Schmepsi Ltd offered in its website $30 million worth Ducati motorcycles to the consumer who collected 20 million tokens the Schmepsi gave along with each can of its soft drink consumer. @ 1 token per can, under what was called a competition scheme. There were other schemes of the competition by which if the consumer the collected 100 tokens, he could exchange them for caps with Schmepsi logo and where the consumer collected 500 tokens he could exchange them for a T-Shirt with Schmepsi logo.
The Advertiser Schmepsi refused to give the reward saying that it was only an advertising gimmick and 'a bit of a joke' Michael wants to know if he has contractual rights against the Schmepsi for the $30 million worth of motor cycles.
According to Contract Law, an offer once accepted, it makes a binding contract between offeror and acceptor. In the above case actually the offeror is Michael and not Shemepsi for the following reasons. Generally advertisements are treated as not offers but an invitation to treat i.e. invitation to make an offer. What Schemepsi has done is only an invitation to treat by making an invitation to collect a certain number of coupons in exchange of a prize. Bold, unimaginable, and impractical orders are made in the form of advertisements deliberately to attract attention and not to really be bound by them. Who ever notices such advertisements should not be carried away by them and not make serious commitments based on them as they could always be avoided by the advertisers on the plea that they were only invitation to treat (invitation to bargain in" U.S") (invitation to offer in "India")
"An invitation to treat invites another to make an offer which can be accepted or rejected. In Fisher v. Bell  1 QB 394 the court held the display of an article for sale is not an offer for sale. Similarly, Pharmaceutical Society of Gt Britain v. Boots Cash Chemists  1 QB 401 held that displaying goods for sale on a supermarket shelf was not an offer. In Partridge v.Crittenden  2 All ER 421, Partridge was convicted for offering for sale wild birds by an advertisement in a 'classified advertisements' column but the conviction was quashed since the advertisement was only an invitation to treat. In the same way in Harris v. Nickerson (1873) LR 8 QB286, a broker failed to recover damages for breach of contract after attending an advertised sale when the lots he was interested in were withdrawn. Advertisements by companies may constitute an offer. In Carlill v.Carbolic Smokeball Co. (1893), the defendants in a series of advertisements offered to pay 100 to any person who contracted influenza after using their patent 'smoke ball' three times a day for two weeks and stated that they had deposited 1000 in a bank to meet any claims. The plaintiff sued for 100 and the court held that the deposit of the 1000 indicated an intention to pay claims and that the advertisement was an offer. Brochures, pricelists and so on are invitations to treat, as are quotations" ( Judge, Stephen. Business Law (2nd ed.).New York, NY USA: Palgrave Publishers, 1999.p 113.http://site.ebrary.com/lib/britishcouncilonline/Docid=2003005&ppg=113)
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(“Contract Law. Questions Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
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(Contract Law. Questions Essay Example | Topics and Well Written Essays - 750 Words)
“Contract Law. Questions Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.net/miscellaneous/284286-contract-law-questions.
The law has provided for remedy in an event one or both parties breach the contract; the remedy for breach of contract is damages or monetary compensation. Basically, there are three types of contracts: contracts that require written evidence, written or specialty contract, and simple contracts.2 Of particular importance to this paper is simple contracts; simple contracts are those which are formed without any legal formalities and they can be written, implied, or oral such as in partnership agreements and sale of goods contract.
The first relates to the requirement that only the promisee is entitled to enforce the contract, thus, barring a third party from enforcing it himself (Dunlop Tyre Co v Selfridge )1. The second pertains to the requirement of consideration that is an essential ingredient in the formation of a contract.
In the cases given, one of the important points for consideration is the legal status of the advertisement. Also, there are questions related to offer, acceptance, competency to contract and lawful object. The validity of the contract should be ascertained with reference to these questions involved.
When the mistake is operative the contract is usually void ab initio, i.e., from the beginning. Therefore, no property will pass under it and no obligations can arise under it.
Regarding various types of mistakes, common mistake is one when both parties make the same error relating to a fundamental fact.
Secondly, there must be an "acceptance", an unconditional assent to a definite offer. These two combine to create certainty that a contract has been formed, for, as in Scammell v Ouston (1941), "if an agreement is uncertain on some important issue.the courts will hold there is no contract."[
A condition is a term of vital importance and goes to the root of the contracted. It is basic and primary to the contract its breach, if committed by the seller gives the buyer a right to reject goods completely and refuse to pay the price and if the price has already been paid to recover the same.
Bank loans were the major source of debt financing till date. In recent times, Debt financing has added a new instrument by issuing bonds.
Bonds are loans raised from market where, principal and interest in the form of coupons have to be paid periodically on agreed terms.
able estoppel prevents a person from adopting in Court a position that is contrary to an original position that may have been relied upon by another party. In the case of Grundt v Great Boulder Proprietary Gold Mines Ltd,1 Dixon J clarified that the protection that was sought
se of one or more provisions of, or made under, primary legislation which cannot be read or given effect in a way which is compatible with the Convention rights, the authority was acting so as to give effect to or enforce those provisions.
The meaning of the word
Thus, offer presents and implied intention to create legal relations as observed by Burnham (2011:117).
Upon acceptance the two parties are legally bound by the terms thereto and as such, the contract shall have been affected (Scott & Kraus, 2007:83).
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