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Published: Fri, 02 Feb 2018

The Contract Involved With Advertising

Andy has advertised a missing dog in a local newspaper, since doing so several scenarios have occurred as a result of this. Below I am going to explain Andy’s legal rights and obligations in the different scenarios and with each individual.

To help with this task it is important to identify what this advertisement means within the legal system and its implications to Andy and others. Generally speaking most advertisements are called Invitation to treat, this is where one party invites another to make an offer; it is in itself not an offer. This is important to note as an invitation to treat has no legal value in the eyes of the law.

Now, Andy has not presented a simple advertisement, he has however made a Unilateral offer through his advertisement. An advertisement becomes an offer (not an invitation to treat) when it has a reward and an actionable term to which the reward may be acquired, it also has to be clear and concise and advertised to the public. The offer he has made is Unilateral, which means one party (Andy) makes an offer and the other party just accepts it, generally by performing the act stated in the offer. Why it is important to identify this advertisement meaning within the legal system is that this Unilateral offer does indeed hold value within the legal system and therefore holds Andy to a set of rules and regulations with other parties who may try to accept the offer.

An example of such an offer and its legal obligations to the offeror is found in the leading case of Carlill v. Carbolic Smoke Ball (1893). It was simply stated by the Carbolic Smoke Ball company in advertisements in the Pall Mall Gazette and other newspapers in 1891 that a £100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks, according to the printed directions supplied with each ball. The company also went onto state that a £1000 is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter. When Mrs Louisa Elizabeth Carlill contracted influenza after using the balls as stated she made her claim to which the company tried to contend that the offer wasn’t serious. The matter was taken to court and it ruled that the Carbolic Smoke Ball company was bound in contract to pay Mrs Louisa Elizabeth Carlill £100 as the company had made a unilateral offer through the advertisement.

In this example we see that Andy will have to pay the reward of £5,000 to any person meeting the criteria of his offer. I will now go onto explain the law surrounding unilateral contracts.

One of the scenarios is that Stan, a shepherd finds the dog attacking his sheep and captures it. He takes the dog to old castle, finds out about the advertisement and goes to Andy claiming his reward for finding the dog. The law states that no-one can accept an offer they do not know about so Stan has started to perform the act without finishing it with no knowledge he was fulfilling the requirements. If Stan had taken the dog back without knowing of the advertisement and therefore the reward attached upon later founding out, he wouldn’t be able to enforce the reward be paid to him as he could not have accepted the offer he wasn’t aware of.

But in this case Stan had not finished the actionable term in the advertisement; he would at that point be able to agree to the term by finishing off the requirement of returning the dog to Andy and therefore be able to claim the reward.

Within unilateral offers there is an issue surrounding domestic and social arrangements. It is generally accepted that there is no intention to create legal binding contract between the offeror and family members, friends and colleagues. This is on the assumption that the offeror and the domestic or social related offeree are in a good relationship, otherwise if the two parties are in disagreement or otherwise in a bad relationship then a legally binding contract can be formed.

In the case of Balfour v Balfour [1919] it is made clear that within domestic and/or social arrangements there is no intention to create a legally binding contract. The Judge Atkin L.J. held that “it would inappropriate for the courts to interfere with such domestic matters, stating that agreements such as these are outside the realm of contracts altogether.” Atkin L.J. also noted the threat of a flood of litigation were such agreements held to be enforceable contracts.” REFRENCE NEEDED help if placing that TG?

So assuming that Stan is Andy’s younger brother if the two were in an amicable relationship then by Stan performing the actionable term does not become an acceptance to Andy’s offer and no enforceable agreement is made. If on the other hand their relationship was not of good standing and had come to an end then there would be an intention to create legal relations; Stan the younger brother would be able to perform the actionable term and claim the reward.

A small note should be added in advising Andy of how he should (if needing to) treat Bolam, who seeing the advertisement started to performing the actionable term. Indeed his beginning of the search for the dog is a method of acceptance but was not fully fulfilled to the end as the dog was found by another. Therefore Bolam holds no claim to the reward on offer.

With unilateral contracts there are particular methods and cases concerning the discharge of a contract. The discharge of a contract would be where a factor of some kind within the eyes of the law has caused the contract or offer to be not longer available or enforceable.

In some cases people who have presented a unilateral offer in the method of a advertisement in a similar fashion to Andy want to retract/cancel it from peoples acceptance; such a thing can be done but has to be so in a particular manner. To withdraw an offer such as this the law states that the withdrawal must be done so, using the same medium as the advertisement; in Andy’s case a newspaper advertisement stating the close of the offer must be presented to officially withdraw the offer, the notice in the shop window does not legally see the offer as withdrawn. If the dog was found by Bolam returned after the Andy’s shop window notice, then Bolam has every right to claim the reward.

Within the discharge of contract there is also an applicable doctrine to Andy, that is the doctrine of frustration. Such a doctrine deals with the frustration (ending) of a contract when the subject matter is no longer in existence. In this case this would be if someone found Andy’s dog dead, do they have a claim to the reward? The offer will be subject to the doctrine of frustration as and when the dog died (no longer be in existence or otherwise stated in the doctrine in good working order) before being found, thus ending the offer; if any person or persons had begun the task of finding the dog (therefore entering into the contract) the reward would not be claimable to any party upon finding and returning the dead dog. Both parties (offeror and offeree) if there has been a frustration causing the offer to be withdrawn will be exempt from all further obligations and return to their previous conditions as if no contract had been entered into.

In conclusion if Andy’s dog had been found and was in a healthy condition after being captured by Stan who in this case is the younger brother of Andy, and presuming they were in an amicable relationship, there would be no valid or enforceable contractual agreement. I would be considered as a domestic or social arrangement.

Considering Andy’s dog had been found and returned dead the in co ordinance with the doctrine of frustration the subject matter is no longer in existence. This would then frustrate the contract and bring both parties out of any obligations that the unilateral offer that Andy had placed may have put them in.

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