Contract Law | Contract Attorneys | Contract Law Agreement

Contract Law Agreement

•    Contracts are a creation – they are legally enforceable obligations that did not previously exist (prior to the contract) [self-imposed obligations]
•    Through the free exercise of our wills we impose these obligations on ourselves.
o    Hence the derivative idea that if our will isn’t free (ex: intoxication or subversion) we are not bound – this is because it was not, in such situations, an exercise of free wills.
•    The basis of contracts is the freely functioning human will.
•    Issue of Intention:  A contract is the product of two intentions meeting.
o    How do we ascertain what the other party intends?
o    How does the court know?
o    The approach that courts take is to say (implicitly, by rulings) that they take the object approach.  The court does not ask what was intended.
o    Ex:  In Carbolic Smoke Ball, did not call the president of the company to the stand to ask what the intent was.  Rather, when one has to decide what the parties intended, the judge decides based on what the party would seem to have intended, to a reasonable observer.
o    We apply the test of reasonableness p481 – par7
o    We must understand the words in the way that an ordinary, resonable person would. P 442 – bottom of para2.
•    Note that we attribute that intention to the parties.
o    Still a product of the will of the parties.
o    We (the court) just get to say what that will is.
o    A person can end up “intending” what was furthest from their mind at the time of the agreement.
o    Do remember that even though the judge decides what was intended, it is imputed to the parties.
•    Headings (abbreviations):
o    Q.B. – Queen’s Bench
o    C.A. – Court of Appeal
o    L.J. – Lord Justice
o    M.R. – master of the roles (the keeper of the records – as result of adjudicature acts, made CJ of the civil cases.  The LCJ fulfilled the same role for the criminal cases.  Lindly M.R. spoken as, “Lord Lindly, Master of the Roles)

Carlill v. Carbolic Smoke Ball Co.
•    Mrs. Carlill suing, alleging a contract between the two.  Not on the basis of a contract of sale, but on a more elusive contract.
•    “The Law is like Prince Philip.  It’s always a step and a half behind life.”
•    What is there in this ad (and its context) that make it different from other ads (which usually cannot be construed as contracts).
o    An advocate would want to know more than just the words – would also want to know the context – type of newspaper (reputation of publication might colour the reading of the advertisement.  I.e.  A gossip rag versus the British Journal of Medicine).  A better lawyer will make such things relevant to the case.
•    What arguments could be made for the Carbolic Smoke Ball Co.?
o    A reasonable person would understand that no company would intend to put themselves into this situation.  £100 would be an incredible amount of money.
o    If this is the offer, then the offeree is everyone whose eyes fell upon that ad.  Is it reasonable to assume that it offered it to the entire world?
o    Either there is no direct offeree, or there is no offeree
o    Company also argues that there is no acceptance.
o    A pamphlet could be viewed as a literay form.  Literary forms are prone to exagerration and hyperbole.
o    There were no instructions given in regards to claiming of the moneys.  In order to be claimed as an offer, something must be fairly complete.  This is essential information.
o    The word “reward” is not a contractual word.
o    Nudum pactum – naked agreement.  A considerationless agreement.  Non-enforceable [from page 444 – para 9]
o    “…any disease” is extravagant.  Tempered somewhat by “…by taking cold”

For Mrs. Carlill
What makes this ad different from other ads?  What makes it an offer?
•    The £1000 deposited into the account adds a ‘sincerity factor’.  It is a preemptive measure against skepticism, meant to convey confidence and promote sales.
•    The detailed instructions amount to an onerous path of acceptance.  The inference is that if this path is followed, then it constitutes acceptance, which means there must also have been an offer.
•    The Offer is made only to the subset of the world who:  buys the product; uses it while strictly adhering to the product’s directions; still contracts influenza.

When one examines a case, not necessarily looking for “rightness” or “truth”.  When analyzing the cases in the book, must look for the rationale and reasoning.  Must be able to make reasonable arguments based on the words.

•    P444:  One of the company’s arguments that were was no acceptance was that Mrs. Carlill did not send a letter, etc. to notify acceptance
•    The first the company knew about it was when the claim was made for the £100.
•    What of the idea that Acceptance is not Acceptance until communication is effected?
o    The judges say that the offeror is entitled to waive the terms of acceptance.
o    Here they say that Carbolic implicitly waived the terms of acceptance.
o    Say that she did accept at the point where she had completed the path of Acceptance and notified them of her claim.

Acceptance (when not in person): a general discussion
•    Contract law is based on old rules.
•    The paradigm for centuries was a contract of sale.
•    In the mind’s eye of trad. contract law, a contract takes place when people are interacting in person.
•    This became problematic once people began interacting by post.
•    In person, easy to say, “I accept,” or “I do not accept”, or to “hear” the silence (rejection)
•    However, by post, there are often complications along the way.  The letter of Offer could get lost on the way, or it may have arrived and been rejected by silence, or that the Offeree did write back, but it got lost on the way.
•    The Offeror, dealing at a distance, after having consigned a letter to the post and received no response, may be perplexed.  Likewise, the Offeree may be in a similar situation.
•    The silence on either end is perplexing.
•    The law has developed a rule that some say help, and some say hinder:
o    The Postal Rule, or The Postal Rule of Acceptance.
o    The ordinary rule of Acceptance is that it is not Acceptance until it is communicated (unless this has been waived by the Offeror)
o    Inter praesentes:  Present parties.
o    Communicated means communicated successfully!
o     The Postal Rule of Acceptance, where it applies, has Acceptance occur as soon as the letter of Acceptance is posted.
o    This applies even if the letter of Acceptance is miscarried enroute.
o    A clause in a contract can contravene this successfully.  The Offeror is the master of the Offer.  Ex:  “We don’t have an offer until your Acceptance reaches me.”
o    The Postal Rule of Acceptance puts the burden of interpreting silence, and therefore the risk of silence, on the Offeror.

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