Business Law – Discuss whether the element of agreement required for the formation of a contract can be established

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Case

Chickens Galore is a chain of chicken restaurants in Australia. In order to boost the sales of the chain, it advertised on radio, TV and in newspapers that it was running a promotion whereby a token would be stuck to the inside bottom of the Chicken dinner box and if 25 coupons were collected they could be redeemed for a scratch ticket. Further details explained as:

“Scratch a ticket with a gold car, present it to the Chickens Galore head office and win the grand prize of a Mazda CX-9. Hurry, as it is only available for a limited time.”

 Brian Smith was very excited and was waiting for the doors of his favourite Chickens Galore Restaurant to open the next day. He ordered 25 Chicken dinner boxes and after a marathon eating session redeemed the coupons for a scratch ticket. He then collapsed and had to be taken to hospital to have his stomach pumped.

Obviously, not every customer had an interest in returning to Chickens Galore and buying a Chicken dinner just for the chance to win a prize and as a consequence many boxes were thrown away with the token inside. Christian Mores scavenged through the bins of his local Chickens Galore restaurant and pulled the tokens out of the discarded boxes. Within a short time he amassed 50 coupons. He then went inside the restaurant to redeem the coupons for two scratch tickets and was astounded to scratch two gold cars. Christian then drove straight to Chickens Galore head office, where he showed the receptionist the winning tickets. While he was waiting in the front room as directed by the receptionist, another Chickens Galore worker appeared and posted the following notice on the front door of the office, which Christian strolled over and read:

“Due to a printers’ error, faulty scratch tickets were included in the Chicken dinner promotion. Chickens Galore regrets to advise that these tickets are null and void and as a consequence it will not be honouring any prize claimed. Chickens Galore apologies for any inconvenience and expects to announce an exciting new prize competition soon.”

 While Brian was in hospital Chickens Galore announced on radio, TV and in newspapers that it had discovered that there had been a printer’s error in its scratch tickets and that instead of only one winning scratch ticket in the promotion for a Mazda CX-9, every one in five scratch tickets were winning tickets for Mazda CX-9’s. Chickens Galore was therefore immediately declaring their promotion to be null and void and would not be honouring any prize claims. While Brian did not see or hear these reports, several nurses at the hospital did. He overheard them casually talking about Chickens Galore difficulties and the cancellation of the promotion while they were doing their work.

Brian scrambled for the ticket in his pants pocket, scratched it and found a gold car. Figuring that he had heard nothing official from Chickens Galore, he discharged himself and headed for the Chickens Galore head office with hopes of redeeming it for a Mazda CX-9. When he arrived there was a crowd of angry people standing around the notice on the front door, obscuring it. He therefore did not read it, and instead strode up to the receptionist and presented his ticket.

It transpires that even Christian was preceded by another customer, whose claim Chickens Galore had decided to honour since it had already bought the single Mazda CX-9 that it had intended to give away as the grand prize.

Question

Assume that the elements of intention and consideration required for the formation of a contract exist. Using the four-step process, discuss whether the element of agreement required for the formation of a contract can be established. Is Chickens Galore obliged to provide Christian and Brian each with a Mazda CX-9?

Word count: 1925 words

Use Chicago referencing

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