Is It Possible to Claim a Reward You Didn’t Know About?

The Critical Role of Conscious Knowledge in Rewards

The subject matter of this article can be seen in this video. The video presents a compelling case study in the law of rewards, where a couple’s quick thinking led to the apprehension of a wanted criminal. However, their claim for the reward was denied because they contacted 911 instead of the designated “Crime Stoppers” number, as stipulated by the reward offer.

This scenario underscores the complex and often contentious legal principles surrounding rewards. If an individual is unaware of a reward or fails to comply with its specific terms, they may be precluded from claiming it. While this may appear unjust, such outcomes stem from applying well-established principles of contract law, particularly the rules of offer and acceptance. The video is American but, as always, the article discusses this matter from a South African point of view. To understand the legal treatment of rewards, examining the foundational concepts of offer and acceptance is necessary.

The Offer

An offer is, fundamentally, a proposal to contract. In legal terms, it constitutes a declaration of intention by one party (the offeror) to another (the offeree), specifying the performance the offeror is willing to undertake and the terms on which they will do so. Although offers are often directed at specific individuals, they may also be addressed to groups or even the general public (such is the case with rewards).

For an offer to be valid, it must meet the following requirements:

1. The offer must be made animo contrahendi, signifying an intention that its acceptance will result in a binding contract.
2. The offer must contain all material terms, leaving no significant matters to be negotiated.¹
3. The terms of the offer must be sufficiently clear and definite to enable the offeree to accept it simply by stating “yes.” Vague offers, which fail to provide a reasonably clear understanding of the offeror’s intentions, cannot give rise to enforceable obligations.

Acceptance of the Offer

A contract is formed when the offeree unequivocally accepts the offer, at which point the offer is terminated. Acceptance is a clear declaration of intention by the offeree, indicating unqualified assent to all the terms of the offer. This declaration may be explicit (e.g., “I accept your offer”) or tacit (e.g., nodding in agreement in response to an offer made in person).

The requirements for a valid acceptance are the following:

1. Acceptance must align entirely with the terms of the offer.² Conditional acceptances or counter-offers do not constitute valid acceptance.³
2. Only the party to whom the offer is made may accept it. Where an offer is directed to a general or specific audience, only members of that audience may validly accept it.⁴
3. If the offeror prescribes a method of acceptance, it must generally be followed.⁵ However, under the reliance theory, an alternative mode of acceptance may suffice if it reasonably leads the offeror to believe the prescribed form was followed.⁶
4. Acceptance must be a conscious response to the offer. This criterion is particularly significant in cases involving rewards.

Rewards

Rewards are unique in that they often involve offers made to the public, rather than a specific individual. While it is not possible to contract with the general public, an offer can be directed at the public or a specific segment, creating contractual obligations with individuals performing the required act. This principle was established in the landmark English case of Carlill v Carbolic Smoke Ball Company.⁷ In Carlill, the manufacturer of a medical product promised £100 to anyone who contracted influenza after using the product as directed. The court upheld the claim of a customer who met the conditions, holding that the advertisement constituted a valid offer accepted by the claimant’s compliance with its terms.

Similarly, in Bloom v American Swiss Watch Company,⁸ the American Swiss Watch Company offered a reward for information leading to the arrest of thieves who had stolen its jewellery. Unaware of the reward, Bloom, the claimant, provided the necessary information and later sought to claim the reward after learning of its existence. The court denied the claim, emphasising that an offeree must have prior knowledge of an offer to accept it. As stated by the court, “until the plaintiff knew of the offer, he could not accept it, and until he accepted it, there could be no contract.”

Conclusion

Though sometimes seen as harsh or unjust, the law governing rewards is deeply rooted in contract law principles, particularly the requirement that acceptance must be a conscious response to an offer. A person who is unaware of an offer cannot accept it, and without acceptance, no contract is formed. This principle upholds the essence of mutual consent, which is fundamental to any binding contract.

In summary, the law of rewards exemplifies the intersection of contract law and public policy, highlighting the importance of clear communication and adherence to specific terms. The cases discussed demonstrate that offers must be precise, complete, and accepted in accordance with their terms for a contract to be valid. Whether the offer is made to the public or to a specific individual, the requirements for offer and acceptance remain crucial. While these rules may seem rigid, they ensure contractual agreements’ fairness, certainty, and clarity. Thus, the study of rewards in contract law clarifies the complexities of contractual obligations and reinforces the necessity of informed and deliberate participation in legal arrangements.

Written by Theo Tembo

1. OK Bazaars v Bloch 1929 WLD 37; Lambons (Edms) Bpk v BMW (Suid Afrika) (Edms) Bpk 1997 (4) SA 141 (SCA). ↩︎
2. This is referred to as the “mirror image rule“. ↩︎
3. McKenna Inc v Shea 2010 (1) SA 35 (SCA) at par [17]. ↩︎
4. Bird v Sumerville 1961 (3) SA 194 (A). ↩︎
5. Laws v Rutherford 1924 AD 261. ↩︎
6. Pillay v Shaik 2009 (4) SA 74 (SCA). ↩︎
7. [1893] 1 QB 256. ↩︎
8. 1915 AD 100. ↩︎