Is the advertisement “mere puff”? Or is there a binding contract between Michael and Slimy Motors Pty. Ltd.or the manufacturer who authorized the advertisement?
Five elements which must be established before a contract can be formed- offer, acceptance, agreement, consideration and intention;
If a statement is mere puff, it will not be an offer because the maker of the statement did not intend it to be so.
Let us analyze these five elements in this case one by one:
The advertisement on the television is obviously an intention to treat by the manufacturer.
[Offer and acceptance]
Regarding the representation ”The best car in the world”, any reasonable person would understand the statement as conveying no more precise meaning than that the regarded itself as offering the best deal.
“The advertisement invites members of the public to come and test drives the new model” means the advertisement was an offer to anyone who had watched it.
In Carlill v Carbolic Smoke Ball Co  1 QB 256 AT 261-2K Lindley LJ said: Advertisement offering rewards are offers to anybody who performs the conditions accepts the offer. In point of law this advertisement is an offer to pay to anybody who will perform these conditions and performance of the conditions is the acceptance of the offer.
Communication of acceptance is not necessary for a contract when people's conduct manifests an intention to contract. Thus in this case, satisfying conditions for testing drives one of their cars within 12 hours of this advertisement appearing on television constituted acceptance of the offer.
And there is also benefits for both parties in this case: Michael get a chance to win a car and the dealer get more customers attracted by the ads and coming to the show room thus get more potential sales and the manufacturer get more potential sales as well.
Although there is no traditional written agreements in this case, in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523, it was said ‘Where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them in circumstances which indicate that they were to be paid for in accordance with the offer, it is open to tribunal of fact that the offer was accepted according to its terms.’ So in this circumstances it can be shown that each party has assented to the contract.
The case does not mention whether there is another contract between the dealer and the manufacturer, but they must have close relationship and we can believe the dealer is aware it will involved in the contract between customers and the manufacturer thus has a binding contract with Michael as well by tacit even if there is no written agreements with the manufacturer.
“Full details will be made available at the time of test driving the car” showed the serious intention of attracting audiences to be involved in the competition which evidenced that the advertisement was not a mere puff.
Michael has a binding contract with both the manufacturer who authorized the advertisement and the dealer who gave him the test drive.
The representation -”The best car in the world” is a mere puff thus is not a binding promise. And after testing driving the car, Michael asked for the details of being eligible, which implies Michael basically was satisfied with the quality of the car.
1) Is the representation -”The best car in the world” mere puff? (Or can Michael get compensation because of the disappointment of the quality of the car)
2) Regarding to the disclaimers, is this a misleading or deceptive conduct or it is Michael’s mistake.
2) Is the competition a fraudulent