FE-1 Law Of Contract Practice Questions - FE-1 Final Examination - First Part Law Of Contract Exam

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A company advertised a chemical smoke ball, promising to pay £100 to anyone who used it as directed and still caught influenza, and stated it had deposited money in a bank to show sincerity. A purchaser used it correctly and caught the flu. Applying the principle most influential in Irish law, what is the position?

No contract arose because the advertisement was mere sales puff with no intention to be bound. A binding unilateral contract arose; performing the stipulated conditions constituted acceptance. No contract arose because the purchaser never communicated acceptance before using the product. A contract arose only if the purchaser first notified the company of an intention to use the product.

Correct Answer:

A binding unilateral contract arose; performing the stipulated conditions constituted acceptance.

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