Contract Law Exam Notes

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Contract Law Exam Notes

Offer:

An offer is an expression to another of a willingness to be bound by the stated terms

Australian Woollen Mills Pty Ltd v The Commonwealth

Bilateral Contracts

Under Bilateral Contracts each party undertakes to the other party to do or to refrain

from doing something, and in the event of his/her failure to perform his/her

undertaking, the law provides the other party with a remedy.

United Dominions Trust Ltd v Eagle Aircraft Services Ltd

Unilateral Contracts

Under unilateral contracts the promisor undertakes to do or to refrain from doing

something if another party, the promisee, does or refrains from doing something, but

the promisee does not at the time of the offer undertake to do or to refrain from doing

that thing.

United Dominions Trust Ltd v Eagle Aircraft Services Ltd

The position in such cases is simply that the consideration on the part of the offeree

on the part of the offeree is completely executed by the doing of the very thing that

constitutes acceptance of the offer.

Australian Woollen Mills Pty Ltd v The Commonwealth

Offers to the Public at Large

An offer can be made to the public at large.

Carlill v Carbollic Smoke Ball Company

 The defendant (the company) was the manufacturer of a product called the Carbolic

Smoke Ball, which was designed to prevent the user of the smoke ball from

contracting the flu. To promote its product, the Company advertised in a newspaper

to pay 100 pounds to any person who contracted the flu after using one of their

smoke balls in the specified manner for a specified period. The plantiff relied on the

advertisement, purchased one of the smoke balls, and used it in the prescribed period.

The plantiff contracted the flu and sued the Company to recover 100 pounds.

 The English Court of Appeal held that the plantiff was entitled to recover the money

from the Company. The court rejected the Company’s argument that the promise was

not binding because it was not made with anyone in particular. As stated by lindley

LJ, ‘in point of law this advertisement is an offer to pay 100 pounds to anybody who

will perform these conditions, and the performance of the conditions is the

acceptance of the offer’

 In Carlill’s case the offer made to the world at large formed the basis of a unilaterial

contract. This will not always be the case. Depending on the terms of the

advertisement to the general public, the advertisement may constitute an offer which,

if accepted, forms a bilateral contract.

Offers made through the Internet

In recent times, there has been an enormous increase in the extent to which commerce

is transacted through the Internet. The expansion of electric commerce has also

highlighted a number of difficulties, particularly in relation to issues of contract

formation. Given the transnational transactions and processes difficult legal problems

can arise- such as establishing the place and time of contract formation, and the

appropriate legal regime to govern the transaction. Some of the traditional contractual

concepts will continue to be relevant. For example offers made to the public at large

still abide by the principals set about in Carlill’s case.

What is not an Offer?

Mere Puff

Sometimes statements can be regarded only as ‘mere puffery’- the claims are made

only for advertising purposes and mean nothing. In years gone by, it is particularly

common practise to make exaggerated or perhaps unsustainable claims about

products.

Carlill v Carbollic Smoke Ball Company

 Not all statements made in advertising, however, can be dismissed so lightly.

The case of Carlill provides such an example. In that case, it was held that the

statement was more than mere puffery.

 The deposit of £1,000 in the bank was an indication of the manufacturer’s

intention that the offer was genuine.

Supply of Information

The supply of information is not an offer.

A request for information must be discerned from a contractual offer. A clearer

indication of a preparedness to enter into a contract, than merely providing terms or

information upon which a party maybe prepared to enter into such a contract, is

needed.

Harvey v Facey

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Contract Law Exam Notes Offer: An offer is an expression to another of a willingness to be bound by the stated terms Australian Woollen Mills Pty Ltd v The Commonwealth Bilateral Contracts Under Bilateral Contracts each party undertakes to the other party to do or to refrain from doing something, and in the event of his/her failure to perform his/her undertaking, the law provides the other party with a remedy. United Dominions Trust Ltd v Eagle Aircraft Services Ltd Unilateral Contracts Under unilateral contracts the promisor undertakes to do or to refrain from doing something if another party, the promisee, does or refrains from doing something, but the promisee does not at the time of the offer undertake to do or to refrain from doing that thing. United Dominions Trust Ltd v Eagle Aircraft Services Ltd The position in such cases is simply that the consideration on the part of the offeree on the part of the offeree is completely executed by the doing of the very thing that constitutes acceptance of the offer. Australian Woollen Mills Pty Ltd v The Commonwealth Offers to the Public at Large An offer can be made to the public at large. Carlill v Carbollic Smoke Ball Company The defendant (the company) was the manufacturer of a product called the Carbolic Smoke Ball, which was designed to prevent the user of the smoke ball from contracting the flu. To promote its product, the Company advertised in a newspaper to pay 100 pounds to any person who con ...
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