We need to use the IRAC formula to answer ALL the questions below.

Background information HSF1: Mrs Smoke read an advertisement in a magazine about a new health product (Carlill's Cough Ointment) that claimed to 'cure any type of cough within two weeks'.The instructions stated that 'users should apply the ointment three times daily to the throat region', and 'within two weeks the cough will completely disappear'.The advert also claimed it would fully refund the cost of the medicine as well as pay $500 to anyone who followed the instructions and continued to have a cough after a two-week period.The advert also stated that the company had deposited $10,000 with its bank, 'showing sincerity in the matter'.

Mrs Smoke took the ointment three times daily for two weeks as per the instructions but continued to have a severe raspy cough. When she approached the Carlill Cough company to claim a refund and the $500, they refused to give her the money, claiming their advert was a mere puff and an invitation to treat, not an offer.

Advise Mrs Smoke.

In advising Mrs Smoke, use theIRAC formulato apply the law to the facts.

Q1: Which of the following statements accurately state the legal ISSUE/S in the case above? (There can be more than one answer)

Which answer:

A. The broad legal issue is whether the medicine was too expensive given it did not work properly.

B. The broad legal issue is whether the contract was breached between Mrs Smoke and Carlill Cough because the offer was not accepted by Mrs Smoke

C. The broad legal issue is whether there was a contract formed between Mrs Smoke and Carlill Cough company.

D. The specific legal issue is whether the reward formed the basis of a contractual promise because the company believed in it's medicine

E. The specific legal issue is whether the advert was a counter-offer, which is capable of acceptance by Mrs Smoke, simply by her following the instructions

F. The specific legal issue is whether the advert was an offer to the world, capable of acceptance by Mrs Smoke, simply by her following the instructions

Q2. Which of the followingare relevant RULE/S, defined and cited correctly, relating to the case above?

(There may be more than one correct answer)

A. In order to form a legally binding contract, there must be an offer and acceptance.

B. In order to form a legally binding contract, there must be an invitation to treat.

C. An advertisement is usually an invitation to treat (Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd[1952] 2 QB 795). However, an advertisement may also amount to an offer to the world (a unilateral offer) if there is evidence in the advertisement of sincerity to perform a promise upon acceptance. If the evidence is present, that offeror will be bound by contract(Carlill v Carbolic Smoke Ball Co.[1893] 1 QB 256).

D. An advertisement is an offer (Pharmaceutical Society of Great Britain v Boots Cash Chemists) which upon acceptance will form a contract between the advertiser and the offeror.When an offeree remains silent after an offer is made, there will be no acceptance (Felthouse v Bindley).

E. Where there is a unilateral offer, provided the offeree responds to the offer in the same way (orally, or in writing), then the offeror will be bound in contract (Hyde v Wrench[1840] 49 ER 132).

F. A legally binding contract requires consideration.Where there is no consideration provided by one party to the contract, the court will consider intention to create legal relations, because if there is intention then consideration does not matter (Anderson v Glass).

Q3. Which of the following is a correct and relevant ANALYSIS/APPLICATION of the RULES, relating to the case above?

(There may be more than one correct answer)

A. The facts of this HFS are almost identical to the case ofPharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd[1952] 2 QB 795.

B. The facts of this HFS are almost identical to the case ofCarlill v Carbolic Smoke Ball Co.[1893] 1 QB 256.

C. Mrs Smoke, like Mrs Carlill, purchased the medicine from the seller based on the advertisement, which evidenced an intention to be bound by contract because of the deposit of monies into a bank account.

D. Mrs Smoke, unlike Mrs Carlill, did not take the medicine as instructed, so on this basis, the facts can be distinguished from that case.

E. Applying the rule of precedent, the court will not follow the decision inCarlill v Carbolic Smoke Ball Co. [1893] 1 QB 256, and Mrs Smoke will not be able to claim the $500 and receive a refund for the medicine, because a cough is different from the flu.

F. Applying the rule of precedent, the court will follow the decision inCarlill v Carbolic Smoke Ball Co.[1893] 1 QB 256, and Mrs Smoke will be able to claim the $500 and receive a refund for the medicine.

Q4. Which of the following is a correct and relevant CONCLUSIONupon application of the relevant rules, relating to the case above?

(There may be more than one correct answer)

A. There is a contract formed between Mrs Smoke and the Carlill Cough company.

B. There is no contract formed between Mrs Smoke and Carlill Cough company.

C. The Carlill Cough company will not be required to refund the money and pay the reward as per the promise in the advertisement.

D. The Carlill Cough company will be required to refund the money and pay the reward as per the promise in the advertisement.

Q5. Background Information HSF2 (slightly different from the first one):

Mrs Smoke read an advertisement in a magazine about a new health product (Carlill's Cough Ointment) that claimed to 'cure any type of cough within two weeks'. The instructions stated that 'users should apply the ointment three times daily to the throat region', and 'within two weeks the cough will completely disappear'.The advert also claimed it would fully refund the cost of the medicine as well as pay $500 to anyone who followed the instructions and continued to have a cough after a two-week period.

Mrs Smokeapplied the ointment three times daily for only one week (she did not follow the instructions) but continued to have a severe raspy cough after two weeks. When she approached the Carlill Cough company to claim a refund and the $500, they refused to give her the money, claiming their advert was a mere puff and an invitation to treat, not an offer.

Which of the following is correct and relevant to the case above?

(There may be more than one correct answer)

a. The broad legal ISSUE for this case is whether or not there is a contract formed between Mrs Smoke and the Carlill Cough company, and the main RULE is from the case ofCarlill v Carbolic Smoke Ball Co.[1893] 1 QB 256.

b. The broad legal ISSUE from this caseis related to consideration and the case of Anderson v Glass.

c. The APPLICATION of the RULEinCarlill v Carbolic Smoke Ball Co.[1893] 1 QB 256 will be different from HSF1 because the facts are different in HFS2.

d. The APPLICATION of the RULE inCarlill v Carbolic Smoke Ball Co.[1893] 1 QB 256 will be the same for this case (HFS2) as HSF1.

e. The CONCLUSION will be the same as HSF1 because the facts are exactly the same.

f. The APPLICATION and CONCLUSION will be different to HSF1 because in this case the Carlill Cough company did not place money in a bank account and Mrs Smoke did not take the medicine as instructed.