A company's advertisement promises £500 to anyone who uses its heater as directed for two weeks and still catches flu, and states that it has deposited £1,000 with a bank to show sincerity. Sam does so and falls ill. What is the best analysis?

Answer and explanation

Correct answer: B. A unilateral contract arose, accepted by Sam's performance, as in Carlill v Carbolic Smoke Ball

  1. Step 1: The deposit of money shows an intention to be bound.
  2. Step 2: In Carlill, performance of the stipulated conditions was acceptance, and notification was waived.
Answer
A unilateral contract arose, accepted by Sam's performance, as in Carlill v Carbolic Smoke Ball.
Why not the others: The deposit shows the promise was serious; notification can be waived in a unilateral offer; acknowledgement is not needed.

Practise more Formation, consideration and intention.

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