Carbolic Smoke Ball. (1893) Carbolic issues an ad offering $100 to anyone who gets the flu after using the Smoke Ball. It has $1000 in its bank account. Xxxxxxx gets the flu and Carbolic refuses. Court held it was a unilateral contract, but Xxxxx says the court got it wrong. This was a warranty, not a unilateral contract. It was not an offer so cannot be accepted – no consideration When you bargain it’s because you WANT something. Here, the bargain is for smoke ball and warranty in exchange for cash, not cash in exchange for flu Acceptance by performance is the wrong way to think about “prove me wrong” cases Xxxx x. Corlies & Xxxxx (1871) Xxxxx sends Corlies an estimate for office construction. Corlies replies, “upon agreement to finish the fitting up of offices 57 Broadway in two weeks from date, you can begin at once.” Xxxxx purchases lumber suitable for job and has begun to work on the lumber when Xxxxxxx attempts to revoke the offer. “The offeree did no act which indicated an acceptance of the offer. He, a xxxxxxxxx and a builder, purchased stuff for the work upon the stuff, but as he would have done for any like work. There was nothing… that indicated or set in motion an indication to the offeror of his acceptance of the offer, or which could necessarily result therein.”
Carbolic Smoke Ball. Offer may dispense with need for communication or acceptance takes form of performance; ➢ Acceptance must correspond with offer (mirror image rule). If no mirror image, then there is a counter offer generally and the original offer is nullified; Xxxxxx Machine Tool Co Ltd v Ex Cell O Corporation. Inquries do not amount to counter offers o An acceptance which accepts different terms to that purported in the offer still constitutes a counter offer. o Further, Australian/British contractual system is the “last shot wins” rule in the battle of the forms. Last standard terms proposed before acceptance take effect and apply. Cf UN Sales Convention which applies to Aus international transactions and US model which looks to effect common standard terms and imply rest on basis of law and extrapolation. ➢ Xxxxxxxx v Shoe Lane Parking Ltd (parking ticket machine); Customers are only bound by terms of the offer if notice is brought before acceptance. Customer is not bound by terms of offer if notice is not brought or brought after acceptance. ➢ Knowledge of and reliance on offer (at time of acceptance, offeree must know existence of offer and agreement acceptance must be based on offer made) is required for acceptance; X x Xxxxxx & AWB – unilateral contract is only binding if person’s performance is reliant on or in faith of offer given to them (give u $10 to walk to Brisbane, man walking to Bris anyway-does not constitute acceptance) That is, the acceptance must be referable to an offer. Knowledge of the offer before acceptance is necessary for the existence of the K. o Any person who has knowledge of an offer and then performs its conditions before communicating it establishes prima facie acceptance– this is necessary for consensus ad idem. ➢ Acceptance must be communicated and received by offeror for formation generally; Xxxxxxxxxx, Xxxxxxx & Co v XxXxxx ➢ Exception is Postal acceptance rule: Xxxxxxxx x Xxxxxx; When it must be within the reasonable contemplation of the parties in light of the circumstances, the post may be used as a means of communicating acceptance of an offer which is complete as soon as it is posted (as soon as posted, agreement point) o “Reasonable contemplation of the parties” is where parties contemplate the post as a possible or permitted mode to conclude K not that posting should conclude the K (Xxxxx XX in Xxxxxxx v Xxxxxxx) e.g. offer sent in letter by post with express instructions or implied e.g. through attached reply envelope or; requ...
Carbolic Smoke Ball. Facts Plaintiff used the smoke ball as instructed, which was supposed to prevent influenza, yet still contracted influenza. Sued for what she paid for the ball. Was this a case of ‘mere puffery’? Issues - Mere puffery? - Too vague? - Can an offer be made to the world at large? Or must it be a specific person? - Does acceptance have to be notified? - Can it be contemporaneous with notice of performance? - Was there consideration? Decision - Mere puffery? No, there was money in the bank – seen as proof of the advertiser’s sincerity in the matter. Xxxxxx interpreted the case according to what the ordinary person would think rather than what the defendant said they intended. Decided the offer was meant to be taken seriously. - Too vague? Defendant argued that the offer was too vague, especially with regards to how long the smoke ball was supposed to offer protection for. Court said it was true that there was vagueness however, it could be reasonably inferred that the ball would offer protection for a ‘reasonable amount of time’. - Can an offer be made to the world at large? Or must it be a specific person? Offer can be made to the world at large, as well as a specific category of persons. The offer was seen as for anyone who performed the conditions given in the advertisement. - Does acceptance have to be notified? Did the plaintiff have to tell the defendant they accepted the offer? Generally yes, but offeror can waive the requirement of notice. If the offeror can specify a system by which they want the offer to be accepted, and this may be a system where no notice is given. Even if notice can’t be dispensed with it is still valid for a notice of acceptance to come after the contractual obligations have been performed in this sort of contract. - Can it be contemporaneous with notice of performance? Yes. - Was there consideration? The defendants get an indirect benefit, the advertisement will increase sales. Using the ball as directed is an inconvenience for the plaintiff and a detriment to one party can be a form of consideration for the other. ‘If he is making extravagant promises, it is probably because it pays to make them so there is no reason in law why he should not be bound by them.’ Unilateral contract v bilateral contract Unilateral contract: contract where acceptance of offer is achieved when the party performs their obligations under the contract, other example is a notice for a lost dog.. acceptance of offer is achieved by finding the dog and retu...
Carbolic Smoke Ball. Company (1893)
Carbolic Smoke Ball. Company (1893). In this case, the Carbolic Smoke Ball Company made a general offer through newspaper advertisements promising a reward to anyone who used their product and still contracted influenza. The advertisement stated that the company had deposited 1,000 pounds in a bank to show their sincerity in carrying out the offer.
Carbolic Smoke Ball o A bilateral contract is an offer between distinct parties.
Carbolic Smoke Ball. Special offers o Auction with reserve
