McGowan v Radio Buxton, (2001)
Intention to create legal relations in the formation of contracts in a commercial context.
Facts
Ms. McGowan participated in a competition on a radio station for which the advertised prize was claimed to be a Renault Clio car. Ms. McGowan correctly identified the song on the radio and was informed that she won the competition. When she went to collect the car, the radio station gave her a plastic, toy model of the Clio car instead. Ms. McGowan sued. The radio station claimed the promotion was not a legally binding contract.
Issues
The question arose as to whether the radio station’s advertisement constituted an intention to create legal relations so as to have formed a legally binding contract with the winning customer.
Decision/Outcome
The Court held that there was an intention to create legal relations and that, consequently, the competition and awarding of the prize was a legally binding agreement. The purpose of a promotion or competition is to promote the business which creates commercial advantages and, thus, within this commercial context, the presumption is that there was an intention to create legal relations by the radio station, that can be relied on by members of the public. Further, members of the public who enter into the competition ought to rely on this intention to be legally-bound by the content of the agreement. On the facts, the competition was intended to promote Radio Buxton and Ms. McGowan entered the competition on the basis of a broadcast that offered a Renault Clio. The content of the agreement in the broadcast did not even hint that the prize would be a toy car. Thus, Radio Buxton was legally bound to fulfil its promise and the Court awarded damages of the cost of a new Renault Clio to Ms. McGowan.
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