Legal Studies
Question
Series 2 / Item: 24
Name:
Date:
________________________________________________________________________
Topic:
CONSUMERS AND THE LAW
________________________________________________________________________
Case Studies
Read each of the following case studies:
Case #1: Balfour v Balfour [1919] 2 KB 571 - the court was asked to decide if a husband,
who had returned home leaving his sick wife in England, and had agreed to forward to her
£30 per month for maintenance, was legally bound when he failed to do so. The court
found that the two people never intended to make a bargain that could be enforced by law.
Case #2: Todd v Nicol [1957] SASR 72 - the court found that because the plaintiffs had
taken more substantial steps (selling their house in Scotland and moving to South
Australia to live with Nicol) and the defendant had altered her will to accommodate them,
this type of family agreement was legally binding.
Case #3: MMA v Commissioner of State Taxation (1975) 50 ALJR 348 - the court was
asked to consider when an offer was made for the purchase of an air ticket. On issue of
the ticket to the purchaser other clauses were presented. The Chief Justice decided that
the ticket contained too many new clauses to be an offer. Jacobs J. agreed stating that the
ticket was merely a voucher, the contract being made when the passenger embarked on
the plane. Stephen J. disagreed, stating that the ticket was, in fact, an offer that was
accepted on boarding the plane.
Case #4: Pharmaceutical Society of GB v Boots Chemist [1953] 1 QB 401 (Boots Cash
Chemist case) - the issue before the court was whether or not an offer was accepted when
the goods are removed from the shelf or when the customer presents the goods to the
cashier. The Court of Appeal preferred the latter view, considering it a more common
sense view.
Case #5: Carlill v Carbolic Smoke Co. [1893] 1 QB 256 - an advertisement promised a
reward of £100 to anyone who used Carbolic’s smoke balls and contracted the flu. Carlill
used the balls, followed the directions on the pack and contracted the flu. CSC argued that
no contract had been made because Carlill had not communicated his acceptance of the
offer. The court decided that an offer can be made to the world at large.
Case #6: R v Clarke (1927) 40 CLR 227, a reward was offered for the capture of a criminal
who murdered a policeman. Clarke was arrested and his information led to the arrest of the
real murderers; he later tried to claim the reward. The Court was asked to determine if he
was allowed to do so and they decided that he could not because (as he had admitted),
although he had seen the offer previously, he was originally motivated by a desire to save
himself and not by the original offer.
© Kramzil Pty Ltd trading as Academic Teacher Resources
Legal Studies
Question
Series 2 / Item: 24
Case #7: Chappell & Co. Ltd. V Nestles Co. Ltd. [1960] AL 87 – the court had to consider
whether or not chocolate wrappers should form part of the consideration (and thus part of
the royalty payment to Chappell) in a contract. Records were offered for a postal order for
1/6d and 3 chocolate wrappers. The court decided that consideration need not have a
money value. It need only show the existence of a business deal.
Answer these questions:
1
The cases of Balfour v Balfour and Todd v Nicol both discuss agreements made between
members of a family. If family arrangements are frequently not considered to be legally
binding, why is it that the result is different in each case?
4 marks
2
Read Case #4. Goods on display are merely inviting the customer to buy. The store owner
can accept or reject that offer. An advertisement in a shop window, to sell goods, is merely
an invitation for the customer to make an offer to the shopkeeper, even if a price tag is
displayed on the goods. It is the shopkeeper who can accept or reject the offer. Should this
be the correct interpretation of the law? Explain.
5 marks
3
Explain the legal/contractual standing of the above shop. Refer to the decision in Case #4
to support you answer.
4 marks
© Kramzil Pty Ltd trading as Academic Teacher Resources
Legal Studies
Question
Series 2 / Item: 24
4
Read Case #5. Although advertisements are merely invitations to treat, when they contain
a reward, the promise of the reward makes the advertisement an offer and not an invitation
to treat. Why did the court make this distinction?
3 marks
5
Read Case #7. If both parties agree that the consideration is adequate how can they give
legal effect to the contract if they do not write it down?
4 marks
6
What other aspects of contract law need to be considered apart from those discussed
above? Consider:

The decisions in Cases #3 and #6.

The essential elements of a contract.

The rules governing acceptance and rejection of a contract.

Termination and breach of contract do not need to be considered here.
10 marks
Total: 30 marks
© Kramzil Pty Ltd trading as Academic Teacher Resources