The Law of Contract in South
Africa CASE STUDIES &
ANSWERED QUESTIONS
Case Study 1: Carlill v Carbolic Smoke Ball Co [1893]
Facts: The defendant company advertised that they would pay £100 to anyone who contracted
influenza after using their smoke ball according to the instructions. The plaintiff used the smoke
ball but contracted influenza.
Question: Was there a valid contract between Carlill and the Carbolic Smoke Ball Co?
Answer: Yes, there was a valid contract. The court held that the advertisement constituted an
offer to the world at large, which Carlill accepted by performing the conditions stated in the offer.
The deposit of £1,000 in the bank showed the company's intent to be bound by the contract.
Case Study 2: Pothier v Nerine Trust Co Ltd [2003]
Facts: Pothier entered into a contract with Nerine Trust Co to buy shares. Pothier later claimed
that the contract was invalid due to a mistake regarding the value of the shares.
Question: Can a mistake regarding the value of shares invalidate a contract?
Answer: No, a mistake regarding the value of shares does not typically invalidate a contract.
The court held that for a mistake to invalidate a contract, it must go to the root of the agreement.
In this case, the mistake was not material enough to render the contract void.
Case Study 3: Smith v Hughes (1871)
Facts: Smith was selling oats, and Hughes, thinking they were old oats suitable for horse feed,
agreed to buy them. When he found out they were new oats, he refused to pay.
Question: Does a misunderstanding about the quality of goods void a contract?
Africa CASE STUDIES &
ANSWERED QUESTIONS
Case Study 1: Carlill v Carbolic Smoke Ball Co [1893]
Facts: The defendant company advertised that they would pay £100 to anyone who contracted
influenza after using their smoke ball according to the instructions. The plaintiff used the smoke
ball but contracted influenza.
Question: Was there a valid contract between Carlill and the Carbolic Smoke Ball Co?
Answer: Yes, there was a valid contract. The court held that the advertisement constituted an
offer to the world at large, which Carlill accepted by performing the conditions stated in the offer.
The deposit of £1,000 in the bank showed the company's intent to be bound by the contract.
Case Study 2: Pothier v Nerine Trust Co Ltd [2003]
Facts: Pothier entered into a contract with Nerine Trust Co to buy shares. Pothier later claimed
that the contract was invalid due to a mistake regarding the value of the shares.
Question: Can a mistake regarding the value of shares invalidate a contract?
Answer: No, a mistake regarding the value of shares does not typically invalidate a contract.
The court held that for a mistake to invalidate a contract, it must go to the root of the agreement.
In this case, the mistake was not material enough to render the contract void.
Case Study 3: Smith v Hughes (1871)
Facts: Smith was selling oats, and Hughes, thinking they were old oats suitable for horse feed,
agreed to buy them. When he found out they were new oats, he refused to pay.
Question: Does a misunderstanding about the quality of goods void a contract?
