The document summarizes several key contract law cases: 1. Carlill v. Carbolic Smoke Ball Company established that serious promises made in advertisements, like offering a reward, can form binding unilateral contracts if the promisor intends for people to rely on the promise. 2. Dickinson v. Dodds held that an offer lapses if the offeree is informed the property is no longer for sale before acceptance, as the offeror has no obligation to keep the offer open. 3. Marshall v. Canadian Permanent Trust said a contract can be rescinded if one party was incapable of understanding the transaction and it was an improvident deal that did not reflect fair market value.

1. Carlill v. Carbolic Smoke Ball Company, [1893] 1 Q.B. 256 C.A.
The Carbolic Smoke Ball Company sold a medical remedy called a “smoke ball” that
consisted of a ball with a nozzle on top from which the user could inhale vapours. The company
claimed that using its product three times a day would prevent the flu. To back up this claim, the
company placed advertisements in a newspaper, offering to pay £100 to anyone who contracted
the flu despite using the ball and informing the public that £1000 had been deposited in the bank
for that purpose.
Mrs. Carlill purchased a smoke ball and used it as directed; nevertheless she caught the
flu. When she tried to claim the money, the company refused to pay. Carbolic Smoke Ball
Company asserted that the advertisement was an invitation to treat and did not constitute an offer.
Mrs. Carlill sued Carbolic Smoke Ball for breach of contract and was successful. The Court ruled
that the company had made a serious offer, not an invitation to treat. By going so far as to place
the money in the bank, the company had indicated that it intended to create a unilateral contract
with users of the smoke ball. This case set a precedent that is still followed today: serious
promises that are intended to be binding and that are made in advertisements must be kept.

2. Dickinson v. Dodds, [1876] 2 Ch.D. 463 (C.A.)
On Wednesday, June 10, 1874, John Dodds signed and delivered to George Dickinson
a document stating the following:
I hereby agree to sell to Mr. George Dickinson the whole of the dwelling-houses,
garden ground, stabling and outbuildings thereto belonging, situated at Croft,
belonging to me, for the sum of 800 pounds. As witness my hand this tenth day of
June, 1874.
P.S. – This offer to be left over until Friday, 9 o’clock a.m. (the twelfth), 12th June,
1874
[signed] J. Dodds.
On Thursday, June 11, Dodds sold his property to Thomas Allan, a third party. He sent
a Mr. Berry to inform Dickinson that the property had been sold. Nevertheless, Dickinson
delivered a formal acceptance to purchase the property to Dodd’s mother-in-law, as Dodds was
staying at her house. He explained what the document contained and asked her to give it to
Dodds. She forgot to do so.
On Friday morning at 7:00, Dickinson delivered a duplicate of his acceptance to Dodds.
Dodds replied that it was too late; he had already sold the property to another party the previous
day. Dickinson took Dodds to court, alleging that the property should rightfully have been sold
to him.
At the trial, the judge ruled in favour of Dickinson, but on appeal the property was awarded
to Allan. The Court held that since Dickinson had been informed that the property had been sold,
he knew that the offer was no longer open for acceptance. Dodds was under no obligation to
keep the property unsold for Dickinson, just as Dickinson was under no obligation to accept
Dodd’s offer.

3. Marshall v. Canadian Permanent Trust Company (1968)
According to doctors, John Walsh was "definitely not capable of transacting business" having just
suffered a stroke. This did not stop Marshall from seeking and obtaining his signature on an offer
to purchase Walsh's land. Two months later, Walsh's affairs were formally turned over to the
administration of Canadian Permanent Trust, appointed under provincial mentally incapacitated
persons legislation. The trust company refused to close the deal arguing that it was
unconscionable. The court said there were two criteria to be met: "(1) that Walsh was incapable
of protecting his interests; (2) that it was an improvident transaction for Walsh. With respect to
(1), it is not material whether Marshall was aware of Walsh's incapacity. With respect to (2), the
onus rests with the plaintiff (Marshall) to show that the price given for the land corresponded to
its fair value." The plaintiff succeeded on both accounts and the contract was rescinded.

4. Etyan v. Bach (1977) 374 A 2d 879
The plaintiffs paid $157.50 for three paintings believing them to be 19th century originals. The
painting, in fact, turned out to be modern reproductions put in old frames. The defendant had said
nothing about their age, although the defendant probably knew that plaintiff thought that the paintings
were antiques. The court refused to grant relief for mistake. While the court noted that in some
circumstances, concealment of a material fact may be as fraudulent as a direct representation, this
was not the case as the price was the key. There is no duty to inform of the obvious.
"If a customer went into a jewellery store and bought for $50 an item which looked like a
diamond pendant set with pearls, it would plainly not be incumbent upon the sales clerk to warn the
customer that what he had selected was a piece of costume jewellery with synthetic gems."

5. R. v. Dawood (1976)
A woman falsified a price tag on an article and then paid for it. "When the appellant took the
jumper and blouse to the checkout counter ... she was representing to the cashier that both
articles had been displayed for sale at this price, although she knew such was false. The
cashier had authority to accept such offer which she did by accepting the cash proffered. At
that point a contract of sale had been made; true, it was a voidable contract as having been
induced by fraud. The cashier had a general authority to accept such offer and to sell the
goods on behalf of her employer."

6. Staiman Steel Ltd. v. Commercial & Home Builders Ltd. (1976)
A purchaser bid for steel at an auction thinking it was a mix of new and used steel, when it
was really only used steel. The court said that since the one party thought that the lot included
new steel and the other that it did not, that this was a mutual mistake. In these cases, "the
court must decide what reasonable third parties would infer to be the contract from the words
and conduct of the parties. It is only a case where the circumstances are so ambiguous that a
reasonable bystander could not infer a common intention that the court will hold that no
contract was created. In this case ... a reasonable man would infer the existence of a contract
to buy and sell the bulk lot without the building steel and therefore ... there was a contract to
that effect binding on both parties, notwithstanding such mutual mistake."

7. Lewis v. Averay (1972)
A person managed to con a person selling a vehicle that he was a famous actor and made off
with the car leaving a forged cheque in the actor's name. The con-man then sold the vehicle
to another unsuspecting man who was looking for a car, this time assuming the identity of his
first victim. The court held that the first contract, though voidable for fraud or mistaken identity,
was valid until so voided and the contract stands before third parties who have, in good faith,
acquired rights under it. Thus, valid title was conveyed to the second victim and the loss was
absorbed by the first victim.