The Impact of Electronic Commerce on Litigation - Case Study Example

The Advertiser Schmepsi refused to give the reward saying that it was only an advertising gimmick and 'a bit of a joke' Michael wants to know if he has contractual rights against the Schmepsi for the $30 million worth of motorcycles. According to Contract Law, and offer once accepted, it makes a binding contract between offeror and acceptor. In the above case actually the offeror is Michael and not Shemepsi for the following reasons. Generally, advertisements are treated as not offers but an invitation to treat i.e. invitation to make an offer.

What Schemepsi has done is only an invitation to treat by making an invitation to collect a certain number of coupons in exchange for a prize. Bold, unimaginable, and impractical orders are made in the form of advertisements deliberately to attract attention and not to really be bound by them. Whoever notices such advertisements should not be carried away by them and not make serious commitments based on them as they could always be avoided by the advertisers on the plea that they were only invitation to treat (invitation to bargain in" U.S") (invitation to offer in "India") "An inv "An invitation to treat invites another to make an offer which can be accepted or rejected.

In Fisher v. Bell [1961] 1 QB 394 the court held the display of an article for sale is not an offer for sale. Similarly, the Pharmaceutical Society of Gt Britain v. Boots Cash Chemists [1953] 1 QB 401 held that displaying goods for sale on a supermarket shelf was not an offer. In Partridge v.Crittenden [1968] 2 All ER 421, Partridge was convicted for offering for sale wild birds by an advertisement in a 'classified advertisements' column but the conviction was quashed since the advertisement was only an invitation to treat.

In the same way in Harris v. Nickerson (1873) LR 8 QB286, a broker failed to recover damages for breach of contract after attending an advertised sale when the lots he was interested in were withdrawn. Advertisements by companies may constitute an offer. In Carlill v.Carbolic Smokeball Co. (1893), the defendants in a series of advertisements offered to pay 100 to any person who contracted influenza after using their patent 'smoke ball' three times a day for two weeks and stated that they had deposited 1000 in a bank to meet any claims.

The plaintiff sued for 100 and the court held that the deposit of 1000 indicated an intention to pay claims and that the advertisement was an offer. Brochures, price lists and so on are invitations to treat, as are quotations" ( Judge, Stephen. Business Law (2nd ed.).New York, NY USA: Palgrave Publishers, 1999.p 113.http://site.ebrary.com/lib/britishcouncilonline/Docid=2003005&ppg=113)