Introduction
Law of contract Case Study is defined as an agreement between two or more parties to offer a service, provide a product, or commit to an act, and it is enforceable by law. It is an expressed agreement that comprises six elements, which make it a binding and legal document. The law of contract case study states that for an agreement to be upheld by the law, it must comprise acceptance, an appropriate offer, consideration, the intention of both parties to enforce the contract, and objects of the contract as well as capacity (Cheshire & Fifoot, 1972).
An offer details specifically what will be provided in the law of contract case study. Acceptance is an element that comprises the agreement by the other party to the offer presented. Consideration refers to the mutual interest for example money; that is being exchanged between the involved parties. The law of contract states that, for a contract to be valid, the parties involved must meet the age criteria and have a sound mind. The law of contract case study is concerned with the legal enforceability of promises (Corbin, 1925, p. 572).
Features of Contract Validity
In the Carlill v carbolic smoke ball case, the company manufactured a carbolic smoke ball and then advertised it as an influenza preventive measure. In the advertisement, the company included that anyone who used their products but was still infected with influenza would be paid 100 pounds. Further, the advertisement included that it had deposited 1000 pounds to demonstrate its seriousness in preventing influenza. After seeing the advert, Mrs. Carlill bought the smoke ball and used it as directed by carbolic instructions. However, she later contracted the influenza flu despite adhering to the product instructions. Mrs. Carlile then filed a lawsuit against the owners of Carbolic Smoke Ball company to recover the 100 pounds. The company’s owners (defendant) argued that the advert did not qualify for an offer. Secondly, the defendant outlined that presenting an offer to the whole public was impossible. Thirdly, the company argued that the statement in the advertisement was wordy and did not state the time limit for contracting the flu and hence it was too vague to constitute an offer. Additionally, the company outlined that it did not receive acceptance notifications from the plaintiff. Lastly, the company argued that no considerations were made and did not specify if the user of the balls must have bought them (McGinnis, 1988, p.130).
In the law of contract case study, the court of appeal held against the defendant and stated that the plaintiff was to receive the advertised reward since the advertisement was an offer of a unilateral contract. This type of contract was enforceable since Mrs. Carlill had accepted the offer by performing the conditions specified in the offer which were to use the ball three times a day, consistently for two weeks. The court argued that, the advert demonstrated the intention of the defendant to keep the promise by depositing 1000 euros in the alliance bank and that the advertisement was not an invitation to treat but rather an offer. Secondly, the court ruled that an offer could be made to the whole public, resulting in a unilateral contract by the public accepting the offer through adhering to the product instructions and user guidelines. The offeree does not communicate acceptance of the unilateral contract to the offerer because acceptance is through full performance (Barnett, 1986).
This case was considered a valid contract since it constituted an offer, acceptance, intention, consideration, sanity, and capacity and therefore it was not a mere invitation to treat. The case had all the main elements of a contract, making it legally valid based on the contract law. An invitation to treat does not meet the requirements of being a valid contract since there is no offer. The court ruled out on the consideration that the company was a promisor and Mrs. Carlill was the promisee if the carbolic smoke ball company had promised to give out 100 pounds to the smoke ball users who still contracted the influenza flu. An invitation to treat entails an invitation for customers to submit an offer. The advertisement in the case did not invite for customers to make an offer for the purchase of the smoke balls while the advert indicated the willingness of the defendant to enter into a contract with the consumers of their products.
Consideration of a Contract
Consideration in the law of contract refers to the mutual benefit or asset to be exchanged by the involved parties. It can also be defined as the price at which one party agrees to compensate the other binding party in order to make the agreement enforceable. A valid consideration must result in gaining something from the other party involved. The law of contract protects the promisee’s reasonable expectation of performance. The court assesses the expectations and considers the reasonable position of the promisor. In considering the Marcus v. Florence case, Florence owed an unsecured loan debt to Marcus ( plaintiff) when Marcus asked for security, Florence promised to provide a piece of land as an asset but never gave it out (Treitel, 2003). When Marcus (plaintiff) tried to impose the agreement for the provision of security, Florence (defendant) argued that Marcus had not put forth any consideration. The court ruled out that the plaintiff can promise not to enforce the debt. But it did not. The plaintiff had shown forbearance, hence making it a valid consideration. Therefore, the agreement on the provision of security was binding.
In another incident at Strathmore University, the police were in their normal line of duty to protect the campus assets during student strikes and boycotts. The owner of the school promised to pay for a police station to be stationed somewhere near the school so that they could take charge when during strikes to prevent the students from destroying the campus assets. The police comprehended and acted, but when inquiring about compensation as promised, the campus proprietor denied releasing the payments, claiming that the police were carrying out their normal duties. However, the court ruled that although the police provided protection, there was discretion as to the form it should take as they had performed extra services. The supplementary services offered by the police acted as an appropriate consideration for the promised money. Therefore, the police were entitled to the payment as the agreement was legally binding (Hale, 1943, p. 512).
Ultimately, any act carried out before the giving of a promise to offer some goods or make some payments can be at most times a consideration for the promise (Williston, 1914). However, the act must have been conducted when the promisor requested it. Promises done in advance are bound to be considered or met. If this is not met, then the consideration is declared past. To illustrate in a case, a farmer hired an employee to plow his farm later when the employee was done, the firm owner promised to pay him $ 400, and they signed a document to this effect. When the employee demanded the payment, the farm owner refused to pay. However, the court ruled that, since the work was covered as a whole in advance, the promise was void since it was past consideration. The law of contract rules out that the consideration must not be past and should move from the promise, part payment of liabilities is not a valid consideration, it should be sufficient and more so adequate.
Donoghue vs Stephenson case
It is also called the snail in the bottle case, an important case in Western law. It was instrumental in shaping the tort law and negligence doctrine. The case is about two friends, Mrs. Donoghue and her friend, who bought a ginger beer and ice cream in a café. The content of the package was not observable because the beer package was translucent. Mrs. Donoghue drank some of the beer and dispensed the remaining over her ice cream, and suddenly a rotten snail floated. Mrs. Donoghue suffered personal injury as a result of the shock. She went ahead and filed a claim against the ginger beer manufacturers (Smith & Burns, 1983, p. 140).
The main issue here was whether the manufacturer owed a duty of care to Mrs. Donoghue in the absence of any contact between them. She took action to determine whether the manufacturing company owed her any compensation due to the injuries she suffered. During that time in Western law, for one to be compensated for such damages, there was a need for an established contractual relationship. The earlier case held that due to the lack of a contract to represent the claims, the industrialist could not pay for any damages caused by consuming its products. Mrs. Donoghue, however, took her claims to the House of Lords, unlike the other complainants. She won the case and hence, the law of negligence and the neighbor test were established.
The Neighbor Principle
The neighbor principle arose from Mrs. Donoghue’s case. The principle was by Lord Atkin. Articulated that who said that people should take reasonable measures and precautions to avoid omissions, which can injure our neighbors. He went on further to question who our neighbors were. In his reasoning, he depicts a neighbor as the person who is directly or is most likely to be affected by our actions and omissions. Therefore, Atkin imposed the liability and negligence of the cafe’s owner, defining that the duty to care for the customers lay in the hands of the café owner. He also outlined the factors of the duty of care.
The neighbor principle, therefore, allowed for the filing of claims related to negligence if any party suffered any injuries. Regarding the principle, liability tort and negligence identified the parties to whom any duty of care was owed in any critical situation and those close enough to be affected by omissions and negligent acts (Veljanovski, 2007). Although the principle does not open all the doors for negligence claims, it is effective enough to ensure that all people owe a duty of care to those bound to be directed by our omission and negligence, for example, in Mrs. Donoghue’s case.
Tests are to determine whether someone is employed or self-employed.
Three tests are carried out to determine the status of employment. It is vital to ascertain the employment status of self-employees and whether they are employees. This is important because some employee rights come from the outcome of being an employee. An assessment of what is required by the law for a worker to be termed as an employee begins with a couple of common law tests established by the courts to aid in identifying the availability of the employment contract. An employee commits to an agreement, which is the legal form of contract between parties, and it’s enforceable by the law.
The tests above are comprised of control, multiple, and integration tests. In detail, the test of control focuses on defining who has the right to take control over what must be done and how it must be done this test is based on the idea that self-employed personnel are bound to take charge of their work sufficiently than an employee. However, people under strict supervision and monitoring are more likely to be classified as employees. The integration test explains why expert workers were granted autonomy in their duties. Many researchers have found that an individual is recruited as part of the organization under a service contract and integrated into the organization. In contradiction, under a contract of service, work done for an organization is not integrated within. The multiple/mixed test focuses on the right of the worker to assign duties to another worker as well as risks and losses of financial risks that are negated under the contract of service, that is, the worker is regarded as an employee.
In conclusion, the law of contract is essential in every business agreement. Before signing any contract, all parties should consider all elements provided by the law of contract to create a valid and enforceable contract. Abnormalities and lack of understanding of the essentials of a valid contract may result in unnecessary suits or invalidation of the whole contract, leading to losses. Additionally, the contract law ensures that every party involved meets the end of the bargain and prevents conflict of interest.
Bibliography
Barnett, R.E., 1986. A consent theory of contract. Columbia Law Review, 86(2), pp.269-321.
Cheshire, G.C., and Fifoot, C.H.S., 1972. The law of contract. Butterworths.
Corbin, A.L., 1925. The Effect of Options on Consideration. The Yale Law Journal, 34(6), pp.571-590.
Hale, R.L., 1943. The Supreme Court and the Contract Clause. Harv. L. Rev., 57, p.512.
McGinnis, J.D., 1988. Carlill v. Carbolic Smoke Ball Company: Influenza, Quackery, and the Unilateral Contract. Canadian Bulletin of Medical History, 5(2), pp.121-141.
Smith, J.C., and Burns, P., 1983. Donoghue v. Stevenson—The Not So Golden Anniversary. The Modern Law Review, 46(2), pp.147-163.
Treitel, G.H., 2003. The law of contract. Sweet & Maxwell.
Veljanovski, C.G., 2007. The Economic principles of law. Cambridge University Press.
Williston, S., 1914. Consideration of Bilateral Contracts. Harvard Law Review, 27(6), pp.503-529.
Wong, E., 2005. Invitation to Treat: The Eleanor Wong Trilogy. Firstfruits.
