Module-1 CASE STUDY

Margaret owned an antique store that specialized in rare porcelain dolls.

When she opened the business in 1989, it was at a shop in an eastern suburb of Melbourne. In 1999 she started to advertise on the Internet and by 2006 the business had grown to the point where she needed help to keep the business going. After a family discussion one night at the kitchen table in July 2006, it was agreed that Margaret would probably keep the business going for another couple of years and then retire. Emily, her youngest daughter and aged 16, would work in the shop as long as was needed and in return, she would receive any unsold dolls. When Margaret retired at the end of 2009, she decided that she would give the unsold stock to charity and they could auction it and keep the proceeds.Advise Emily.

Answer -

Emily cannot get the action and decision taken by Margaret reversed and cannot ask her to give her the unsold porcelain dolls instead of giving them to charity for auction as when the family discussion took place wherein it was decided that Margaret would handle the family business for few more years and then retire and after her retirement Emily, her youngest daughter which was aged 16 years can work in the shop and in lieu of her work she would get all the unsold dolls, at that time Emily lacked capacity. The Contract Act states that to enter into an enforceable agreement the parties should have the capacity and an agreement with a minor (person below 18 years of age) is a voidable agreement and cannot be enforced in the court of law. In the matter of  Nash v Inman (1908) 2 KB 1 it was held that a minor lacks the capacity to enter into a contract but only in cases where the person has supplied for the necessities of the minor then he can claim back the money he spent as the contract in such cases is enforceable.(Lambris,2011) In these matters of necessaries as well the claim made by the supplier of necessities is not contractual but an obligation on the minor to pay for the satisfaction of needs. Keeping in view the above it can be advised to Emily that there is no contract between her and her mother as she lacked capacity at the time when family discussion took place.

Module-1 CASE STUDY

Richard, an impoverished university student, and his millionaire father enter into an arrangement where Richard agrees that he will keep the front- and backyards of the family property mowed, and he will ‘do a bit’ to keep the gardens looking tidy. In return, his father agrees to pay him a weekly allowance of $200. His father had previously used agarden contractor to do the job and paid him $350. They live on a one-hectare property, and the mowing alone takes half a day a week. After four weeks, Richard’s father tells him that he can’t afford to pay $200 a week. He says that Richard should be doing the work for nothing, as it is the responsibility of the whole family to look after the property; besides, he says, Richard is getting free board and lodging. Advise Richard.Answer

It is a legal necessity that to enter into an enforceable agreement it is required that the parties to the contract have an intention to create a legal relationship. In commercial matters intention to create a legal relationship is presumed and anything against it need to be proved whereas in matters of personal relations like husband and wife, father and son it is presumed that there was no intention to create the legal relationship and anything against it needs to be proved in the court of law. In the matter of Balfour v Balfour (1919) 2 KB 571 the husband did not take his wife with him to Sri Lanka because of her medical condition but made a promise that he will send her £30 per month for her maintenance in England till the time he joins her back there. Instead of this promise the husband failed to make the payment to her and she brought an action against him. It was held by the court of law that the promise was between husband and wife and it is presumed that there was no intention to create the legal relationship. The principle of this case is applicable to the present situation in our hands as the agreement between Richard and his father fails to satisfy the criteria of intention to create the legal relationship. It can be advised to Richard that he cannot claim the money for mowing the land around his house as there was no intention to create the legal relationship and if he brings an action against his father it will fail in the court of law as there is o enforceable contract.(Latimer,2012)

Module-1 CASE STUDY

Jenny received a circular from Beauty and the Beast Hair Salon advertising massages and manicures for $10. Realising that this was an exceptionally good deal, but not surprised because she knew that they had only just opened and were running a number of good opening specials, she rang and made a booking. When Jenny arrived at the salon she was told that there had been a mistake on the circular and it should have said $100. The manager of the salon explained that this was still a good price because normally a massage and manicure would have cost $150. Jenny was furious, as it had taken her 30 minutes to get to the shop by car and if she had known it would cost $100, she would never have made the booking. Advise Jenny. Would your advice have been any different if Jenny had the massage and manicure before being told that the cost was $100? Would she have to pay the full price?Answer

When a person gives some information about his products in the form of a catalogue or a circular and invites others to make offers to buy the product then it is considered as an invitation to treat. In such cases the buyer is making an offer to buy and upon the acceptance of such offer by the seller that an enforceable agreement can arise between the parties. In the matter of Harris v Nickerson (1873) L.R. 8 Q.B. 286 there was a sae advertisement by the defendant through auction. The plaintiff saw the advertisement and reached to the place of auction. He came to know after reaching the auction site that the auction has been cancelled and thus brought an action against the defendant. It was held by the court of law that the advertisement notice was just an invitation to treat hence the plaintiff cannot claim his travel expenses from the plaintiff. The circular of Beauty and Beast Hair Salon is an invitation to treat on which Jenney acted and made a booking. She came to know the real price upon reaching the salon and thus had an option to reject the offer made by her to avail their services. She needs to pay $ 100 if she gets the massage and manicure done by the salon. The situation would have been different if she would have got the massage and manicure done without knowing the real price as in that case the offer by her was on the circular price and had been accepted by the salon thus giving rise to a contract

between the two of them. In the second scenario she can pay just $10 as the price quoted in circular.

Module-1 CASE STUDY

Bruce, while he was so drunk that he didn’t know what he was doing, bid successfully at an auction for the purchase of a house. It was clear to the auctioneer that Bruce didn’t know what he was doing. However, after Bruce sobered up he confirmed the contract with the auctioneer. He then subsequently refused to complete the contract. Is Bruce be bound your assignment

Answer –

When a person is intoxicated and is not a position to understand the terms of the contract and the other party to the contract is aware of his situation then the contract made by such an intoxicated person is voidable. But later when the person is in a position to understand the terms and the implications of the contract and accepts it then he is bound by such a contract. In the matter of Blomley v Ryan (1954) 99 CLR 362 there was a contract between Ryan and Blomley which was entered by Ryan when he was 78 years old and was under the influence of alcohol. Ryan later refused to oblige the terms of the contract and thus Blomley brought an action against him. The court held that contracts entered into in an intoxicated condition and thus not in a condition to understand the terms of the contract and hence the contract cannot be enforced.( www.austlii.edu.au/au/cases/,2012) Bruce was drunk when he was bidding for the purchase of the house and the auctioneer was aware of his drunken condition. The agreement till that time has not become enforceable but upon his becoming sober he confirmed the contract and after this confirmation the contract becomes alive and is enforceable. It can be concluded that Bruce is bound by the agreement.

 

 

 

 

 Module-1

Case based on Quasi contracts

• A minor “Naughty” who had enough assets to fulfill his obligations bought eatables to consume as lunch from a mess and refused to pay on the basis of contention that being a minor he was not bound towards any liability , mess owner is finding himself cheated and is asking you for an advice in this case, explain his rights to him.

Solution

• Naughty is indebted towards the payment for the eatables he had consumed under the light of Indian contract act 1872. more precisely the case is covered under the provision 68 of the said act . There exist the Quasi contract between the mess owner and Naughty , as Naughty has consumed the eatables in the nature of necessity (i.e food).

 

 

 

 

 

 

 

 

 

 

   MODULE-1

CASE STUDY

CONSIDERATION.

Vishwanath agrees to print a book for Balu for a consideration. The book contained certain defamatory and derogatory matters against some important person. But Vishwanath never knew about it. After printing a part of the book he discovered that it contained such libelous matter. Can Vishwanath lawfully refuse to print the remaining part of the book and claim for the work done by him?

Facts of the case:

1)Vishwanath agrees to print a book for Balu for a consideration.

2)Vishwanath came to know that the book contained certain defamatory and derogatory matters against some important person.

3) Vishwanath came to know about it after printing a part of the book that it contained certain defamatory and derogatory matters.

Analysis:

The above case is an example of consideration. Vishwanath agrees to print the book for Balu for consideration. He will discover that the book contains certain defamatory and derogatory matters about an important person which may affect hisreputation in general public.

InterpretationThis case has two interpretations,

1. As per the contract Vishwanath can complete the work of printing the book as per the direction of Balu and can claim the amount as per the contractual obligation.

The second interpretation would be,

2. Since the book contains certain defamatory and derogatory matters against some important person it may lead to legal complication and the affected party may take legal recourse by initiating both criminal and civil action for the publication of the book, in such an event Vishwanath will also be liable and answerable for the actions committed by Balu. If the matter to be published in the book is defamatory and derogatory damaging the reputation of important person in general public, then the person who prints the book knowing well that such defamatory and derogatory matters affect the reputation of a person, the person who prints also will be liable for punishment under the criminal law and also liable to pay damages to the affected person for the damage caused along with the person who publishes.In the view of above Vishwanath can lawfully refuse to print the remaining part of the book in order to escape the liability and can claim the amount for the work done by him from Balu lawfully.

Conclusion:

Though Vishwanath agreed to print the book for Balu for the consideration and acontractual obligation cast upon vishwanath to complete the work but the work which is agreed by Vishwanath , if unlawful and opposed to public policy and the law of land does not permit, then the contractual agreement itself is null and void and Vishwanath is at liberty to cancel the contract and claim the amount for the work done.

MODULE-1

CASE STUDY

COERCION

    The exact medication and dosage is uncertain in this case but an assumption will be made regarding both. Mr. Jones, a 70-year-old man, had been to his doctor’s office complaining of dizziness and lightheadedness for several days after taking his new prescription of diltiazem hydrochloride, 180-mg once a day. Mr. Jones told his doctor, Dr. Smith, that his lightheadedness had become so severe that he collapsed hitting his head in the process. After this incident Mr. Jones discontinued taking his new prescription thinking it was responsible for his lightheadedness. Dr. Smith ordered a twelve-lead electrocardiogram (EKG) and diagnosed Mr. Jones as having third-degree atrioventricular (AV) block, a potentially life-threatening bradycardia. Third-degree AV block “is not a stable pacemaker, and episodes of ventricular asystole are common” (American Heart Association, 1994, p. 3-15). Mr. Jones was admitted to the telemetry unit of a metropolitan teaching hospital for monitoring and tests. One day later Tracy, the night shift nurse, received report that Mr. Jones was diagnosed with third-degree AV block. However, Tracy did not recognize Mr. Jones’ cardiac rhythm as being third-degree AV block. A subsequent twelve-lead EKG revealed Mr. Jones as having a right bundle branch block (RBBB), a condition that does not indicate treatment. At that time, Mr. Jones’ heart rate was seventy to eighty beats per minute with an underlying sinus rhythm: not third-degree AV block. Curiously, Tracy asked Mr. Jones why he had been admitted and diagnosed with third-degree AV block; so, Mr. Jones told his story leading up to his doctor’s appointment. Because Mr. Jones was hemodynamically stable, Tracy told Mr. Jones that his heart was working fine other than some minor abnormalities in his heart rhythm. Later, Dr. Brown, the cardiologist on call, sat down with Tracy and explained that Mr. Jones’ third-degree AV block was temporarily induced by his medication. Dr. Brown also said Mr. Jones’ RBBB, although benign in itself, made him extremely susceptible to the medication’s adverse effects. That morning Mr. Jones, feeling well and no longer in third-degree heart block, told his doctor he wanted to go home. On the contrary, Dr. Smith insisted he must stay to have a permanent pace maker inserted in his chest to counter the effects of diltiazem. Upon hearing Dr. Smith’s plans, Mr. Jones refused to have the pacemaker. But Dr. Smith threatened to inform the State License Bureau that Mr. Jones was unfit to drive if he did not agree to have the

pacemaker. Dr. Smith stated that Mr. Jones would be a danger to others if he were to pass out and loose control of his truck due to the diltiazem; he gave no reason why Mr. Jones must continue to take diltiazem. 

    The following night, Mr. Jones explained to Tracy what had happened. Tracy suggested to Mr. Jones that he could retire from work to avoid having a pacemaker but Mr. Jones said that he needed to work to support himself. Then Tracy commented to Mr. Jones, “I really don’t know why you need that medication. Without it your heart rate and your blood pressure are normal. There are risks involved with having a pacemaker put in. You don’t have to get it if you don’t want to.” Mr. Jones agreed but said he did not want to loose his truck driver’s license. The following day Mr. Jones signed a consent for the procedure and had the permanent pace maker inserted into his chest. Later, Tracy learned that Dr. Smith was upset that she openly questioned Mr. Jones’ need for a pacemaker.

    One identifiable dilemma in this situation is the violation of Mr. Jones’ right to autonomy. Although Mr. Jones ultimately yielded to his doctors’ treatment, Mr. Jones did not truly give his informed consent into taking the medication, diltiazem, or in having a pacemaker inserted into his body. Indeed, Mr. Jones was not able to make a voluntary decision concerning his treatment because he was threatened with having his means of support taken away from him if he did not agree to treatment. Authors Appelbaum, Lidz, and Meisel (1987) state, “wills are voided if the testator was subjected to undue influence, criminal confessions are voided if coerced, and contracts entered into under duress are voidable. So to with consent to medical care” (p. 61). Dr. Smith could have persuaded Mr. Jones into agreeing to treatment by offering him a rational argument. Instead, Mr. Jones was coerced into treatment by being presented with a scenario that he would find irresistible. “Coercion and manipulation invalidate consent because they interfere with free choices” (Lo, 1995, p. 28). As a result, Mr. Jones’ autonomy had been compromised. “In order to be able to choose freely, one must not be under too much pressure from the outside. Law has two terms that characterize such pressures: coercion and undue influence. The presence of either invalidates the legal character of any effort at producing autonomous expressions, including the granting of consent” (Appelbaum et al., 1987, p. 24). Furthermore, Mr. Jones was not presented with a reasonable explanation to make an informed decision about his treatment: “The duty of disclosure, or the duty to inform, is the truly distinguishing and innovative aspect of the informed consent doctrine” (Appelbaum et al., 1987, p. 57).

    One fact that may shed light onto this case is the reason Mr. Jones was taking

diltiazem, especially such a large dose despite the fact his blood pressure and heart rate were within normal limits in the absence of this medication. Diltiazem is a calcium channel blocker that is typically used to treat hypertension and cardiac arrhythmias (Gerald & O’Bannon, 1988, p. 347). Because diltiazem caused a potentially life-threatening effect on Mr. Jones, it is said to have a poor therapeutic index in this case. “The therapeutic index provides a quantitative measure of the relative safety of a given medication. It is the ratio of the dose that produces toxic effects to the dose required to produce the intended clinical response” (Gerald & O’Bannon, 1988, p. 31). In order to legitimately give diltiazem, the “ratio must be greater than 1 if the drug is to possess any clinical value” (Gerald & O’Bannon, 1988, p. 31). If diltiazem causes a potentially life-threatening effect on Mr. Jones then we must assume that this drug has been given to treat an equally life-threatening condition. In this case, 180-mg of diltiazem produced a potentially life-threatening arrhythmia while the same 180-mg of diltiazem was prescribed to treat an unknown condition. The therapeutic index appears to be one-to-one which indicates it is not appropriate to give. In fact, any prescribed medication given to Mr. Jones producing third-degree (AV) block would be considered inappropriate. Above all other ethical guidelines in medicine a physician has an obligation to do no harm: “If physicians cannot benefit patients, they at least should not harm them or make the situation worse. When benefits and burdens are evenly balanced, physicians should err on the side of not intervening” (Lo, 1995, p. 37). Another question is why did Mr. Jones’ doctor choose not to inform his patient of any alternatives except to have a pacemaker and remain on diltiazem. Dr. Smith has chosen to exercise medical paternalism which will be discussed later.

    According to the latest draft of the American Nurses Association’s Code of Ethics for Nurses, Tracy is morally bound to ensure her patients' autonomy:

Patients have the moral and legal right to determine what will be done with their own person; to be given accurate information in a manner that they can understand and all the information necessary to make an informed judgment; to be assisted with weighing the benefits, burdens and available options in their treatment, including the choice of no treatment; to accept, refuse or terminate treatment without undue influence, duress, coercion or penalty; and to be given necessary support throughout the decision-making and treatment process (American Nurses Association [ANA], 2000, p. 6).

    Dr. Smith took every right mentioned above away from Mr. Jones and Tracy had a professional obligation to correct this situation. Mr. Jones chose not to be treated; that is his right. As a nurse, Tracy has a primary moral obligation to serve her

patients' interests; not the doctors' or the hospital's but her patients’ interests. "The nurse's primary commitment is to the patient, whether an individual, family, group or community" (ANA, 2000, p. 9).

    Here are Tracy’s personal values in this dilemma. Tracy has strong feelings about interfering with someone’s autonomy, including her own. She finds the doctor's attitude offensive and demeaning in this matter. The doctor did not approach Mr. Jones as his personal advocate. Instead, the doctor dictated what treatment Mr. Jones was to accept along with threatening Mr. Jones into compliance. Also, Dr. Smith was upset with Tracy’s interference in Mr. Jones’ willingness to comply with treatment. Tracy has witnessed numerous procedures performed on patients at her teaching hospital just for the sake of learning. Tracy has also seen several complications of having a pacemaker and feels there should be some legitimate reason for having one. Tracy’s personal values move her towards opposing Dr. Smith’s plans for a pacemaker in this case.

    The moral position of Dr. Smith is in question as he has chosen to exercise medical paternalism in this case. Over all other persons, including Mr. Jones, Dr. Smith believes he knows what is best for Mr. Jones. Also, it is clear Dr. Smith feels he is protecting society by imposing medical treatment on Mr. Jones. There are several reasons why the practice of medical paternalism is looked down upon in medicine. One reason is “critics of medical paternalism point out that value judgments are unavoidable in clinical decisions and that physicians have no expertise to make them” (Lo, 1995, p. 39). Mr. Jones should be able to decide what treatment is right for him because he must live with the consequences of accepting or declining treatment. It is his life, not the doctors’. Another reason is that practicing medical paternalism encourages a patient to relinquish the duty of caring for himself. Author Bernard Lo (1995) states, “patients who sense that they have no decision-making power will not seek an active role” (p. 40). Dr. Smith has now created an environment where Mr. Jones has become a passive participant in order to avoid further conflict and maintain this one-sided relationship. “In Contrast, if patients are empowered to participate in their care, they generally become more active in asking questions, seeking information, and taking responsibility for difficult choices” (Lo, 1995, p. 40). Let us assume Dr. Smith is correct: Mr. Jones needs to take diltiazem and have a pacemaker. Despite this fact, Dr. Smith was morally and legally wrong in the manner he approached Mr. Jones. Take for example a similar scenario, an employer has threatened his employee to sign a waiver or be fired. The employee is frightened and worried about losing her job so signing the waiver becomes “the only reasonable thing to do” (Fingarette, 1997). That was an example given by philosopher Herbert Fingarette to describe one of

the many legal interpretations of coercion. Coercion is not acceptable in law nor is it acceptable in medicine.

    Here is Tracy’s moral position. Just as deontologists Immanuel Kant believed “that we should never impose anything on a person against her [or his] will,” Tracy believes her patients should not be forced into treatment (Graber, 1998, p. 521). Tracy has identified that Dr. Smith has coerced Mr. Jones into accepting treatment. "Such coercion would undermine patients' abilities to pursue rational courses of action that are consistent with their ethical systems" (Appelbaum et al., 1987, p. 26). Second, Tracy suspects that Mr. Jones was not presented with all possible alternatives to taking diltiazem and having a pacemaker inserted in his body. "If the physician, who is aware of the medical situation, fails to share such facts with the patient, who presumably is not, the latter will be unable to make a reasoned choice and therefore unable to act autonomously" (Appelbaum et al., 1987, p. 27). Although Tracy was opposed to Mr. Jones having a pacemaker and taking diltiazem, all she did was state this fact to Mr. Jones when he should have taken a proactive role as her patient’s advocate.

    Whatever moral position Mr. Jones held in this case was suppressed by Dr. Smith’s coercion and medical paternalism. We can assume that Mr. Jones is a rational and reasonable being and by his initial refusal of treatment we can see that he was acting autonomously.

    The following value conflicts existed in this case. First, Dr. Smith felt he knew what was best for Mr. Jones to the point that coercion was used. Dr. Smith also felt Mr. Jones, without a pacemaker, was a danger to others on the road. Second, Mr. Jones did not know why he had to take diltiazem or have a pacemaker and certainly did not want either but he did not want to loose his truck drivers’ license. Lastly, Tracy did not see the need for Mr. Jones having a pacemaker or the need of him taking diltiazem. In order to have resolved these conflicts, Dr. Smith should have refrained from practicing medical paternalism and using coercion and instead presented Mr. Jones with all the information necessary to make a rational informed decision.

    Mr. Jones, having possession of all his cognitive abilities, should be free to decide what choices to select concerning his health. Dr. Smith may have advocated that Mr. Jones not drive and may even see fit to report him to the State but was wrong in using this threat to compromise his ability to freely choose treatment. "Advocacy, however, must not be permitted to turn into coercion. Unfortunately, the line between persuasion and coercion is exceedingly fine, and physicians must

be extremely sensitive to overstepping it" (Appelbaum et al., 1987, p. 199).

    Two possible outcomes that might have occurred in this case could have been taken to resolve this dilemma. One, as suggested earlier, Dr. Smith could have decided to give Mr. Jones all the information necessary to make an informed decision. Dr. Smith may have even persuaded Mr. Jones by presenting a reasonable argument for having a pacemaker ultimately allowing Mr. Jones to decide what action to take. Second, Dr. Smith could have consulted an ethics committee for advice on how to handle this situation: “Clinical ethics committees…can remedy such problems, by providing multidisciplinary consultation (but not, they are clear, ‘prescriptions’ for action) concerning clinical ethics issues, whether case-related or more general and in doing so benefiting patients, families, and health care staff…” (Gillon, 1997, p. 203). Dr. Smith, Mr. Jones, and Tracy could have all been present at the committee and shared their point of views hopefully coming to a mutual agreement.

    Given a choice on selecting a possible outcome for this case, Tracy would choose to have Dr. Smith present Mr. Jones with all the information to make an informed decision. Although consulting an ethics committee would have been a reasonable choice, Tracy is confident that Mr. Jones would have made a rational decision had he been properly informed and not coerced. Regardless of what decision Mr. Jones would have made, Dr. Smith should have respected it. “Patients have the moral and legal right to determine what will be done with their own person” (ANA, 2000, p. 6). Mr. Jones deserves to have his autonomy respected.

    In conclusion, Dr. Smith took the decision making process away from Mr. Jones by threatening to take away his means of support. Under coercion, Mr. Jones submitted to taking diltiazem and having a pacemaker inserted into his body not because he felt this treatment was needed but because he wanted to keep his job. An injustice was made by not providing Mr. Jones the opportunity to make a rational decision concerning his health. Although Dr. Smith may have advocated that Mr. Jones have a pacemaker, he crossed moral and legal boundaries by imposing the device with a threat. Consequently, Mr. Jones’ autonomy and legal rights were violated.

 

Analysis:A case study of a 70-year-old patient finds his doctor responsible in coercing him into having a pacemaker inserted in his body. The doctor threatens to have the patient’s truck driver license revoked if he refuses treatment. Although the patient does not want the pacemaker put in his body, he does not want to lose his truck driver job which is how he supports himself. Ultimately, the patient submits to his doctor’s threats and has the pacemaker inserted into his body. The case is examined finding legal and moral faults with the doctor in his relationship with his patient. Interpretation

Victim: Mr. Jones Culprit: Dr Smith

Conclusion:

Dr. Smith took the decision making process away from Mr. Jones by threatening to take away his means of support. Under coercion, Mr. Jones submitted in having a pacemaker inserted into his body not because he felt this treatment was needed but because he wanted to keep his job. An injustice was made by not providing Mr. Jones the opportunity to make a rational decision concerning his health. Although Dr. Smith may have advocated that Mr. Jones have a pacemaker, he crossed moral and legal boundaries by imposing the device with a threat. Consequently, Mr. Jones’ autonomy and legal rights were violated

MODULE-1

CASE STUDY

OFFER & ACCEPTANCE

Carlill V Carbolic Smoke Ball: A Case Study

The case of Carlill v Carbolic Smoke Ball is one of the most important cases in English legal history. In essence it defined what it is to create an ‘offer’ in an advertisement, and how a member of the public successfully argued that they had ‘accepted’ the offer and performed under the terms of the advertisement (contract.)

Facts of the CaseThe Carbolic Smoke Ball Company advertised in the Pall Mall Gazette in 1891 that their Carbolic Smoke Ball was a cure for flu, bronchitis, coughs, colds, headaches, hay-fever, whooping cough, laryngitis and sore throats amongst others.

It was so confident of the usefulness of the carbolic smoke ball, and its ability not only to cure but also to prevent someone from getting the ‘flu, that it advertised on the following basis: Anyone who used the carbolic smoke ball in a particular way for a specified period of time, but who still caught influenza afterwards, would be entitled to claim £100 from the company.

The advertisement went on to say that the company had gone so far as to deposit £1000 in the Alliance Bank in the event of any such claims. The plaintiff (who nowadays would be called the ‘claimant’) saw the advertisement and decided to buy one of the carbolic smoke balls. She used it exactly as advised, but still caught influenza. She took the Carbolic Smoke Ball Company to court in order to claim her £100. The court found in her favour, but the defendants appealed.

Conclusion

The Defendant’s Case

On appeal, the defendant’s case was that there was no binding contract between the parties. The defendant company had no means of checking the ball, or of establishing whether the plaintiff had in fact used the ball as directed. They also said that the plaintiff had not provided any consideration, and that merely doing an act in private (i.e. following instructions) would not be enough.

They argued, in the alternative, that if the court found there to be a contract, that contract was no more than a ‘wagering contract’ in which liability was purely determined on one issue – whether the plaintiff caught influenza or not - in which case it would be void, or that if it was an insurance policy that it was ‘bad’ because it relied on whether or not there would be an occurrence of an uncertain event. However, the court did not consider that the ‘wager’ or ‘insurance’ arguments were valid.

The Judgment

The plaintiff argued that the advertisement constituted an offer, which could be accepted by anyone who saw it. The court agreed with the plaintiff and dismissed the defendant’s appeal. The advertisement was a promise to pay any person who took up the offer the sum of £100 if they caught the influenza despite having used the smoke ball as directed. The plaintiff provided the consideration required to form part of the contract in their continued use of the carbolic smoke ball.

Usage Today

The effects of this judgment are still felt today. If you lose a family pet and put up a poster offering a reward for its safe return, you are providing an ‘offer’ which someone may accept, if they find your pet safe and well. Similarly, the police offer rewards to ‘anyone’ who can provide information leading to the arrest and/or conviction of a suspect in a criminal investigation. If a member of the public provides that information, and the police are as a result able to arrest/secure a conviction against the wanted person, the reward money will become payable.