Comon Law Case Study Example | Topics and Well Written Essays - 3000 words

Comon Law - Case Study Example The defendants were owners of Company making medicinal compounds used in the treatment of breathing ailments. They issued an advertisement claiming that they would offer ' 100 to anybody who could contract influenza after using their smoke balls and claimed that they had deposited '1000 in a bank as a token of their sincerity for their claims. (Lindley and Smith, 2004). The Company remonstrated that there was no contractual obligation between them and Mrs. Cargill, since she had not informed the Company of her acceptance of contract - testing and using the product. The Courts, comprising of Judges Lindley, Bowen, A. L. Smith L. JJ. held that the very fact of buying and using the product constituted acceptance and could be enforceable in a Court of Law. (Old Cases with Weird Facts Still Define our Law of Contract. 2006). 2. Terms of contract: The terms of the contract should be clear and understood by contracting parties. It should be lawful and not against public policy, and should not have "unusual hazards for the contracting party" (Contract Unenforceable Transactions) 3. Legal relationships The main objective of the parties to the contract is to enter into valid contractual obligations and create legal relationship. "The parties must intend that the offer and acceptance be binding upon them. There is a presumption operating in commercial contracts that the parties intend to create legal relations." (Contract Law). 3. Consideration: This is an important aspect of contractual law since without consideration the contract may be voidable at the option of the parties. The aspect of consideration has been the bedrock of many legal disputes but the landmark case of PepsiCo Co needs to be mentioned. In the case of Leonard v PepsiCo Inc. 88.F.Supp 2 d 116 (SD NY 1996) in which a young man sued the PepsiCo Company in an attempt to enforce an offer made through television commercial for redemption of 7,000,000 Pepsi Points for Harrier jet fighter aircraft. In this case decided in 1999, the Judge, Kimba Wood ruled that this case could not be enforced on three counts: A. PepsiCo's commercial been only an advertisement and did not constitute a valid offer to the world at large, or in other words there was no consideration flowing from the parties. It would be difficult to imagine that one could get a fighter jet aircraft for $ 7,000,000,when" the cost of a Harrier Jet is roughly $ 23 million dollars, a fact of which plaintiff was aware when he set out to gather the amount he believed necessary to accept the alleged offer." c. There was no communication between the alleged contracting parties which was enough to satisfy the Statute of Fraud, which the applicant had claimed from the company. (Leonard, 1999, p.10). Absence of consideration from both the contracting parties could be witnessed in cases of gifts, payments made for charitable purposes, etc., where there may not be mutual consideration 4. Capacity to enter into contracts: The parties entering into contract should have capacity to enter into it, like being of majority age, free from mental disabilities or under state of inebriation when entering into con