Carbolic Smoke Company Case Study

A contract is a legally binding formal agreement made between two parties or groups which can be in written or oral form (Uff, 2013). There are three main necessary required conditions for a binding contract to be formed which are; the intent to create a legal relationship between involved parties which can be decided through an objective test given the relevant facts, an agreement being made between both parties in accordance to the law by adhering to the rules of offer and acceptance and there must be consideration for this agreement, which looks at the contract in the form of a deal where goods are exchanged to provide benefit (Uff, 2013). However, it is also required that the person entering into the contract is of sufficient legal capacity.

It also stated that an agreement was in fact made in the eyes of the law, with an offer being made specifically to those who acted upon the requirement that had been put in the advertisement and using the smoke ball in accordance to these terms constituted acceptance of said offer. The court also came to the conclusion that there was good consideration as more people buying Smoke bombs after seeing the advert was clearly beneficial to the company. This led to the carbolic smoke company losing the case and the court demanding them to pay Mrs. Carlill the

It is known to be a very formal form of resolution, having specialist rules and requiring several documents to be produced which results in it being an extremely slow process that could take years. This process is inflexible and the relevant steps must be taken as the matter proceeds. Litigation tends to be an expensive process as a result of how long it takes to be concluded and leads to an unfriendly relationship between parties as they are effectively competing against each other (Uff,