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Question 1: Mojo Beverage placed the following advertisement in a local newspaper on 25 January:
‘Come one, come all! Fishermen and women of Lake Tranquil. We are offering to pay $100,000 to any person who catches Lord Harry, a trout which we have tagged and released into the lake.’
The following day was the Australia Day holiday. Lake Tranquil was crowded with people fishing both from the bank and from boats. At about lunch time, a rumour spread among the people on the bank that there had been an error in the advertisement: that the true amount should have been $1,000 and that Mojo Beverage had announced that the prize would be the lower amount. The rumour was in fact true. Ben heard this rumour from the stranger fishing beside him, minutes before catching Lord Harry. A Mojo Beverage representative was on hand to certify the catch before Lord Harry was released back into the lake, but did not say anything about the amount of the prize.
Ben is claiming that Mojo Beverage owes him $100,000.
Advise Mojo Beverage, explaining applicable legal principles and citing relevant authorities.
Question 2: (a) Dorper Sheep Sellers Pty Ltd was negotiating the sale of a number of dorper sheep to a firm called Livestock Brokers, which intended to on-sell the sheep. On 1 June Dorper Sheep Sellers sent a letter to Livestock Brokers, setting out the number of sheep for sale and the price per head. It asked Livestock Brokers to reply within 14 days.
Livestock Brokers sent a letter by reply dated 6 June, inquiring whether the sale could be financed on the ‘usual terms’. Dorper Sheep Sellers did not reply.
On 14 June, at the opening of business, Livestock Brokers sent a fax stating: ‘We accept your offer of 1 June for the sale of sheep’. The same day Dorper Sheep Sellers faxed back, saying: ‘You’re too late. We’re just in the process of selling the stock to another purchaser. Formalities will be completed by tomorrow’.
Advise Livestock Brokers as to the rights and liabilities of the parties in the light of the commercial interactions taken place between them.
(b) Presume in (a) above Livestock Brokers sent the fax on 14 June but because of a transmission error Dorper Sheep Sellers did not receive it. Advise Livestock Brokers under these circumstances.
Issue: In the case law that is provided in this business law assignment the issue is whether Ben can claim the amount of $100,000 from Mojo Beverages or not?
Relevant rule: Two fundamental ideas in contract law are offer and invitation to treat. An invitation to treat occurs when someone makes an offer and invites others to counter it. This offer from the other side is not first finding. However, as soon as the invitation to offer is accepted, the other party offers a counteroffer, which is then either accepted or refused by the first party. Once the other party accepts the offer, a binding legal agreement is formed between the two parties. Advertisements serve as invitations to treat; an offer is made when a customer takes an item to an offer; and a product is accepted when a store employee does so. An offer may be given to a single individual, a group of individuals, or occasionally the entire planet.
• A particular individual; • A group of individuals; • The entire world—applicable to anybody who reads the advertisement
All the people to whom the offer is targeted should be informed of and made aware of the offer that has been used as an invitation. If that person is not aware of the offer, it cannot be withdrawn.
Acceptance: In light of the scenario presented in this business law homework, To give the inference that the person has acted in response to the offer made, acceptance of the offer should be considered as an unequivocal statement and compliance with its terms. In the case of R v. Clarke1, the rule of Communication of an Offer was established. The offer must be deemed to be accepted if it is determined that the offeree was acting in a certain manner in response to the offer.
The contract is legally binding once there is an officer and a subsequent acceptance. A contract cannot be enforceable without a consideration.
An advertising should be considered an invitation to treat, the Court of Appeal ruled in the case of Carlill v. Carbolic Smoke Ball Co2. Additionally, it was decided that if a contract's provisions about the awards that would be given out were all stated in an advertisement, it was the company's responsibility to provide the awards to the other party in the event that the terms of the contract were fulfilled. A legally valid contract would develop once there was an officer and a subsequent acceptance of that offer, and this will make the deal binding.
Revocation: In the scenario covered by this business law assignment, verification will only be present once the offeree is aware that the offer has been formally rescinded.
In Pharmaceutical Society v. Boots (1953)3, the court made a distinction between an invitation to treat and an offer.
Application: Mojo Beverages published an advertisement in the neighbourhood newspaper offering to pay $100,000 to anyone who would catch Lord Harry and then release it into the lake. This case involved a business law contract assignment. The following day, which was an Australian Day holiday, Lake Tranquil was at its busiest, and everyone was fishing from both banks. After some time, a person began to circulate the rumour that the advertisement was false and that the true prize was actually $1,000. Additionally, according to the rumour, Mono Beverage has reduced the price. Ben learned that this rumour was accurate a few minutes before he was able to hook the fish. A representative of Mojo Beverages attested that Ben had caught the trout and immediately released it back into the lake. The salesperson made no comments regarding the cost of the goods.