Corporations Law

Running head: CORPORATIONS LAW
CORPORATIONS LAW
Name of the Student
Name of the University
Authors Note

CORPORATIONS LAW
1
Section 1:
Answer 1:
Issue:
The issue that has to be discussed in this case study is whether the manufacturer is
liable to pay John 10,000 $ as per the law of contract.
Rules:
The case to be referred here is the Carlill v Carbolic Smoke Ball Company [1892]
EWCA Civ 1. As per the decision of the case, it was held that any advertisement having
certain specific terms to get a reward formed a unilateral binding contract that any person can
accept by performing or doing the terms given in such contract to get the reward.
Application:
As per the facts given in the case, advertisement in a local newspaper publishes that
all natural health drink can prevent people from mumps and if the customers drink health
drink bottle every day for one year, then the manufacturer will pay a compensation of 10,000
$ to anyone who will be later on diagnosed with mumps. John, after going through the
advertisement, had one bottle every day for one year continuously. However, he was attacked
by mumps after two years and was admitted to hospital for two weeks. Thus a unilateral
binding contract is formed between John and the manufacturer. He performs the terms as laid
down in the advertisement. But the manufacturer failed to perform the contract as per the
advertisement as he suffered from mumps in spite of having the drink for one year.
Conclusion:
Thus it can be concluded that the manufacturer is liable to pay John 10,000 $ as per
the law of contract.

CORPORATIONS LAW
2
Answer 2:
Issue:
The issue is whether a valid contract is created between John and his grandparents.
Rule:
Contract can be defined as an agreement legally enforceable that has been entered into
by the parties freely to form a legal relationship. Thus the parties to the contract must be with
free consent to form the agreement without any force, undue influence or misrepresentation.
When one party is at a special disadvantage or where a party exercises undue influence, then
the contract will be void or voidable at the option of the parties.
Application:
As per the facts of the case, John lives with his grandfather to take his care. He
persuaded him to sell his house to him at 40,000 $ where the original market price of such
house is 200,000 $. As per the rules discussed above, the contract is void as John exerted
undue influence on his ill grandfather and hence persuaded him. This type of observation is
also seen in Johnson v Buttress [1936] HCA 41, (1936) 56 CLR 113 case.
Conclusion:
Thus from the above discussion, it can inferred that the contract created between John
and his grandparent is void.
3. One of the types of unfair terms is the exclusion clause where one party tries to exclude or
evade from his liability out of a contract entered by him. It is a term or clause in the contract
that restricts the rights and liabilities of the parties to the contract. The concept of exclusion
clause is based on the common law of contract.