busness law

busness law

Using the 4 step process, consider whether the elements of intention and
consideration have been satisfied in the above scenario.


The legal issue present is that whether there is an intention and consideration establish between Matt and John.


A contract must consist of the following elements namely intention, agreement and consideration before it can come to exist ( "making a contract" 2015). However, the element that need to be converse here is intention and consideration only.

In order for intention to be initiate, an objective to create legally bound relationship must exist on both sides of parties. As per case of Carlil v Carbolic Smoke ball Co (1893) 1QB 256 (Lambiris 2012 Pg171) whereby Elizabeth Carlil bought a smoke ball that could protect users against influenza from Carbolic Smokeball Company. With the basis that the smoke ball is so effective, the company advertised the product by the willingness to pay 100$ to those that use the smoke bomb as per instruct but eventually still got influenza. In addition, the company had deposited 1000$ to a bank account which purpose is to pay the rewards. Upon seeing this advertisement, Carlil bought the smoke ball and use it as per instruct. Nevertheless, Carlil still caught influenza and sue Carbolic Smokeball Company because of their denial to pay the 100$ reward stating that there are no enforcable contract with Carlil during the arrangement was made. The legal issue presents here is whether or not an intention to be legally bound was found upon the promise of Carbolic Company to pay the rewards. The court held the presumption of the company to deposit in 1000$ as an act to be contractually binding thus the court decide that there was an intention to be legally bound by both parties.

The court also must look at the external circumstances namely the relationship between both parties whether it is a commercial or merely a social...

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