CARLILL V. CARBOLIC SMOKE BALL CO.
(1893) ALL ER REP.127
FACTS
- The Carbolic Smoke Ball Company placed an advertisement in several newspapers, claiming that their product, the "Carbolic Smoke Ball," could prevent influenza and other illnesses.
- The ad stated that the company would pay £100 to anyone who used the smoke ball as directed and still contracted influenza.
- To show their seriousness, the company claimed to have deposited £1,000 in the Alliance bank as a demonstration of their sincerity.
- Mrs. Louisa Carlill, the plaintiff, used the smoke ball as directed and subsequently contracted influenza.
- She sought to claim the £100 reward, but the company refused to pay, arguing that the advertisement was merely a "sales puff" and not a binding offer.
ISSUES
The central issue was whether the advertisement constituted a valid offer capable of acceptance, thus forming a binding contract between Mrs. Carlill and the Carbolic Smoke Ball Company.
CONTENTIONS
Plaintiff (Mrs. Carlill)
Argued that the advertisement was a unilateral offer to the world at large, which she accepted by using the smoke ball as directed. Since she fulfilled the conditions stated in the ad, she was entitled to the £100 reward.
Defendant (Carbolic Smoke Ball Co.)
Contended that the advertisement was not a serious offer but rather a promotional gimmick. They argued that it lacked the necessary intention to create legal relations and that there was no communication of acceptance from Mrs. Carlill.
ANALYSIS
- The court analyzed whether the advertisement could be considered a binding offer and whether Mrs. Carlill’s actions constituted acceptance.
- It was established that a unilateral offer can be made to the public, and acceptance occurs through the performance of the conditions outlined in the offer.
- The court also considered whether the deposit of £1,000 in the bank demonstrated the company's intent to be legally bound.
JUDGMENT
- The court held in favor of Mrs. Carlill. It ruled that the advertisement constituted a valid unilateral offer, which Mrs. Carlill accepted by performing the conditions specified (using the smoke ball and subsequently contracting influenza).
- The court also found that the deposit of £1,000 in the bank was evidence of the company’s intention to be bound by the terms of the offer. Therefore, Mrs. Carlill was entitled to the £100 reward.
COMMENTARY
Carlill v. Carbolic Smoke Ball Co. is a landmark case that established important principles in contract law, particularly regarding unilateral contracts and the role of advertisements.
- The case clarified that advertisements can be considered binding offers if they demonstrate an intention to create legal obligations and if the terms are specific enough to be acted upon by the public.
- The ruling also reinforced that acceptance of a unilateral offer occurs through the performance of the specified conditions, without the need for direct communication of acceptance to the offeror.
- This case has had a lasting impact on contract law, particularly in the context of consumer protection and the enforceability of promotional offers.