An manufactured smoke balls and they claimed

An offer is defined as a statement of terms
of which a person is prepared to enter a contract which will become legally
binding if accepted by the person who it is addressed to. An invitation to
treat is a statement or action that is designed to draw a person into
negotiations with a view to making a contract. In the case of Alison’s
advertisement, it will be looked upon as an offer. This is due to the fact of
that she has stated the fact that for one week only the flour she is selling is
going for half price.

 

An example to this would be the Carlill v
The Carbolic Smoke Ball Co (1893) case.(Essentials
of Business Law; Macintyre pg39) In this case, the defendants manufactured smoke
balls and they claimed that the smoke balls cured a number of illnesses and made
it impossible to catch the flu. They created a large advertising campaign that
stated if anyone used the smokeball correctly and still caught the flu then
they would be paid £100 and to prove they meant it they went to the bank and
deposited £1000. Mrs Carlill who was the claimant saw the advert and it pushed
her to buy a smoke ball. She used the smoke ball properly and still managed to
catch the flu. When she went to claim the £100 reward, the defendants refused
to pay, arguing that their advertisement was not an offer.

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When taken to court The Carbolic Smoke Ball
Co were ordered to pay Mrs Carlill the £100 that they had originally
advertised. This is due to the fact that on the advertisement they made a
promise of paying the £100 and that could’ve been the mitigating factor for Mrs
Carlill in buying the smoke ball. By them offering the money reward, they
opened up a unilateral contract. This is where the offeror makes a promise to
the offeree but the offeree doesn’t make a promise. For example, The Carbolic
Smoke Ball Co promised to pay the £100 to anyone that used the smoke ball and
caught the flu but Mrs Carlill did not promise to buy the smoke ball.