Exam (elaborations)
Exam (elaborations) LA1040
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contract law Zone A 2003 question and answer (full) example.
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ZA2003Q1Does Alexander ( A ) have a contract with Beatrice (B), Charles (C), David (D) &
Ethel (E)?
Is the advertisement an offer in a unilateral contract or an invitation to treat? Is the
character of the advertisement bilateral in nature or unilateral? Is Alexander hoping
for further negotiation or is firm on his offer of reward for the safe return of the rats.
Explain offer in a unilateral contract - finding the rats (an act) for a reward (promise).
To determine this, consider if the potential offerees have to engage in a bilateral
negotiation with the offeror before acceptance – Patridge v Crittenden. On the facts
(OTF) the advertisement is more unilateral in nature. This is because there is a
promise of a reward for finding the rat (act). There is no need for the offeree to
engage in any negotiation. If the offerees fulfill the act, that is finding and returning
the rat, it will constitute acceptance. - Carlill v Carbolic Smoke Ball / Bowerman v
ABTA .
Is the offer valid? Yes –Terms are clear; find and return the rat– Scammel v Ousten.
This means that the offerees know what acceptance will constitute. When rat is
returned, the offeree will be paid the reward.
Is the offer capable of acceptance?
Offer is communicated. Readers of the advertisement are deemed to have known
about the advertisement. – contrary to R v Clarke or Gibbons v Proctor.
Consider if Alex will reward anyone if the carcass of the rat is returned instead.
OTF terms are not clear if the rats are to be found dead or alive. However return to
the objective or motive of advertising. A wants the rats so that all 4 rats can continue
to perform. Therefore Alex would want the rats alive
*Note – the above paragraph may not be an obvious point of discussion but it is a relevant
consideration. In this question it is implied that the rats are found alive.
Consider the relationship between the parties.
Does A have a contract with B?
B finds rat but rat escapes before B can return it. Acceptance must mirror the offer.
If acceptance has commenced but yet to be competed, there is no binding contract –
Daulia v Four Mill Bank Nominees. OTF acceptance is not complete. This is
because the rat is not returned by B to A. No contract between A & B and therefore
there is no contractual obligation. A need not pay B.
Does A have a contract with C?
OTF C spends money to recover the rats. C also finds rat and keeps it with him. C
does not return the rat immediately to A. A meanwhile revokes the offer by placing
leaflets about the city cancelling the offer of the reward.
General Rule: Revocation is only valid if there is no acceptance – Byrne v Van
Tienhoven/Offord v Davies. However consideration of revocation of offer in unilateral
contract is different. OTF acceptance has already commenced. If so A cannot
revoke the offer – Errington v Errington. For purposes of unilateral contracts there is
no binding contract before acceptance is complete. It is also important to consider if
A is deliberately preventing C from getting the reward. If A has a legitimate excuse he
can legally avoid paying C
Please take note that this is merely a guide to the question.
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