Why Rewards are a unilateral contract

The question

“David placed an advert in a newspaper offering a reward of £700 to anyone who returns his lost dog.”

The ordinary answer

Generally speaking advertisments in the paper is an invitation to treat (ITT) and not an offer. We know this because of case authorities like Partridge v Crittenden [1968] 2 All ER 421 where the court decided that similarly advertisements in periodicals and magazines are typically ITT. Thus posted advertisement was more of an invitation to treat than an offer. Crittenden simply expressed his intention to accept proposals from prospective purchasers as a starting point for future negotiations. What about reward type cases - they need to beargued the other way.

A different approach

Was this a unilateral contract? In Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256 the Court of Appeal CA held that the advertisement was an offer and D had to pay. D tried to argue that the offer was too vague to be valid, in that it had no addressee and was not seriously intended as nobody would make an offer of this kind to the whole world. Finally it could not be taken seriously because the offer had no time limit, which would make no sense from D’s perspective. Bowen LJ: we have to ask “how would an ordinary person, reading this document, construe it?” His answer is to take it at face value. He says that the offer was limited either to the duration of the “epidemic” or to the period of usage of the product. The advertisement was not a mere “puff” or “proclamation” because it was intended to be perceived by the public as an offer to be relied on (i.e. more people would buy the product having seen the advert). This shows that intent to create legal relations is needed. Because of the specific nature of the advertisement, it is to be treated as an offer (to the entire world) and not mere invitation to treat, as most adverts are. It is the law that an offeror can, explicitly or impliedly, dispense with the requirement to be notified of acceptance (even though such notification is usually required) e.g. cases of rewards for finding lost pets. In this case, the advert impliedly dispensed with notification. There was consideration because D got a sale in return for the offer. Is this true- what if P would have bought the smokeball regardless of the offer?

Argue the other way

Can we argue this this is not a unilateral offer? First conditional agreements for example it was return of the dog that was a precondition and once this had been completed than the contract arises. The courts might nevertheless make it enforceable as a contract itself where (1) the expression was meaningless as there was nothing left to be negotiated; (2) there is a clear intention to be bound. Second another reason it would not constitute an offer is Vagueness and incompleteness which can void a contract since a valid contract must be capable of determination “with a reasonable degree of certainty” (G Scammell and Nephew v HC&JG Ouston [1941] AC 251). Judges have gone far to cure uncertainty in order to uphold contracts. This is because: there is inherently imprecision in business practice; it is difficult to build in flexibility to an agreement; to protect a party where he has relied on there being a contract; to avoid “uncertainty” becoming a way to escape a bad bargain. They cure uncertainty by looking at previous dealings, employing a standard of reasonableness, severing vague or redundant words from the contract. Third the “intention to create legal relations” is required for a contract. There are two strong (but rebuttable) presumptions that (1) parties do intend such relations in commercial activities and (2) do not intend legal relations in social/domestic agreements. This is because: (1) fear of floodgates claims of social/familial contracts; (2) promoting market transactions by using state coercion to give effect to a commercial agreement; (3) freedom from contract in social situations.

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