COMMERCIAL a reward, considerations, and instructions to be


Name of Course: Bachelor of Business in Economics and

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Name of Institution: Murdoch University Australia

Name of Student: Dinnie Dzulqarnaen Bin Johari

Name of Lecturer: Daniel Theyagu



Analysis (40%)


Research (30%)


Organisation (15%)


Presentation (15%)



Class Assignment for Business Law


1a) Leila has advertised a missing
locket in a local newspaper. Julie who has read the advertisement and found the
locket returned to Leila. Leila refuses to reward Julie stating that she should
have called before returning the locket. The legal issues in this question are
whether Julie is entitled to the reward after returning the locket without
calling first.


Most advertisements are called
Invitation to treat (ITT) (Columbia Law Review,1925) this is where one party invites another to make an offer, but ITT is
not an offer. An advertisement becomes an offer when it has a reward,
considerations, and instructions to be met before getting rewarded (Lindsay E ,2000). The newspaper advertisement has to be clear and advertised to the


Leila did not put up a simple
advertisement like the ones we see offering goods for sale but made a
Unilateral offer through the newspaper advertisement (Ibid) Her advertisement
is not a bilateral offer as it was made public and not a specific group of
people. Unilateral offer is an offer made public to anyone who has read or seen
the advertisement.  A Unilateral offer is
seen within the legal system (Corbin, 1917) and therefore Leila obligations with other parties who may try to
accept the offer of finding the locket.

Therefore, the offer she has made
on the newspaper is Unilateral.


This makes Leila the offeror and
the other party accepting it by performing the act of finding the lost gold
chain and locket and following the terms stated, making them the offeree.


In the case of Carlill v Carbolic
Smoke Ball Co 1893 1 QB 256, Carbolic Smoke Ball company made a newspaper advertisement about
rewarding of £100 to anyone who gets the flu after having used the ball
according to the printed directions supplied. The company also stated that a
deposit of £1000 was made to Alliance Bank, showing that they were serious.


Mrs. Carlill caught the flu after
using the balls as instructed. She made her claim to which the company tried to
challenge that the offer was not serious. In court, it was held that Carbolic
Smoke Ball company was bound by contract to pay Mrs. Carlill £100 as the
company had made a unilateral offer through the advertisement.


From that example, we see that
Leila will have to pay the reward of $50 to any person meeting the actionable
terms of her offer.


Her offer was simple and
understood by all that by finding her lost locket is an intention of accepting
the offer and returning to her fulfill the offer. Unlike the case of Harvey v
Facey 1893 UKPC 1, Harvey sent a telegram to Face asking if he would sell a
Bumper hall pen and the lowest price for it. Facey replied that the lowest
would be £900. Harvey replied agreeing at the cost. It was held that there was
no contract made between the parties involved. Facey did not answer the
questions with an acceptance of selling the pen but only stating the price.
There was no intention by Facey for it to be an offer of £900.


Termination of an offer can also
happen through a valid revocation of the offer by the offeror (Contract Law,


After Julie had found the locket,
she went to collect her reward at 1 Titanic Drive, as stated in the
advertisement.  Leila refuses to reward
Julie. Leila told Julie that she should have called first before returning the
locket. Leila’s retraction is invalid because the terms were met, to find the
locket and return it to the owner.


In Dickinson v Dodds (1876) 2 Ch D
463, the defendant offered to sell his house and promised to keep the offer
until Friday. On Thursday, the defendant accepted an offer from a third party.
He asked a friend to inform the claimant that the offer was withdrawn. From
hearing the news, claimant went to defendant house on Friday morning asking to
accept his offer instead. It was held that the offer was withdrawn. There was
no contract between parties and therefore no obligation for the defendant to
keep the offer open as there was no consideration or promise. The offeror was
free to withdraw the offer any time until there is a deposit or an acceptance
of the offer made.


For Leila to withdraw the offer,
the law states that the withdrawal must be made so using the same medium as the
advertisement (Hussaini, D. n.d.)
and the public or Julie in this case, must be
presented stating this withdraw before the deed was done.

Julie has already found the locket
and even return it to the owner before Leila telling her to call beforehand.


We can argue that in the
advertisement, there were no instructions to return the locket to 1 Titanic
Drive neither there were instructions to call when the item is found. Leila’s
advertisement only states her information to be contacted. We can also argue
that the advertisement was not clear, but it is understood that and
advertisement stating lost and found item with a reward when return to the
owner by any means, regardless calling beforehand or returning to the address


Therefore, base on the argument
above, Leila is at a disadvantaged position as her advertisement is an offer
which allows anyone including Julie to accept the offer following the terms. As
such if Julie were to her, she might succeed if she can prove that the
advertisement had no instructions to call if item was found. In Leila’s case,
withdrawal/revocation of the offer must be presented to officially, the verbal
conversation does not legally see the offer as withdrawn.


1b) Although she did not see the
advertisement first hand her knowledge of the offer from a third party is valid
(The Acceptance, n.d.)

Similarly, in Gibbons v
Proctor 1891 64 LT 594. The claimant had information which would be held
with the arrest of a 3rd party Claimant told information to a colleague.
Defendant posted an offer of a reward, requesting the information claimant had
provided. Claimant became aware of the offer from colleagues. Defendant’s offer
identified as having been accepted when Defendant received the relevant
information, at the time at which the offer was accepted, Claimant was aware of
the reward.

The argument that silence cannot
amount to acceptance (Silence as
Acceptance in the Formation of Contracts, 1920) as in Felthouse v Bindley EWHC CP J 35. In this case, a nephew offered
to purchase a horse from his uncle and said that if he did not receive a
response by the weekend, he would consider it as accepted. The horse was sold at
an auction by mistake. They were unable to claim the horse as there was no
contract between the nephew and uncle. In this case, silent is not consenting,
and you cannot have silence as acceptances of the offer in contract law.

In the current case, not hold true
in a unilateral contract so Julie’s actions could have been considered
acceptance of Leila’s offer had she been aware of it.


2) The legal issue in here is whether Adam can sue Edwin for
not fulfilling the contract of selling the vintage car at an agreed price of

A contract is a
binding agreement. A few requirements for a contract to be legally binding are
consensus ad idem (a meeting of minds), consideration of both parties,
intention to create legal relations, capacity to contract and lastly freely
consent to the agreement.

Edwin, as a dealer
in vintage cars, has received an offer from Adam of $500,000. The 1925 Rolls
Royce was an Invitation to Treat (ITT) by Edwin to anyone willing to buy. As a
dealer, similar to a salesman, it is understood that the ITT is for anyone that
sees the car, may make an offer to purchase it. Similar to Fisher v Bell 1961
1 QB 394, a knife was displayed in a shop. I was illegal to sell a weapon but
it was held in court that is was merely an ITT.

 The channel of the ITT was not mentioned in
the question, if Edwin had a store of his own, it would be a Bilateral Contract
but if it was published in social media, advertisement or a poster, it will be
a Unilateral Contract. Thus, making Edwin the Offeree and Adam purchasing the
car the Offeror.

The case shows a
Bilateral Contract with two executory consideration in the form of a promise.
The two promises are the Adam pays $500,000 to Edwin and Edwin sells the
vintage car to Adam.  The consideration
is therefore executory on both sides. This I also knew as Contractual

Edwin has failed
to perform his contractual obligation once he refused to sell the car. Terms of
the contract were laid down by the parties involved.


With a Breach of
Contract, there are some remedies available to Adam. Adam May claim for
damages. Damages is a monetary compensation to the innocent party for the loss
suffered.  He may also Terminate the
Contract, an order of Specific Performance which will force Edwin to fulfill
his obligation or a Prohibitory injunction which prevents Edwin from selling
the car.

In Adam’s
situation, the recommended remedy would be to claim an order of Specific
Performance. In Hyde v Wrench (1840) 49 ER 132 Chancery Division, defendant
offer to sell a farm at £1,000 but a counter offer was mad. Defendant refused
but was brought an action for Specific Performance. Unfortunately, there was no
contract made. Counter offer destroyed the original offer therefore no longer
open to the offered.

Adam is purchasing
a 1925 Rolls Royce, which is a vintage car making it rare and hard to come by.
If it was late model Mercedes Benz, he might be able to terminate the contract
or claim damages for breaching of contract. Prohibitory Injunction prevents
Edwin from selling to anyone else, but it does not stop him from refusing to
sell to Adam himself.

Adam will not be
able to find and purchase another 1925 Rolls Royce. The car Adam was buying
from Edwin is a unique property, and therefore Damages and Prohibitory Injunction
are inadequate.


Express terms are the rights and duties from both the
employee and employer. These terms that can be expressly and specifically
stated, be it orally or in written.

Implied terms are words or provisions that were intended to
be in a contract. This also means implied terms are not expressly stated in the

Moreover, this advertisement was made to the world at large
and Leila would not know who will take the offer, which means it is an unilateral
offer and thus, anyone who finds it and returns it is deemed as an acceptance of
the offer.






Case Study: Silence does not amount to acceptance of an offer so no legally binding contract was in place

Contract Law – Offer & Acceptance.
(n.d.). Retrieved June 10, 2017, from

Contract. Offer. Invitation to Treat.
(1925). Columbia Law Review,25(6), 838. doi:10.2307/1113887

Harvey v Facey. (n.d.). Retrieved June 10,
2017, from

Hussaini, D. (n.d.). Contracts – Elements Of
A Contract. Retrieved June 10, 2017, from

Silence as Acceptance in the Formation of
Contracts. (1920). Harvard Law Review,33(4), 595.

The Acceptance. (n.d.). Retrieved June 10,
2017, from



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