Case Study 2

Alan runs a beauty salon called Tender Treats. . Alan decides to promote the business by advertising a ‘special offer’ in the local paper. The advertisement he places in the local newspaper states that Tender Treats will, on the production by the customer of the advertisement, give that customer a manicure/pedicure (mani/pedi) for the low price of $15.

The day after the advertisement is published some 60 people arrive at the salon asking for the special manicure/pedicure for $15. Alan is overwhelmed by the response and realises that the salon will lose a lot of money if this promotion continues. Alan decides to put up a sign in the Salon’s window which states THE OFFER OF MANICURE/PEDICURE AS ADVERTISED HAS NOW FINISHED.

Explain the law as it applies to the following persons:

• 40 customers who produce the advertisement before the notice goes up in the window. Are these customers able to enforce any legal agreement? Explain with reference to contract law.

• 20 customers do not have the advertisement with them, but still want to participate in the promotion. Are these particular customers able to enforce any agreement?

• Could Alan argue that the payment of $15 is insufficient for the promise of what would normally be a $60 manicure/pedicure, and consequently there are no legal obligations on the business?

Alan believes he has now withdrawn the promotion and has no further obligation to provide cut price mani/pedis. Is this correct?

The next week Alan puts the price up to $75 and puts out a new advertisement in the  paper saying your nails will look so good, that anyone who doesn't get a date within 7 days of getting a mani/pedi will given a free haircut.  Jill gets a mani/pedi, does not get a date and comes in two weeks later for a free haircut,  Does Alan have to comply?