Case study on Bill and Massive Freak

  • Category:
    Business
  • Document type:
    Essay
  • Level:
    High School
  • Page:
    3
  • Words:
    1546

6CASE STUDY ON BILL AND MASSIVE FREAK

Case study on Bill and Massive Freak

Central legal issue

Bill wishes to know whether he has a valid and legally binding contract with Massive Freak and whether he can sue them for a breach of contract. In order to advise Bill, it would be essential to determine if there is indeed a contract between Bill and Massive Freak. Based on the facts of the case, the central legal issue is whether a contract exists between Bill and Massive Freak, and whether Massive Freak breached the contract.

Laws and Application

.1A contract refers to an agreement that legally binds the parties. A party to the contract would be bound as he has agreed to be bound by the terms of the contract. At the common law, for a valid contract to exist between Bill and Massive Freak, it must be showed that there had been an offer. Additionally, there has to be an acceptance of the offer. At the same time, there has to be intention from the contracting parties to establish legal relations and consideration. Therefore, before concluding that there is a contract that gives rise to enforceable obligations, an existence of a binding agreement between the contracting parties has to be established

Existence of an offer or invitation to treat

the Court of Appeal held that exhibiting goods in a shop window is considered an invitation to treat instead of an “offer to sell.” Based on the facts of the case study, it is clear that the advertisement was an offer to sell rather than an invitation to treat. In spite of the limited stock, the advertiser reasonably intended to be bound to sell to all consumers who would accept his offer. In the case law, certain drugs that had to be sold strictly under the oversight of a registered pharmacist were exhibited on shelves of a self-service shop. However, the Pharmaceutical Society of Great Britain later sued the self-service shop for permitting customers to purchase the drugs without the help of supervisors. However, the Court of Appeal held that there was no case, as once the customers had selected the drugs, they had made an offer to purchase them by taking them to the cashier’s desk, and that a registered pharmacist who could supervise was available in the shop. , 2Pharmaceutical Society v Boots [1953]In a typical case of an invitation to treat, the advertiser does not make an offer to show an intention to be bound by the contract. For instance, in the case law of

it can be deduced that Massive Freak’s advertisement is an offer rather than an invitation to treat, as Massive Freak made an offer to the public. ,4Carlill v Carbolic Smoke Ball Co [1893] the manufacturer of a health product called DD advertised in the newspaper, making a promise to make a payment of £100 to buyers who contracted flu once they had bought one of their smoke balls and used it as directed. It had also promised to deposit £1000 in the bank identified in the advert to show their commitment to the matter. P purchased a smoke ball and utilised it as the manufacturer had directed. Still, he ended up catching the flu and, subsequently, sued the company for £100 as had been pledged. The Court of Appeal held that the advertisement was indeed an offer and that the words in the advertisement had obviously indicated an intention for the manufacturer to be bound to any buyer who accepted the offer. Based on the ruling of the ,3Carlill v Carbolic Smoke Ball Co [1893]Conversely, the facts presented in the case present case scenario indicate that there was an offer. An offer comes about when one party clarifies, by actions or words that he is willing to be bound once the other party accepts the offer. Therefore, an offer is dissimilar to an invitation to treat. For instance, in the case law of

Massive Freak Co’s infomercial made some statements expressing that it would guarantee any consumer who drank Massive Freak based on the directions on the packaging thrice a day in replacement of meals for two weeks would witness an increase in body weight by 20% . The infomercial further proclaimed the Massive Freak Co would pay $5,000 to any buyer who took the Massive Freak Challenge and did not gain the 20% increase in body weight after the two-week period had elapsed.

However, Massive Freak Co withdrew the offer. Still, they are still bound by the offer as Bill had already accepted it. Indeed, as held in the case law of Routledge –v- Grant [1828]5, the offer can only be withdrawn at any instance before it is accepted by the offeree. Hence, despite the fact that Massive Freak Co withdrew the offer, they would still be bound by it. Additionally, in the case law of Errington –v- Errington & Woods [1952]6, the court held that an offer could not be withdrawn at the time the offeree performs it.

Existence of an acceptance

For a contract to be legally enforceable, there has to be an acceptance on the part of the offeree. As illustrated in the case law of Biggs v. Boyd Gibbins [1971]7, when the seller makes an offer and a buyer buy the product that the seller agrees on, there is an offer. In the case study, Bill has ordered Massive Freak drinks, for the introductory offer of $299 for 14 days’ supply, which was delivered to his house on 1 June 2016. By buying the drink, he showed he had accepted the offer.

Without a doubt, therefore, there was an act of acceptance on Bill’s part. Additionally, other important elements of a contract seem to all have been applied, including the terms of the offer, as Bill had consumed Massive Freak Drink consistent with the directions. However, he did not gain 20 percent of the body weight after 14 days. Indeed, as shown in the case law of Williams v Roffey Bros & Nicholls (Contractors) Ltd8, an acceptance comprises the ultimate final and unconditional expression of consent to the terms of an offer. Additionally, it is clear that the element of consideration has been fulfilled. In the case study, Bill had offered money in exchange for the Massive Freak Co product. As a result, something of value was offered in exchange for something of value from another part9.

Existence of an intention to create legal relations

Additionally, as was held in the case law of Balfour v Balfour10, an intention to create legal relations must also exist. In the case law, it was determined that the parties to an agreement need to show an intention of ensuring that their agreement has legal consequences. As the transaction between Bill and Massive Freak Co is commercial in nature, an intention to create legal relations is assumed to have occurred. In the case law of Balfour v Balfour11, the court determined that contracts that relate to business relationships are automatically enforceable by the law.

Conclusion

Bill should, therefore, be advised that the contract is legally binding and, therefore, is an enforceable contract. In which case, he can sue Massive Freak Co for breach of contract terms by failing to pay him $5,000 as the term of the contract indicated. All the elements of that make up a legally binding contract exist. For instance, the advertisement was an offer to sell rather than an invitation to treat. In spite of the limited stock, the advertiser reasonably intended to be bound to sell to all consumers who would accept his offer. Without a doubt, therefore, there was an act of acceptance of the offer on Bill’s part. Additionally, as the transaction between Bill and Massive Freak Co is commercial in nature, an intention to create legal relations is assumed to have occurred.

References

Balfour v Balfour [1919] 2 KB 571

Bigg v Boyd Gibbons Ltd [1971] 2 All ER 183

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, CA

MacMillan, C. & Stone, R. (2012). Elements of the law of contract. London: University of London International Programmes

Pharmaceutical Society v Boots [1953] 1 All ER 482, CA

Ricks, V 2001, «Assent Is Not an Element of Contract Formation,» Kansas Law Review, Vol. 61, pp591-653

Routledge v Grant (1828) 4 Bing 653

Sweeney, B,. O’Reilley, J. & Coleman, A. (2007). Law in Commerce. 4edn. Durban: LexisNexis Butterworths

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1

1 MacMillan, C. & Stone, R. (2012). Elements of the law of contract. London: University of London International Programmes

2
Pharmaceutical Society v Boots [1953] 1 All ER 482, CA,

3
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, CA

4
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, CA

5
Routledge v Grant (1828) 4 Bing 653

6
Errington v Errington Woods [1952] 1 KB 290

7
Bigg v Boyd Gibbons Ltd [1971] 2 All ER 183

8
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1

9 Ricks, V 2001, «Assent Is Not an Element of Contract Formation,» Kansas Law Review, Vol. 61, pp591-653

10
Balfour v Balfour [1919] 2 KB 571

11
Balfour v Balfour [1919] 2 KB 571