LLB 120 Study Guide - Final Guide: Equity Sharing, All England Law Reports, Paull
1
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
Procedural history: The defedats aufatued a deie alled a Caoli “oke Ball hih
claimed to prevent colds and influenza. This is an extract from the advertisement they released:
poud 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 the cold, after having used the ball
thee ties dail fo to eeks… pouds deposited ith the Alliance Bank, Regent Street,
sheig ou sieit
Carlill purchased a smoke ball from a chemist based on the faith of the advertisement and used it in
accordance with manufacturers instructions. She contracted influenza. The trial judge ordered the
Carbolic Smoke Ball Company to pay the 100 pounds so the defendant appealed
Material facts: The defendant claimed that the advertisement was a mere puff, however, it was
foud that a distit poise as epessed hih is uistakeale: poud ead ill e paid
the Caoli “oke Ball Copa to a peso ho otats iflueza ad the stateet
pouds is deposited ith Alliae Bak, sheig ou sieit i the atte is poof that the
company is sincere in their promise to pay the 100 pounds. This is an offer to anybody who performs
the conditions named in the advertisement, and anyone who performs the conditions accepts the
offer. There was also the argument that the sale of the carbolic smoke ball was directly beneficial to
the advertisers which was enough to constitute a consideration
Issue and result: Whether all the elements which are necessary to form a binding contract
enforceable in point of law is present in the advertisement. Result: the defendant was ordered to
perform their promise and the appeal was dismissed
Reasoning: In order to reach a conclusion, the judge read the advertisement in its plain meaning,
how any ordinary person reading the document would read it. The defendant took the trouble of
purchasing the ball, which benefited the defendant however she still contracted the illness.
Gibson v Manchester City Council (1979) 1 WLR 294
Procedural history: in 1970 Manchester City Council adopted a scheme allowing tenants to purchase
the title for the home they were living in. They wrote a letter to Robert Gibson saying the council
a e pepaed to sell the house to ou ad asked hi to oplete a appliatio fo. Loal
government elections then took place and the Labour party took over who abandoned the scheme.
They denied there was a binding contract with Gibson, however, Gibson claimed there was a
contract and sued to enforce it
Material facts: The only contract alleged was one made by documents passing between the parties.
The claim alleged there was an offer by the council to sell the title for the house and an acceptance
in writing from Mr. Gibson. Judge Bailey stated the documents did amount to an offer and
acceptance and ordered for the sale of the house. The council appeal was dismissed by a majority of
the Court of Appeal. The council took it to the House of Lords. Geoffrey Lane Lj stated the
documents provided did not constitute a contract as they were just a step in the negotiations for a
contract which never reached fruition
Issue and result: Whether in the correspondence the parties there can be found a legally
enforceable contract for the sale by the Manchester Corporation to Mr. Gibson of the dwelling
house of which he was the occupying tenant at the relevant time in 1971. Answer: Appeal allowed
Reasoning: There was no contractual offer by the corporation available for acceptance
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2
Mobil Oil Australia v Wellcome International (1998) 81 FCR 475
Mobil operated an incentive – the Circle of Excellence. A new scheme was implemented where a
franchisee who achieved a score of 90% or above in the 6 years following 1991 would be granted a
nine year renewal of their franchise with no cost. At regional meetings a tear off slip was given to
the franchisees indicating that the ould aept the hallege. Ma fahises siged ad
returned the slip and spent a lot of time improving their business. Mobil announced in 1994 that it
ouldt gat eeals fee of hage, ut it ould disout the eeal fees. fahises
commenced proceedings against Mobil.
In a unilateral agreement the act of acceptance is also the consideration and act of performance. In
this ase Moils eoatio of its shee ade it ipossile fo the deales to oplete the at of
acceptance. The trial judge held that once an offer was made, requiring performance as the act of
acceptance, the offeror could not revoke the offer once the offeree has embarked upon acceptance.
The Full Cout disageed. Although i soe ases thee a e a iplied ailla uilateal
otat i hih the offeo poises ot to eoke oe the offeee oees pefoae,
that is not the same as saying that the original offer cannot be revoked - ad thee is o uiesal
popositio that a offeo is ot at liet to eoke the offe oe the offeee oees o
eaks upo pefoae of the sought at of aeptae …'
Pharmaceutical Society of Great Britain v Boots Cash Chemist [1953] 1 QB 401
Procedural history: Boots operated a self-service shop and in one part drugs were displayed. This
part of the shop was under the control of a registered pharmacist. A customer could take the drugs
they wanted from a shelf and put them in a basket to take to the cash register. When a customer
took drugs to the register, the pharmacist supervised the transaction. The Pharmacy and Poisons Act
1933 UK ade it ulaful fo a peso to sell etai dugs uless the sale is effeted , o ude
the supervision of, a registered phaaist
Material facts: The point taken by the plaintiff that the purchase is complete when a customer takes
an item and puts it in their basket. If that is right, when the customer goes to the cash register, the
registered pharmacist has no power to sa this dug aot e sold to this ustoe. The otat
is therefore not completed until the customer indicates the items he needs and the shopkeeper
accepts that offer. There is no reason for drawing a different implication from the layout of the
pharmacy. This case fails as it is admitted that there was supervision in the sense required by the Act
Issue and result: Whether a contract is regarded as being completed when the article is put into the
basket. Result: Lord Goddard found that the sale of drugs i the ae desied didt otaee
the Act. The appeal was dismissed
Reasoning: The transaction is in no way different from the normal transaction in a shop where there
is no self service. It is wrong to say the shopkeeper is making an offer to sell every article in the shop
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3
MacRobertson Miller Airline Services v Commissioner of State Taxation (1975) 133 CLR 125
Procedural history: A person who wanted to fly with MacRobertson Miller Airline Services would be
advised, on inquiry, what seats were available to the destination and the fare. The prospective
passenger was then handed a ticket, which included the flight details, in return for the fare. The
passenger then presented their ticket at the time of boarding the flight. A condition of buying the
ticket was that the airline had the right to abandon any flight or cancel any ticket and upon that
abandonment, the passenger would be entitled to a refund and the airline was under no other
liability for failure to carry the customer
Material facts: The airline operator does not by the terms of the ticket assume or offer to assume
a oligatio to a the itedig passege. The ase ist oe i hih a oligatio is assued.
The legal analysis of the situation which arises on the making of a reservation, the payment of the
fare and the issue of the ticket. The airline conveys that if a person purchases a ticket and presents it
at the time of flight, they are entitled to retain the fare, likewise if the airline is ready and willing to
carry the passege ad the passege hast peseted theseles at the tie of flight, the hae
still earned the fair. However, if the airline cancels a ticket, the passenger will be reimbursed.
This is an example of the payment of a reward for an act performed at request with no antecedent
promise by the person performing the act to do so.
Issue and result: Deteiig hethe the tiket puhased ad issued to a ustoe as a
ageeet o a eoadu of ageeet. ‘esult: The High Cout of Austalia found that the
issue of a ticket by an airline operator neither constitutes an agreement or a memorandum of an
agreement. The appeal was allowed.
Reasoning: The exemption of the ticket in this case fully occupies the whole area of possible
obligations, leaving no room for the contract of carriage
Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424
Procedural history: Australian Woollen Mills (AWM) claimed there was a unilateral contract
etee the ad the Cooealth goeets wool subsidy scheme. The scheme was
introduced after World War II when wool was scarce. The Commonwealth subsidised purchases of
wool to enable manufacturers to supply woollen products at low prices. AWM purchased large
quantities of wool including in April, May and June 1948 in respect of which the subsidy had not
been paid. In June 1948 the Commonwealth discontinued the scheme but would ensure each
manufacturer would have a certain amount of subsidised wool in stock. The stockpile of wool that
AWM held exceeded this amount so the Commonwealth required AWM to repay the subsidy on the
excess. AWM repaid that amount but later sued to recover it, along with the unpaid subsidy on the
April, May and June purchases
Material facts: The court found that it was impossible to hold that any contract was constituted
binding the Commonwealth to pay a subsidy in consideration of purchase of wool for local
manufacture. AWM appealed to the privy council.
The privy council found that the basis of the scheme was not contractual but administrative as the
letters contained statements of policy, not contractual offers. If the intention had been to provide a
contract, AWM would have received a form containing provisions which could be applied by the
court. The number of uncertain factors make it natural that the basis should be administrative
Issue and result: Whether there was a contract between AWM and the Commonwealth
goeet. ‘esult: the out foud that thee ast ad AWMs appeal as disissed
Reasoning: The presence of a request does not establish a contract
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Document Summary
Carlill v carbolic smoke ball co [1893] 1 qb 256. Procedural history: the defe(cid:374)da(cid:374)ts (cid:373)a(cid:374)ufa(cid:272)tu(cid:396)ed a de(cid:448)i(cid:272)e (cid:272)alled a (cid:862)ca(cid:396)(cid:271)oli(cid:272) (cid:373)oke ball(cid:859) (cid:449)hi(cid:272)h claimed to prevent colds and influenza. Carlill purchased a smoke ball from a chemist based on the faith of the advertisement and used it in accordance with manufacturers instructions. Carbolic smoke ball company to pay the 100 pounds so the defendant appealed. This is an offer to anybody who performs the conditions named in the advertisement, and anyone who performs the conditions accepts the offer. There was also the argument that the sale of the carbolic smoke ball was directly beneficial to the advertisers which was enough to constitute a consideration. Issue and result: whether all the elements which are necessary to form a binding contract enforceable in point of law is present in the advertisement. Result: the defendant was ordered to perform their promise and the appeal was dismissed.
