Question

ABC Farms Ltd has lost one of its horses due to a broken fence which allowed the horse to escape. ABC decides to post a notice in the local newspaper offering a $200.00 return for the return of the lost horse. The horse is easily identifiable from any other due to unique marking in that its ears and head are black and the rest of it is white. John Smith shows up a few days later at ABC with the horse and claims the 200.00 reward. ABC accepts the horse but is going through some rough financial times and says they won’t pay the reward because John Smith did not communicate with them beforehand that he was going to look for the horse and would accept the offer to return the horse. What legal argument can John Smith make so that ABC will be contractually bound to pay him the reward? What landmark case would he rely on? This assignment relates to the following Course Learning Requirements:

CLR 1: Compare strategies used to manage risks in an organization's business activities

CLR 2: Synthesize substantive laws that may impact businesses

CLR 4: Explain the relevance of internal controls in a business that could mitigate business and legal risks and promote compliance with laws

Answer 1

ABC farm has made a Unilateral contract

In the unilateral contract, there is the only party involved in making the contract who is called the offeror and the contractor is considered as accepted after the performance by other parties.

John Smith can make a legal argument that the post mentioned by ABC Farms in the newspaper offering $200.00 on the return of the lost horse is a unilateral contract. In the given case, ABC Farms’ notice in the local newspaper shows a promise to pay an amount of $200.00 to the finder of the lost horse. ABC farm is legally obligated to fulfill the contract and pay John Smith $200.00 otherwise John Smith has the legal right to sue ABC farm.

The landmark case that he would rely on is - Carlill v Carbolic Smoke Ball Company. In this case, the decision was made by the court of appeal according to the English contract law. The case held that the advertisement that contains certain terms to get a reward made a binding unilateral contract that is considered to be accepted by anyone who performs the terms mentioned.

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