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Contract Law - Cases.docx

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Department
Philosophy
Course Code
Philosophy 2080
Professor
James Hildebrand

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Offer & Acceptance • To form a contract, you need an offer, communicated to another party, who must accept that offer before a contract can be formed • Can also be issue as to whether both parties understand exactly what has been offered and accepted, or whether both parties understand that the offer was an offer & acceptance was an acceptance • Parties’ shared knowledge of what has been agreed to: consensus ad idem (meeting of the minds) - Can be an issue regarding all the elements of a contract - Necessary but not a sufficient condition - just because you have consensus doesn’t mean you have a contract, but you can’t really have one without it • Offer made by Offeror • Acceptance given by Offeree • Acceptance must be communicated to offeror, generally contract happens when acceptance communicated Carlill v. Carbolic Smoke Ball Co. • Court determined that the way the defendant set up the contract, it implied no communication of acceptance was required • Since acceptance is required, the court held that acceptance in this kind of contract would be by the offeree’s performance of its obligations • Unilateral contract, & offer that implied no communication of acceptance was required • Facts: o Defendant company advertised its product as preventive of influenza, ad claimed that if product was used as directed, wouldn’t get sick, if did get sick, co would pay 100 lbs. o Plaintiff used the product, got the flue, hubby said sue • Defendant argues: o Not a contract with π, but ad to the public at large, no one identified in particular, no offer to π o No acceptance o No notification of acceptance, o Ad was mere “puff” not to be taken seriously o If taken seriously is then in the nature of a bet - not to be enforced at law o Or in the nature of an insurance policy - by statute defendant has no license or legal right to sell insurance • Held: o Not a bet, not a policy of insurance o Express promise to pay $ o Not “puff” - reference to money on deposit to dispel notion of puffery, establish defendant’s sincerity o Offer is to all who perform the conditions in the ad o Any person who performs conditions, accepts the offer   Performance of conditions = acceptance of offer = unilateral offer/ contract o Consideration as a benefit to defendant offeror in sale of product, in the particular case as well as promotion of sales in general o Consideration as a detriment to π, offeree, spent money, took drugs o Circumstances show the defendant did not require communication of acceptance Pharmaceutical Society of Great Britain v. Boots Cash Chemists • Not a contract case: o No one is suing anyone for the breach of an obligation, no one is trying to force anyone to perform it’s obligations under a contract o Society is trying to argue a breach of a statutory obligation, and prove the case based on contract principles o π argument doesn’t make sense because  If a customer accepted the offer of the merchant when it selected the product off the shelf, then the customer could not change its mind and put the item back on the shelf  In fact, the customer offers to purchase at the cash register, such offer accepted or rejected by the merchant • Facts: o Defendant ran a self–serve store, packages on the shelf, customers picked up things and brought them to the counter for purchase, some items available contained minute amounts of restricted “poisons”, prescription drugs were not self serve o π society sent in two persons who made purchase in this fashion o Society sought a conviction under statute s.17 Pharmacy and Poisons Act, requires poisons to be sold under supervision of pharmacist o π claims - offer occurs when item is placed on the shelf, customer accepts when selecting item, therefore binding contract of sale occurs without supervision or involvement of pharmacist o π lost in lower courts & appealed • Held: o For defendant o Placing items on shelf is only an invitation to customer to make an offer o Rather, by placing goods into basket, it was the customer that made the offer to buy the goods o This offer could be either accepted or rejected by the pharmacist at the cash desk o Moment of the completion of contract was at the cash desk, in the presence of the supervising pharmacist  there was no violation of the Act Dickinson v. Dodds • Case is supposed to be about notice of revocation of offer • Resolved on notice of revocation - can’t accept an offer you know is dead • Could also be resolved on lack of consideration - nudum pactum = bare promise, a bare promise is one unsupported by consideration • Another point: case is in the courts of chancery, heard by Vice Chancellor Bacon - because plaintiff is asking for equitable remedies o Equity – a set of principles that evolved over time to supercede the common law when the strict application of common law yielded a result considered to be unjust o This expanded to include equitable remedies such as specific performance, injunction, property held in trust etc. • At the time of this case, there were not only two sets of law principles, they were administered by two separate court systems: common law courts, and courts of chancery • And another thing: twist in case: although a promise is made in writing, it appears not to be binding • Facts: o Dodds delivered an offer to sell a house and land to Dickinson on Wednesday, stating that the offer was to stay open until 9am on Friday o Dickenson apparently decided to accept the offer on Thursday, but said nothing to Dodds because he thought he had until Friday morning o However, he was informed that Dodds had sold property to someone else on Thursday evening and tried to reach Dodds, leaving a letter with Dodds' mother-in-law where he was staying o An agent of Dickinson found Dodds on Friday morning at around 7am, but was informed that the property had already been sold o Dickinson brought an action of specific performance o He was successful at trial, which Dodds appealed • Held o Agree that the letter was merely an offer and nothing more o When offer has been made, offeror is as free to revoke it as the offeree is to accept or reject it o Dickinson argued that the only way the offeror can revoke the offer is by explicit communication to the offeree, but this is rejected by the court o It is clear in law that an offer does not amount to an agreement & can be withdrawn at any point o Though it was said that offer was to remain open until Friday, this was not binding on Dodds o Must be "meeting of the minds" at time contract is formed, & this obviously could not occur here (as Dodds had already agreed to sell the property to a third party), so there could be no contract o Explicit acceptance of the contract occurred Thursday, at 7:30 P.M o On Appeal  Offer had been revoked by sale to third party  Promise to keep offer open was a gratuitous promise, a “nudum pactum”, no consideration for that promise  π knew at the time of the acceptance that the defendant had changed his mind, parties are not in consensus ad idem, etc.  Was trying to get specific perfor
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