Carlill v Carbolic Smoke Ball Co. case PDF

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Carlill v Carbolic Smoke Ball Co, 1892 WL 9612 (1892)

Carlill v Carbolic Smoke Ball Co Positive/Neutral Judicial Consideration

Court Court of Appeal Judgment Date 7 December 1892 Where Reported [1893] 1 Q.B. 256 [1892] 12 WLUK 16 Subject Contracts Other related subjects Commercial law Keywords Advertisements; Conditional offers; Consideration; Inconvenience; Notice; Offer and acceptance; Performance; Unilateral contracts Judge Lindley LJ; Bowen LJ; AL Smith LJ Counsel For the appellant: Mr Finlay QC, T Terrell. For the respondent: Mr Dickens QC, WB Allen. Solicitor For the appellant: Field & Roscoe. For the respondent: J Banks Pittman.

Case Digest Summary An advertisement amounted to an offer to the world which could be accepted by anyone who performed the conditions set out in it. The claimant did not have to notify the advertiser of her intention to accept the offer prior to her performance of the conditions.

Abstract The appellant company (B) appealed against a decision that it was liable for a claim for damages brought by the respondent (C). B was the manufacturer of a medical preparation called the carbolic smoke ball, which was designed to prevent the user from contracting flu. B placed an advertisement in newspapers which stated that a reward of £100 would be paid to anyone who contracted flu or a cold after using the smoke ball three times per day for two weeks according to the directions supplied with each ball. The advertisement further stated that B had deposited £1,000 with a named bank to show the sincerity of its offer. C purchased a ball in reliance on B's advert and used it as directed but contracted flu whilst using it. B argued that its advertisement did not amount to a contractually binding promise as it was addressed to the world in general, it was too vague, and was not limited by time. B further argued that if the advert was an offer, C had not communicated her intention to accept it.

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Carlill v Carbolic Smoke Ball Co, 1892 WL 9612 (1892)

Held Appeal dismissed. (1) The advertisement stated that £1,000 was lodged at a bank. Therefore it could not be said that the statement that £100 would be paid was intended to be mere puff. It was an offer made to all the world, but there was no reason why an offer should not be made to all the world which was to ripen into a contract when anyone came forward and performed the condition required, Spencer v Harding (1869-70) L.R. 5 C.P. 561, [1870] 6 WLUK 152 considered. (2) Generally, when an offer was made, in order to make a binding contract it was necessary not only that it was accepted but that the acceptance was notified. However, the instant case was an exception to that rule; the notification of acceptance did not have to precede the performance. The person who made the offer could dispense with notice if he thought it desirable to do so. B had shown by its language and from the nature of the transaction that it did not expect and did not require notice of acceptance, apart from notice of the performance. Anyone who performed the conditions set out in the advertisement had accepted the offer, Williams v Carwardine 110 E.R. 590, [1833] 4 WLUK 26 and Brogden v Metropolitan Railway Co (1877) 2 App. Cas. 666, [1877] 7 WLUK 52 applied. The advertisement therefore contained all of the necessary elements to form a binding contract enforceable in law, save for two potential problems: firstly, it was not limited by time, and secondly the question of consideration. (3) A reasonable person would not understand B's advertisement to mean that if a person used a smoke ball three times daily for two weeks they were guaranteed against contracting flu for the rest of their life. There were a number of reasonable constructions to be put on the advertisement but the preferred construction was that the reward was offered to any person who contracted flu in the current epidemic within a reasonable time after having used the smoke ball, or whilst using the ball. (4) A use by the public of the smoke ball as a result of the advertisement was directly beneficial to B. Therefore, B received an advantage which was enough to constitute a consideration. In addition, inconvenience sustained by one party at the request of the other was enough to create a consideration, Gerhard v Bates 118 E.R. 845, [1853] 6 WLUK 13 considered. The person who acted upon the advertisement put himself to some inconvenience at B's request. That was ample consideration for B's promise.

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