Australian Commercial Law: IRAC Analysis

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Australian Commercial Law: IRAC Analysis

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Australian Commercial Law: IRAC Analysis

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Write about the Australian Commercial Law for IRAC Analysis.

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Hello! While studying about the Contract Law for this semester, a case by the name of Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 was discussed. This particular case has been referred to under the heading of offer, which is deemed as one of the essential elements in the formation of a contract. In this video, the IRAC analysis of this case has been made, but before that the background of this case has been highlighted.
Background
In the matter of Carlill v Carbolic Smoke Ball Company, the Carbolic Smoke Ball Company was the defendant, which had formed a product by the name of smoke ball (Swarb, 2016). This smoke ball was stated to be the cure for a disease known as influenza, along with for a range of different diseases. Carbolic Smoke Ball Company published an advertisement in the newspaper which claimed that a sum of £100 would be paid to any such individual, who would fall sick with this disease of influenza, even after using the smoke ball manufactured by the company, as per the instructions which were covered in the advertisement (Stone, 2005).
This advertisement was seen by Mrs. Carlill and she purchased one of the smoke balls. She then used the purchased smoke ball for three ties in a day for a period of around two months. After this period, i.e., on January 17th, 1892, she contracted flu. And so, as per the advertisement, she made a claim of £100 from the company. Two of the letters sent by Mrs. Carlill’s husband, who was a solicitor, were ignored by the company (Dosen et al. 2013).
When a third request was made regarding the claim for the earned reward, the company replied that if the smoke ball had been used properly, the same would not have resulted in the individual contracting influenza. However, they agreed to hear the claims made by Carlill, so as to be safeguarded from the fraudulent claims, they agreed to hear her side of the story. And they also required her to use the ball in their office daily, which would be overlooked by the secretary (Marson & Ferris, 2015). A claim was brought forward by the plaintiff in the court of law. She claimed that the advertisement and reliance supported the notion that a contract was formed between her and the company. And so, the company had to pay her the contractual obligation. However, it was argued by the company that there was an absence of a serious contract (Pathak, 2013).

Issue
Whether a contract was formed or not, due to the lack of clarity regarding an offer being made? Whether the offer was made to the entire world, or not?
Rule
A contract depicts the exchange of a promise between the parties, who come together to create legal relations, whereby an activity or task is done by one side, and the other side pays an amount or value of consideration, for the work undertaken. An offer and acceptance, accompanied by consideration, in addition to clarity, intent and capacity have to be present, for the formation of a lawfully binding contract (Gibson & Fraser, 2013).
When a unilateral offer is made, the same can be accepted by any such individual, who came across such an offer. And to attain if the acceptance has actually been given in the matter, the conduct of the so-called accepting party, has to be evaluated. This very performance of the terms of the contract acts as the base of acceptance in cases of unilateral offer. Moreover, as a unilateral offer is made, the same is made to the whole world to accept and so, can be accepted by anyone; instead of a bilateral offer, where the offer has to be accepted by the party to which the offer was made (Blum, 2007).
Application
In this particular case, an offer was made by the company, which could be accepted by anyone in the entire world. The acceptance had to be attained from the conduct of the other party, whereby the individual who purchased the smoke ball and consumed it as per the instructions, would be deemed to have acted on the offer and hence, accepted the same. In this matter, there was no need of communicating the intention of accepting the offer, as the acceptance was deemed through the complete performance of the terms of the offer (E-Law Resources, 2017).
Conclusion
On the basis of this, it can be easily concluded that a contract was formed, due to the presence of a unilateral offer, which was made to the entire world. And the acceptance of the same could be acknowledged from the performance of the terms of the contract. Hence, Carbolic Smoke Ball Company would be liable to pay the promised sum of £100 to Mrs. Carlill.

References
Blum, B. (2007). Contracts: Examples & Explanations (5th ed.). New York: Aspen Publishers.
Dosen, A., Ballantyne, T., Brumpton, M., Gibson, K., Harris, & Lippingwell, S. (2013). Investigating Legal Studies for Queensland. Cambridge: Cambridge University Press.
E-Law Resources. (2017). Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 Court of Appeal. Retrieved from: https://www.e-lawresources.co.uk/Carlill-v-Carbolic-Smoke-Ball-Co.php
Gibson, A., & Fraser, D. (2013). Business Law 2014 (5th ed.). New South Wales: Pearson Australia.
Marson, J., & Ferris, K. (2015). Business Law. Oxford: Oxford University Press.
Pathak, A. (2013). Legal Aspects of Business (5th ed.). New Delhi: McGraw Hill.
Stone, R. (2005). The Modern Law of Contract (6th ed.). London: Psychology Press.
Swarb. (2016). Carlill v Carbolic Smoke Ball Co: CA 7 Dec 1892. Retrieved from: https://swarb.co.uk/carlill-v-carbolic-smoke-ball-co-ca-7-dec-1892/

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