Contract Law: Carlill V Carbolic Smoke Ball Company

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Area of Law
This case deals with contract law that determine whether the validity of contract has been satisfied.
Principles of Law
A contract may be defined as an agreement between two or more persons which is legally enforceable by one party against the other. An agreement must contain six essential elements to be formed as a contract. If any one of them is missing, the agreement will not be legally binding.
Firstly, the agreements must be made with various legal intentions. There must be an intention existed on both parties to presume legally binding obligations. In the case: Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, Smoke Ball Company had advertised their patented products (smoke balls) on a newspaper, and they said whoever used the smoke balls according to the instructions provided, still catch an influenza, the Company will pay £100 as a reward. Carlill who caught influenza after used the smoke ball as directed. Also the Smoke Ball Company had deposit money into a bank account for the purpose of paying the advertised reward. Therefore, it had established an objective existence of intention. In addition, agreements are made in a commercial context, it will normally be indicated that the parties intend to be legally bound. However, in order to make an agreement to be not legally binding, there must be evidence provided to prove that the agreement was intended to rely only on feeling of honour or friendship. (Esso Petroleum Co Ltd v Commissioners of Customs and

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