case study of carlill vs carbolic smoke ball company

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Carlill v Carbolic Smoke Ball Co – Case Summary

Carlill v carbolic smoke ball company, court of appeal.

Citations : [1893] 1 QB 256.

The defendant sold a medicine which they called a ‘Carbolic Smoke Ball’. When they advertised the product, they stated that they would pay a sum of money to any person who used it and still caught influenza. They claimed that they had already deposited money with a local bank in preparation to meet such claims. The claimant saw one of these adverts and bought the product. However, despite using it properly, the claimant still caught the flu. The defendant refused to pay the money promised in the advert.

• Had the promise to pay money if the claimant caught the flu become a binding contract?

The Court of Appeal held in favour of the claimant. The advert was an offer which the claimant accepted by purchasing the medication and using it as directed. The defendant was therefore bound to pay the claimant the money.

This Case is Authority For…

Adverts are normally invitations to treat rather than offers. However, this turns on whether a reasonable person seeing the advert would think that the advertiser intended to be legally bound by anyone who acted in accordance with the advert. In some cases, such as this one, an advert can be an offer. Relevant factors include:

• How vague the promise is;
• Whether the language indicates that the advertiser is merely soliciting offers or seeking to negotiate;
• Whether the language provides any guarantees or indicates seriousness and sincerity.

An offer can be made to the world at large: these are known as unilateral offers. Unilateral offers are accepted by performing as the offer demands. There is usually no need for the offeree to notify the offeror that he is performing. This is an exception to the rule that acceptance of an offer must be communicated to the offeror. It is justified by the fact that terms and language of the offer normally waive the need for communication.

The defendant also tried to pass the promise to pay money as a ‘mere puff’. A mere puff is sales patter which reasonable people would not take seriously. Lindley LJ stated that this was inconsistent with the defendant’s claim to have deposited the money with a bank. That claim indicated to customers that the defendant was serious.

The court also had to consider whether the claimant provided any consideration for the defendant’s promise to pay. Lindley LJ argued that the benefit to the defendant was the fact that by making the promise, they were more likely to motivate customers to buy the product. Alternatively, he relied on the fact that the claimant inconvenienced themselves (by using the product) at the defendant’s request. Bowen LJ added that the mere use of the product was likely to indirectly lead to more sales. This also benefited the defendant.

Carlill vs. Carbolic Smoke Ball Co. (Court of Appeal 1893) Case Summary

• Bhoomika CB
• Case Laws , Contract Law
• May 6, 2021

INTRODUCTION :

Carlill vs. Carbolic Smoke Ball case dealt with the question if to consider whether an advertising company gimmick can be considered as e xpress contractual promise to pay . Here since a unilateral contract was made, acceptance can be made without formal communication.

The defendant company that is Carbolic Smoke Ball Co. was a London based company. On November 13 th , 1891 they placed an advertisement in several newspapers stating that their product “The Carbolic Smoke Ball”, if used three times daily for two weeks then that person would not be affected by colds and influenza . The company additionally offered to pay 100£ as reward if anyone caught influenza using their product. They also guaranteed this reward by showing a bank statement saying they had already deposited 1000£ in the bank to show their sincerity. Lili Carlill, the plaintiff had bought this smoke ball and used it as directed by the company. Few weeks later, she caught flu.

LEGAL ISSUES:

• Whether there was any binding effect of the contract between the parties? 
• Whether the contract in question required a formal notification of acceptance ? 
• Whether Mrs. Carlill was required to communicate her acceptance of the offer to the Carbolic Smoke Ball Company? 
• Whether Mrs. Carlill provided any consideration in exchange for the reward of £100 offered by the company?

CONTENTIONS:

Defendant’s contentions –

• The defendant company argued that the offer that they made didn’t have a binding impact in order to form a valid contract.
• Secondly, they contended that there was no means of checking how the customer used the product or what procedure the customer used.
• Thirdly, there was no contract since there was no intention to accept and there was no formal communication.
• Thus the advertisement was just a marketing strategy and there was no intention to form any contract .

Plaintiff’s contentions –

• Firstly, the plaintiff argued that promise was not vague and also the construction of the offer was clear which said if the product isn’t effective then the company would reward certain amount for the same.
• Secondly, by depositing large amount in the Alliance bank account, proved the intention to form an agreement from one side.
• Thirdly, the plaintiffs proved that consideration existed in the form of money paid to buy the smoke ball.
• Thus, the advertisement was not merely an empty boast. It characterized all the essentials required to form a contract, more precisely a unilateral contract . Thus the company has to fulfill its part.

RATIO DECIDENDI :

The judges sitting to hear this case were Justice Lindley , Justice Bowen and Justice A.L Smith . All the 3 judges unanimously r ejected the arguments made by the defendants . The reasons given by the judges were:

• To the entire world, the advertisement was a unilateral offer .
• The acceptance of the offer satisfies the conditions required for using the smoke ball.
• The purchasing or using the smoke ball can be considered as a good consideration .
• The company’s deposit of £1000 in the Alliance bank showed the intention to be legally bound .

The court unanimously dismissed the appeal made by defendants and Mrs. Carlill received the compensation of £100. The judges stated that the advertisement shall be treated as an express promise and according to this promise; anyone who contracts the flu despite the preventive ability of the smoke ball as claimed by the company will be paid £100 provided that the ball is utilized as per the directions.

CONCLUSION :

The particular judgment made in Carlill v. Carbolic Smoke ball Co. made a huge impact on English contract law . This is the most cited case in the common law of contract mostly if the case is concerned with unilateral contracts. After this judgment the companies and agencies are more careful about what they advertise to the world at large. It lays foundation to contract law as all the essential elements are mentioned such as offer and acceptance , intention to form legal relationship etc.

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Legal Three

Carlill v. Carbolic Smoke Ball Co. (1893)

IRAC Summary

Issue : Whether there was a binding contract between Mrs. Carlill and the Carbolic Smoke Ball Company through the advertisement of a reward for any person who used their product, the smoke ball, and contracted influenza.

Rule : A contract requires an offer that is clear, unequivocal, and communicated to the offeree, an acceptance of that offer, and consideration to show that the parties intend to be bound by the terms. Unilateral contracts are formed when a party promises something in exchange for the performance of an act by the other party. Acceptance occurs upon performance of the conditions stated in the offer.

Application : The company advertised that it would pay £100 to anyone who contracted influenza after using their smoke ball according to the instructions provided. Carlill used the product as directed and subsequently contracted influenza. The company argued that there was no contract as the advertisement was not an offer but a sales puff and there was no acceptance. However, since the advertisement contained a clear promise for payment in exchange for a specific act, it constituted an offer for a unilateral contract. Carlill’s use of the smoke ball as stipulated was the acceptance of the offer through performance, and her reliance on the promise was the consideration.

Conclusion : The court concluded that there was a legally binding unilateral contract between Carlill and the Carbolic Smoke Ball Company, and as such, the company was required to pay the £100 to Mrs. Carlill.

Detailed IRAC Outline

The primary issue is whether the advertisement by the Carbolic Smoke Ball Company constituted an offer to enter into a unilateral contract that could be accepted by anyone who performed the conditions stated in the advertisement, and whether Mrs. Carlill successfully accepted this offer, entitling her to the reward after contracting influenza despite using the product.

• Offer: An offer must be clear, unambiguous, and communicated to the offeree. It must indicate an intention to be bound upon acceptance.

Unilateral Contracts: A unilateral contract involves a promise in exchange for an act. Acceptance is typically through full performance of the act.

Acceptance: In unilateral contracts, acceptance is typically the performance of the condition of the offer.

Consideration: Consideration is some value given by both parties to a contract that induces them to enter into an agreement to exchange mutual performances.

Application

Offer : – The advertisement promised to pay £100 to any person who used the smoke ball and then contracted influenza, which is a clear representation of an offer to the public.

Unilateral Contracts : – The advertisement can be interpreted as an offer for a unilateral contract where the Carbolic Smoke Ball Company promised to pay upon the occurrence of a specified act (using the smoke ball and contracting influenza despite this).

Acceptance : – Mrs. Carlill accepted the offer by performing the act required (using the smoke ball as directed) which constitutes acceptance in a unilateral contract.

Consideration : – Mrs. Carlill’s action of using the smoke ball as per the instructions provided consideration in the form of reliance on the promise made in the advertisement, which required her to undertake certain actions and possibly forgo other treatments.

The court held that the Carbolic Smoke Ball Company’s advertisement constituted a legitimate offer for a unilateral contract, which Mrs. Carlill accepted through her performance of the act as specified in the advertisement. She provided consideration by altering her conduct in reliance on the promise. Therefore, a binding contract existed, and the company was obligated to pay Mrs. Carlill the £100 promised in the advertisement.

Discussion of the Case

Validity of the Advertisement as an Offer : – The court rejected the argument that the advertisement was a sales puff or too vague to constitute an offer. Instead, it saw the promise as definite and the deposit of £1000 in the bank as evidence of the company’s intention to be bound.

Nature of Contractual Acceptance in Unilateral Contracts : – The acceptance of an offer in a unilateral contract is not through communication of acceptance but rather through the performance of the condition.

Consideration and General Offers to the Public : – The consideration was not solely the use of the smoke ball but also the potential detriment to Mrs. Carlill, who acted based on the company’s promise, altering her behavior and assuming the risk of the product’s failure.

Intent to Create Legal Relations : – The company’s actions and the specificity of the offer indicated an intention to be legally bound, rather than making a mere declaration of intent or wish.

Implications of the Decision : – The case established important precedents for contract law, particularly in relation to unilateral contracts, advertisements as offers, and the sufficiency of consideration through performance and reliance.

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10 Quackery and Contract Law : Carlill v . Carbolic Smoke Ball Company ( 1893 )

• Published: September 1996
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This chapter discusses the case of Carlill v. Carbolic Smoke Ball Company . Continuously studied though it has been by lawyers and law students for close to a century, an air of mystery long surrounded the case; even at the time the very form taken by the celebrated smoke ball was unknown to Lindley LJ, who adjudicated in the case in the Court of Appeal. He is reported to have referred to it as ‘a thing they call the ‘Carbolic Smoke Ball’. What that is, I don't know’. Happily, a considerable volume of material survives that makes it possible to recreate at least something of the historical background and significance of this landmark in the history of contract law and its relationship to the seedy world of the late 19th-century vendors of patent medical appliances.

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Case Summary: Carlill vs. Carbolic Smoke Ball Company

Court : Court of Appeal (Civil Division)

Full Case Name : Louisa Carlill v Carbolic Smoke Ball Company

Date Decided : 8th December 1892

Citations: [1892] EWCA Civil 1, [1893] 1 QB 256

Judges : Lindley LJ, Bowen LJ And AL Smith LJ

Prior Actions : Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484

Defendant : Carbolic Smoke Ball Company

Brief Facts Summary:   The plaintiff believing the advertisement in a newspaper stating the use of the smoke ball would prevent the influenza and flu. She used the smoke ball as prescribed in the advertisement for some time and still had an attack of influenza. She filed the suit for 100£ as mentioned in the advertisement.

Facts: The defendant, Carbolic Smoke Ball Company placed an advertisement in several newspapers on November 13, 1891 of their product which if used 3 times daily for 2 weeks would prevent the flu (a pandemic during 1889-90 which had taken around 1 million lives at that time) and influenza. And also the makers of the product additionally offered a 100£ reward to anyone who would get flu or influenza after using their product as prescribed with a prescription supplied with the ball by stating that they had deposited 1000£ just for the reward and thus leading the people to buy their product.

The plaintiff, Louis Carlill after seeing the above-mentioned advertisement in one of the newspapers bought the smoke ball and started using it from November 20, 1891 until January 17, 1892 exactly as prescribed in printed prescription supplied with the ball. But she had an influenza attack later.

Issues: Lindley JJ on behalf of the court of appeal, noted that the main question at the hand was whether the promise mentioned in the advertisement of a reward of 100£ was meant to be an expressed promise or just a sales puff to lead people into buying their product.

Judgement : The appeal was dismissed unanimously and thus held that the contract between the company and the plaintiff was a valid contract.

Some of the main reasons behind the judgement :

• The offer mentioned in the advertisement was a unilateral offer.
• The use of the smoke ball as prescribed in the advertisement was an implication of acceptance of offer.
• The company’s claim of depositing 1000£ at Alliance Bank showed seriousness to keep the promise.      

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Carlill v. Carbolic Smoke Ball Co

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- [1893] 1 Q.B. 256

Contributed by ALAB

A company’s advertisement included a promise to give customers a reward if the product was ineffective. This ad was an offer to form a contract, and users who didn’t receive the promised results are entitled to the reward.

Is an advertisement for a product that promises a reward to customers who use the product and don’t achieve certain results an offer that may be accepted by customers to form a binding contract?

Yes, the advertisement was an offer and Carlill’s use of the product was acceptance, forming a contract. Carbolic owes Carlill the £100 reward.

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Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum

• Carbolic Smoke Ball advertised their product as an illness preventative, and the ad included a promise to pay £100 to anyone who uses the product as directed and still gets sick. The advertisement also stated Carbolic had placed £1000 in a bank to demonstrate their offer was “serious.” Carlill purchased a ball and used it according to the directions, and got sick. Carlill sued for the £100 reward, and the trial court agreed; Carbolic appealed.
• Hey! This is the holding for Pennoyer v. Neff. It probably isn't the holding for the brief you're looking at. Join LSD+ for full access.
• A named property within the court's jurisdiction is attached to satisfy an unrelated claim, despite the owner of said property being a non-resident of the state.
• A named property within the court's jurisdiction is attached as the basis for the suit (e.g., to quiet title), despite the owner of said property being a non-resident of the state.
• An individual is sued who is a resident of the state, or who has been served with process while physically located within the state.
• jurisdiction - Neff is neither a resident, nor was served while within the state. Service by publication may be valid for an
• proceeding, where the owner would be made aware of the suit due to their property being seized, but not for
• jurisdiction - the action was on the basis of a suit to receive payment owed, and did not relate directly to a property within the state.
• jurisdiction, as the Oregon property was not attached to the initial suit, but rather was added in after the suit happened - note that Neff did not even purchase the property until after the suit had concluded.
• Accordingly, the Oregon court did not have jurisdiction over the initial suit between Neff and his lawyer.
• Enforcement of a judgment without jurisdiction denies due process!
• Additionally, although judgments rendered by other states are entitled to full faith and credit, if that state did not have jurisdiction to render the judgment, it loses such entitlement.

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Carlill v. Carbolic Smoke Ball

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• Carlill v. Carbolic Smoke Ball Co
• English Contract Law
• landmark decision

Carlill v. Carbolic Smoke Ball Co : a landmark decision amidst an epidemic

This article is written by Bhavyika Jain , a first-year learner of Symbiosis Law School, NOIDA.  This article would provide the readers with an insight into the landmark case of Carlill v. Carbolic Smoke Ball Co., which was decided amid an epidemic at that time.

Table of Contents

Introduction

Whenever society faces an epidemic, placebos and fake medicine cures emerge at a rapid scale. In the wake of established medicinal organizations’ inadequacy to provide ready therapies to a unique ailment, there will be elements in society who will try to earn quick money by offering magical cures to the naïve.

Being one of the most cited cases, it explains the concept of unilateral contracts. It highlights the difficulties of unilateral contracts and also helps in understanding that unilateral contracts are the most important part of the contract. Unilateral contracts tend to be most useful at some point in industrial use; promoting products like vaccinations as seen in the present Covid-19 scenario, that guarantee illness prevention, are primarily benefited with the use of unilateral contracts’ enforceability.

Background 

The country witnessed one of the deadliest viruses back in 1918-19 called the ‘ Spanish flu ’ or ‘Influenza’. Influenza is a disease that is caused by a virus that gets transmitted from one person to another through airborne respiratory secretions. If a new strain of influenza virus occurs against the population with no immunity an outbreak can evolve. The cause of extreme mortality of this pandemic came to be known as Influenza type A subtype H1N1, which resulted in millions of deaths.

The pandemic occurred in three waves as is expected of the Covid-19 virus. The first wave of which came in early March, during World War 1 and spread quickly through western Europe and then to Poland. Pneumonia was taken as a symptom to know who has contracted the virus. At a later stage, the flu was spread in almost all parts of the world including countries like India, New Zealand, the United States of America, etc. It was the time when the case Carlill v. Carbolic Smoke Ball Co. came into the limelight.

Aspirin, quinine, arsenic, digitalis, strychnine, Epsom salts, castor oil, and iodine were used to treat the virus because there were no antiviral treatments and no antibiotics to treat the secondary bacterial infections. Traditional medicine treatments such as bloodletting, Ayurveda, and Kampo were also used. Although procedures for notifying public health authorities of the spread of infectious diseases existed in 1918, they did not frequently cover influenza, which resulted in a delayed response. However, actions were taken. On islands like Iceland, Australia, and American Samoa, maritime quarantines were declared, saving many lives. Closing schools, theatres, and houses of worship, as well as limiting public transit and prohibiting mass gatherings were among the social distancing tactics implemented. Face masks became popular in various countries, including Japan, despite disagreements about their effectiveness. As shown by the Anti-Mask League of San Francisco, there was also some opposition to their use. Vaccines were also produced, but they could only aid with secondary infections because they were based on bacteria rather than the virus itself. The extent to which various limitations were actually enforced, differed.

Facts of the case

In the case of Carlill v. Carbolic Smoke Ball Co. (1892) Carbolic Smoke Ball Co. offered, by the means of an advertisement, to pay 1000 pounds to anyone who contracts the increasing epidemic influenza, colds, or any disease caused by catching a cold. As per the printed directions, they even included common flu. To show the seriousness and their sincerity in the contract the company deposited 1000 pounds into the Alliance Bank. Ms. Carlill used the ball in the same manner as was prescribed but still contracted the virus. She sued the defendant and demanded a reward from them.

Contentions of the plaintiff

It was claimed by the company that the advertisement was just a casual advertisement as they had no time to think and create it and there was no intention to enter into a legal obligation. They described it as a puffing advertisement as it was not made to any one person in particular, and there was no communication regarding the acceptance by the plaintiff and also no consideration was present in the proposed contract. Because of this, there is no need for them to pay any reward to the plaintiff.

Contentions of the defendant

The strongest argument as per the defendant was that when one generally gets an offer and is accepted by him, the same should be communicated as well but in this case, it was not communicated by the plaintiff. The court held that it was not a speculative offer but a definite one. It was mentioned in the advertisement that while consuming the smoke ball if anyone contracts influenza or even common flu, he is entitled to receive a reward. So, the advertisement caused the customers to see and act upon it. The money deposited in the bank showed the seriousness on behalf of the company about the offer, so it cannot be considered a puffing advertisement.

Issues raised in the case

The following are the four primary issues that were brought up:

• Did the plaintiff’s action upon the defendant’s advertisement constitute a binding contract between the parties?
• Is a formal notification of acceptance required by the contract in question?
• Is it necessary for Mrs Carlill to notify the Carbolic Smoke Ball Company that she has accepted the offer?
• Is there any evidence that Mrs Carlill gave anything in return for the company’s award of 1000 pounds?

The Court’s analysis of the case

Defendant, Carbolic Smoke Ball Co., argued that their advertisement lacked a binding impact which is necessary to form a valid contract. They argued that the phrases used in the advertisement did not constitute a legal commitment since the provisions of the advertisement were too imprecise to form a contract. They claimed that there was no time limit set and that there was no way to monitor how the smoke ball (product) was being used by customers. For example, a shady customer may not have used the product effectively and then accuses the corporation of failing to deposit the money according to the agreement. There was no contract since forming a legitimate contract necessitates transmission of acceptance intent. Mrs. Carlill didn’t openly or implicitly accept the offer in this situation, nor did she do so through any overt behaviour. As a result, it is evident that the advertisement was merely a marketing technique, and the corporation had no intention of entering into any kind of contract while making an offer to the general public, as per the court.

On the other hand, the Plaintiff stated that the promise was not vague and that the offer was constructed in such a way that it was evident that if the product was ineffective, the corporation would compensate a particular sum. To make things easier, the corporation had also deposited a considerable sum of money in the Alliance bank account. As a result, depositing the money demonstrates one side’s intention to truly sign an agreement. The plaintiffs further established that the money paid to purchase the carbolic smoke ball was a consideration. The advertisement was not a boast in the abstract. In fact, it encompassed the majority of the key characteristics of a contract, specifically a Unilateral Contract. 

It was also stated that if the specific offer contains some conditions and fulfils the requirement, there is no need to accept that offer. Acceptance of the condition’s performance without notification is adequate. So, in this case, it was stated that fulfilling the terms of any offer constitutes acceptance and that communication of acceptance is unnecessary. Mrs. Carlill, the plaintiff got the reward of 1000 pounds.

Unilateral Contract

A unilateral contract is a contract where there is just a promise from one side and some performance is required from the other side. It’s a commitment made in return for specific activities. Advertisements and contracts are not the same things, but if an advertisement contains a clear promise to be legally bound, it can be considered a unilateral contract. In this case, the advertisement was not speculative and puffy. There was some thought given to the fact that the company would gain from the product’s sales and the fact that the company had deposited 1000 pounds in Alliance Bank as proof of payment honesty.

Communication of the acceptance of the offer, one of the essential elements of a valid offer, is defined under Section 4 of the Indian Contract Act, 1872 . However, an exception is made under Section 8 of the Indian Contract Act for a unilateral contract, which states that when the offeror proposes the world, acceptance may be made through the performance of few acts. In this particular case, Mrs. Carlill consumed the ball as per the given directions, i.e., 3 times a day for 2 weeks. Such an action determined her acceptance of the offer for the promise. Thus, the advertisement was constituted as a unilateral contract.

Impact on English Contract Law

This decision had an impact on English contract law, particularly on the concept of a unilateral contract, as businesses and advertising agencies have henceforth been more cautious about what they divulge to the general public. A thoughtless marketing strategy can result in significant financial losses for a firm, as they may be drawn into an unnecessary legal battle.

There are now various possibilities for unilateral contracts. For example, if a person/pet goes missing and their family/owner puts up a poster of their image and name on it, offering a reward for any pertinent information or the safe return of the missing person/pet, it can be considered a unilateral contract. It is an offer to the entire globe. Once the person or pet has been located, it is assumed that the offer has been accepted. As a result, the offeror is now obligated to fulfil his part of the bargain, which is to compensate the person who found the missing entity.

Similarly, if the police offer incentives to the general public in the event of anyone offering information that would aid the police in a criminal investigation, it will be considered a unilateral contract. As a result, the award money is payable in the event of any person fulfilling the condition(s).

Harbhajan Lal v. Harcharan Lal (1925)

The case focused on a young lad aged 14 or 15 years, who had run away from his father’s house. In this case, the boy’s father was the defendant. He distributed a brochure in which he declared: “Anyone who finds my son and returns him to me will receive Rs.500 as a reward.” Harbhajan Lal, the plaintiff, discovered him at the Bareilly junction train station and took him to Dharamshala police station, where he informed the defendant that he had found his son, through telegram. However, when the incentive was given, the boy’s father claimed that he had not received any acceptance and hence was not entitled to any of the offer’s rewards.

According to the Allahabad High Court, this proposition was made for the benefit of the entire world. As a result, anyone can accept this proposal, and the significance of acceptance is the fulfilment of the proposal’s requirements. In this case, the plaintiff had fulfilled the proposal’s criteria by tracking down the youngster and sending the telegram. Thus, he is eligible for the incentive.

The case of Carlill v. Carbolic Smoke Ball Co. established the concept of ‘Unilateral Contract’, which is widely recognized by English and Wales courts. In terms of notification of acceptance of offer and consideration, it held that unilateral transactions are an exception. The case granted remedy not only in commercial issues but also under other Acts such as the Consumer Protection Act. The UK’s Consumer Protection from Unfair Trading Regulations, 2008 play a key role in making misleading marketing illegal.

The commercial uncertainty caused by such a void in unilateral contracts has an impact on the concept of contract privity. As a result, this case has become a landmark in contract law. Overall, the decision was well-crafted; yet, the decision’s underlying ramifications have been a perennial source of controversy in business circles.

• https://blog.ipleaders.in/case-analysis-carlill-v-carbolic-smoke-ball-co/
• https://www.legalserviceindia.com/legal/article-5860-carlill-v-s-carbolic-smoke-ball-company.html
• https://www.livelaw.in/know-the-law/carlill-v-carbolic-smoke-ball-co-landmark-decision-amid-epidemic-154518#:~:text=a%20novel%20disease.-,One%20such%20attempt%20by%20a%20company%20during%20the%20influenza%20epidemic,Smoke%20Ball%20Co(1892).&text=The%20company%20claimed%20that%20a,Ball%20would%20never%20contract%20influenza .
• https://www.britannica.com/event/influenza-pandemic-of-1918-1919

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Carlill v Carbolic Smoke Ball Co: Fact Summary, Issues & Judgment

• Post author: Edeh Samuel Chukwuemeka ACMC
• Post published: March 28, 2022
• Post category: Scholarly Articles

Carlill v Carbolic Smoke Ball Co: This notable case forms an introductory part of contract law, offer, being the first requirement of a valid contract. The case establishes the principle that a binding offer can be made to the public and in such a case, acceptance need not be communicated as it goes contemporaneously with the performance of the offer so expressed.

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Table of Contents

Issues raised in Carlill v Carbolic Smoke Ball Co

a. Whether an offer made to the whole world can rise to a binding contract

Also see: Facts, Issues and decision of the court in Smith v Selwyn

Fact summary of Carlill v Carbolic Smoke Ball Co

The Defendants in this case are producers of smoke ball. They published an advert in a newspaper saying that they would award the sum of 100l to any person who used their smoke ball and contract Influenza. This was at the time when influenza was at its increase. On their smoke ball product was an imprint showing directives to be followed in using the smoke ball.

The directive specifies 3 times daily for 3 weeks; that if any person complies with this directive and contract influenza or cold related illness, Carbolic Smoke Ball Company would pay the person 100l as stated. The Defendant further stated in the advert that they had deposited the pledged 1000l with Alliance Bank thereby showing their honesty, transparency and readiness to fulfill the promise. They further pointed out how this carbolic smoke ball had been used by people in the previous influenza epidemic to prevent influenza and there was no report that the people who used the carbolic smoke ball contracted the disease.

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They further stated in the advert that the product was affordable, long lasting and capable of being refilled when exhausted. Then, they provided their company’s address in the newspaper advert. The Plaintiff, a lady, relying on the content of this advert purchased the carbolic smoke ball product from a chemist shop.

She then used the product as was provided in the company’s product directive imprinted on the smoke ball. She nevertheless contracted influenza. She then brought an action to this effect. The Counsel to the Defendant contended that a binding contract did not exist between the Plaintiff and the Defendant in the given circumstance. They further contended that the content of the advert was a mere declaration of intention and an invitation to threat and not a promise capable of establishing the existence of a valid offer.

They further argued that the expression in the advert is too wide and obscure to be capable of establishing a contract. Moreso, there was no certainty of time or a specified time frame for the occurrence or performance of the purported contract, and also that it could not possibly be verified as to whether any claimant or the claimant in this case actually used the smoke ball and contracted influenza, since any person who is infected with influenza could claim that he had contracted the influenza after using the product.

In fact, when the Plaintiff wrote to the company after contracting the influenza, the company rather invited her to come and use the smoke ball under their watch. The Defendant further contended that for a contract to arise there must be an acceptance duly communicated to the offeror. The act of the Plaintiff using the smoke ball which was done in private therefore could not have amounted to a valid acceptance.

The Defendants also based their contention for their non-liability on the fact that if at all a binding contract had arisen; it should only be with persons who had brought the smoke ball product directly from the company of which the Plaintiff had not. The defendant also argued that such setting should be safer interpreted to be a wager contract or which its occurrence was not in the control of the parties and therefore void, or it be interpreted to be an insurance policy of which the event in question was uncertain and therefore did not fulfill the requirement of a valid insurance policy.

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The Plaintiff on his own side argued that there was a valid contract between her and the Defendant. She contended that the requirement of a valid contract were met; that the publication made on the newspaper was a promise which amounts to a valid offer, since it was reasonable to believe that they were to act upon it and not a mere boast as was shown by their indicated overt act of depositing 1000l with Alliance Bank. Furthermore, that there was a valid acceptance on the side of the Plaintiff. Although the offer was not made to the Plaintiff specifically, it was rather an offer made to the whole world of which any person was free to accept by performing meeting with the specified condition. The acceptance need not be expressly communicated; rather, mere performance of the said offer was a complete acceptance. Since it was an offer to the whole world, the offeree need not give a notice to the office before its performance; that once the conditions are fulfilled, the acceptance is complete.

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Judgment of the court in Carlill v Carbolic Smoke Ball Co

The Queen’s Bench held in favour of the Plaintiff. Up to the Court of Appeal, the court considered all positions and held that from all indications, there existed a valid contract between the Defendant and the Plaintiff. The expression contained in the newspaper advertisement was clearly a promise to pay the sum of 100l to any victim of influenza who has used the smoke ball as directed. This was also validated by the Defendant’s act of depositing 1000l with Alliance Bank. This suggests an intention to fulfill the promise, therefore the Defendant’s act cannot be said to be a mere puff. Further, the promise gave rise to a binding contract.

There was clearly an offer, and what constitutes an acceptance was the performance of the conditions as stipulated to be fulfilled by the offer. It follows therefore that in such a public offer, the offeror could not be said to have anticipated any notice of acceptance asides the notice of its performance. The notice of acceptance therefore runs concurrently with that of performance of the contract.

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The offer being a continuing one and yet remains unrevoked, its performance amounts to a valid acceptance. The court further held that there was a valid consideration flowing from both parties. The 100l promise was clearly a consideration on the part of the Defendant whereas the Plaintiff’s act of purchase and use of the smoke ball in compliance with the directive was a valid consideration on her own part.

The court found in favour of the Plaintiff to the effect that there was a binding contract of which the Defendant was bound to perform.

Edeh Samuel Chukwuemeka, ACMC, is a lawyer and a certified mediator/conciliator in Nigeria. He is also a developer with knowledge in various programming languages. Samuel is determined to leverage his skills in technology, SEO, and legal practice to revolutionize the legal profession worldwide by creating web and mobile applications that simplify legal research. Sam is also passionate about educating and providing valuable information to people.

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CASE STUDY ON CARLILL v CARBOLIC SMOKE BALL CO.

Table of Contents

Carlill Vs Carbolic Smoke Ball Company [1892] EWCA Civ 1, [1893]1 QB 256

Lindley LJ,

And AL Smith LJ

This case looks at whether as a promoting contrivance (for example the guarantee to pay 100£ to anybody contracting flu while utilizing the Carbolic Smoke Ball) can be viewed as an express legally binding guarantee to pay.

Lindley, L.J., in the interest of the Court of Appeals, takes note of that the primary issue close by is whether the language in Defendant’s commercial, with respect to the 100£ prize, was intended to be an express guarantee or, rather, a business puff, which had no significance at all.

In this famous case, the defendant Carbolic smoke company made a product called a smoke ball, which they claim to cure influenza and some other diseases. The company advertises its product in some newspaper on November 13, 1891, claiming that they would pay £100 to anyone who after using their product according to the printed directions supplied by each ball gets sick with influenza or, any disease caused by taking cold. They even deposited £1000 with the Alliance Bank, Regent Street, showing their sincerity in the matter. The plaintiff Louisa Carlill, trusted in the exactness of the announcement made in the notice concerning the adequacy of the smoke ball in instances of flu and bought one packet and utilized as instructed however after certain days she had an assault of flu. Therefore, her husband wrote a letter on her behalf to the carbolic smoke company asking £100 which was promised in the newspaper. The lawyer representing Louisa Carlill argued the reliance of Louisa and the advertisement, so it was a contract between the company and the company ought to pay her. The lawyer representing the company argued that there was no serious contract between the parties.

CASES IN ARGUMENT:

Smith v Hughes (1871) LR 6 QB 597

Brogden v Metropolitan Rly Co (1876-77). LR 2 App Cas 666

 RESPONDENT’S ARGUMENT:

On request, the litigant’s case was that there was no coupling agreement between the gatherings. The respondent company had no methods for checking the ball, or of building up whether the offended party had in reality utilized the ball as coordinated. They additionally said that the offended party had not provided any consideration and that just doing a demonstration in private (for example adhering to guidelines) would not be sufficient. They contended, in the other option, that if the court saw there as an agreement, that agreement was close to a ‘wagering agreement’ in which obligation was simply decided on one issue – regardless of whether the offended party got flu or not – in which case it would be void, or that on the off chance that it was a protection strategy that it was ‘awful’ in light of the fact that it depended on whether there would be an event of a dubious occasion.

However, the court did not consider that the ‘wager’ or ‘insurance’ arguments were valid.

 JUDGEMENT:

The Court rejected the defendant’s appeal and ordered them to pay £100 to Louisa Carlill

The three judges gave the following reasons:

(1) That the advertisement in the newspaper was a unilateral offer to the entire world. So, anyone could accept that offer.

(2) The use of smoke balls as instructed constituted acceptance of the offer.

(3) That buying or only utilizing the smoke ball comprised good consideration, since it was a particular disservice brought about at the command of the organization and, besides, more individuals purchasing smoke balls by depending on the advert was a reasonable advantage to Carbolic.

(4) That the company showed reasonable intention to be legally binding by depositing £1000 in the bank

The judgments of the court were as follows.

Lord Justice Lindley

He excused the appeal. He, giving his decision first and reasons later, disclosed his judgment offering an explanation to all charges set up by the respondent’s guidance and maintaining the lower court’s choice. A portion which makes a quick work of the protection and betting agreement that was managed in the Queen’s Bench. Be that as it may, there is likewise another view to this point which Judge Lindley suitably attests: shouldn’t something be said about the individual who puts himself/herself in an inconvenient, if not adverse to his wellbeing, while at the same time breathing in powerful vapor of carbolic gas? So consequently there is sufficient thought to this guarantee.

Lord Justice Bowen

He agreed with Lindley, L.J. He was of a similar conclusion however he additionally talked about scarcely any focuses as for unclearness and timespan of the agreement. His opinion was more tightly structured in style and frequently cited. He, excusing defense’s council guarantee, depended on his development of the report and he said that there is no time limit fixed for getting flu, and it can’t truly be intended to vow to pay cash to an individual who gets flu whenever after the breathing in of the smoke ball.

Lord Justice AL Smith

His judgment was broad and agreed with both Lindley LJ and Bowen LJ’s choices. According to him, there were two considerations there. One is the consideration of the inconvenience of having to use this carbolic smoke ball for two weeks three times a day; and another more important consideration is the money gain likely to accrue to the defendants by the enhanced sale of the smoke balls, because of the plaintiff’s use of them. There is an ample consideration to support this promise.

SIGNIFICANCE:

The Carlill case played a  huge role in building up the law of unilateral offers and established the framework for the advanced act of banning misdirecting promoting. Carlill is referred to as the main case in the precedent-based law of agreement, especially where unilateral contracts are concerned. This is maybe because of the technique of Counsel for the Defendant in running pretty much every accessible safeguard, requiring the court to manage these focuses thus in the judgment.

The impacts of this judgment despite everything still felt today. It gives a superb study of the essential standards of agreement and how they identify with regular day to day existence. The case stays a great law. It despite everything ties the lower courts of England and Wales and is referred to by decided with endorsement. Nonetheless, notwithstanding the authoritative cure stood to clients, similar realities would offer ascent to some of extra-legal cures and disciplines were a person to put an advert in similar terms today.

Author: Sanidhya Pateriya, School of Law, Jagran Lakecity University/ 1st year

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