the offer and the fulfillment of any particular condition of the offer shall amount to consideration.
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4BUSINESS LAW The defendant argued that the words of the promise were ambiguous but it was not too vague to understand as it clearly stated that any person who fulfils the offer shall be entitled to a claim of£100as a reward. Thus, the contract was binding upon the parties. Comment on decision of court From the decision of the case, it can be inferred that a promise is binding even in case of a unilateral offer and the words of the promise can be interpreted reasonably and is not vague. In case of unilateral contracts, it is not necessary to communicate the acceptance of the offer (Fried, 2015). If an offer made to the world at large does not require notification of performance either impliedly or expressly, the performance of any particular condition mentioned in the offer shall amount to an acceptance of the offer and the consideration of the promise as well. Further, statements made in advertisements may be mere‘puff’and does not have a legal binding but if a clear promissory intention is established that has a legal binding effect, it may amount to a unilateral offer (Smits, 2017). The opposing view that was contended by the defendant that the contract was not binding as contractual terms were vague and acceptance was not notified cannot be agreed to because the advertisement was a unilateral contract, which is acceptable on fulfilling of its conditions without requirement of formal acceptance. The advertisement was not merely a puff as the deposits of £1000 signified sincerity and a guarantee to pay the award on fulfilling the performance. The consideration element was present which is evident from two instances. Firstly, the defendant company received benefit in the form of sales resulting from the advertisement made in the newspaper, which were directly beneficial to the company. Secondly, performance of any particular condition of the offer shall amount to consideration of promise.
5BUSINESS LAW This is evident from the direct detriment or inconvenience caused to the person who uses the smoke ball thrice a day for two weeks as per the directions mentioned by the company (McKendrick, 2014). In this case, the plaintiff has accepted the unilateral offer made by the defendant and notified the acceptance after performance of the offer and the offer was continuous without being revoked (Kötz, 2017). Since the determination of a serious offer shall be determined from the conduct and words of the parties, the deposition of£1000in the bank as a guarantee of reward, the fulfillment of the offer terms by the plaintiff and the continuation of the offer amounts to a valid contract which is legally binding upon the parties.
6BUSINESS LAW References Andrews, N. (2015). Contract law. Cambridge University Press. Carlill v Carbolic Smoke ball Company [1893] 1 QB 256 Fried, C. (2015). Contract as promise: A theory of contractual obligation. Oxford University Press, USA. Knapp, C. L., Crystal, N. M., & Prince, H. G. (2016). Problems in Contract Law: cases and materials. Wolters Kluwer Law & Business. Kötz, H. (2017). European contract law. Oxford University Press. McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK). Schwartz, M. H., & Walters, A. J. (2016). Contracts: A context and practice casebook. Carolina Academic Press. Smits, J. M. (Ed.). (2017). Contract law: a comparative introduction. Edward Elgar Publishing.