Breakout Case Study

SAMPLE IRAC QUESTION – SAMPLE ANSWER

LEGAL ISSUES:

Is there a contract between Josh and the owners of Breakout, entitling Josh to a refund of the purchase price and $100.00.This involves three sub-issues:

1. Is the advertisement an offer that is capable of acceptance by performance?
2. Did Josh accept the offer by performance?
3. Was the advertisement cancelling the previous offer effective as a revocation of the first offer?

RULES:

Only six (6) of the nine rules listed below are relevant to the issues raised above. You need to match the rules to the issues (each issue has two matching rules).

1. To decide whether an offer has been made the court will apply the test of what a reasonable person would think in the circumstances (Carlill v Carbolic Smokeball[1893] text p.234). This is an objective test to be determined based on the facts and circumstances surrounding the particular situation.
2. Usually an advertisement is considered to be an invitation to treat, i.e. the person placing the advertisement is inviting readers to respond to the advertisement to make an offer -Partridge v Crittenden [1968] (text p.235 f/n 5). However, it will depend on the terms of the offer. For example an advertisement for reward may be an offer, see Carlill v Carbolic Smokeball [1893], text p.234.
3. The general rule is that acceptance must be communicated to the offeror – Powell v Lee (1908).
4. Where there is a unilateral contract and the terms of the offer require the performance of an act, performance will amount to acceptance of the offer Carlill v Carbolic Smokeball [1893], text p.234.
5. An offer can be revoked at any time prior to acceptance. . Goldsborough Mort Ltd v Quinn (1910) text p.233.
6. However revocation of an offer must be brought to the attention of the offeree – Dickenson v Dodds (1876)

APPLY:

To decide whether Breakout has made an offer to Josh, the court will apply an objective test to determine what a reasonable person would think based on the facts and circumstances in this situation. (Carlill v Carbolic Smokeball[1893] text p.234). An advertisement is usually seen as an invitation to treat, and needs to have a respond by the offeree, Partridge v Crittenden [1968]. However, Breakout’s advertisement in the magazine is more than an invitation to treat. Breakout has made an offer to any one who purchases and uses their product. Josh can argue that a reasonable person would assume Breakout intended to be bound by the terms of the offer for compensation (reward) in the advertisement.  Carlill v Carbolic Smokeball (1893).