Carlill v Carbolic Smoke Ball Co

Carlill v Carbolic Smoke Ball Co (1892 EWCA Civ 1) is a landmark English contract law case that dealt with the enforceability of unilateral offers. The case established important precedents regarding contract formation, consideration, and the intention to create legal relations in the context of advertisements and unilateral offers.

Background

The Carbolic Smoke Ball Company (the defendant) placed an advertisement in several newspapers, claiming that their product, the "Carbolic Smoke Ball", was a preventive measure against influenza and a number of other diseases. The advertisement offered £100 to any user who contracted influenza after using the smoke ball according to the instructions provided. It also stated that £1000 was deposited with the Alliance Bank to show the company's sincerity in the matter.

Mrs. Louisa Carlill (the plaintiff) purchased a smoke ball and used it as directed. Despite this, she contracted influenza. When she claimed the £100 reward, the Carbolic Smoke Ball Company refused to pay. Mrs. Carlill brought an action against the company.

Judgment

The Court of Appeal of England and Wales held in favor of Mrs. Carlill, establishing that the advertisement constituted a unilateral offer to the world at large, which was accepted by anyone who performed the condition (using the smoke ball as directed). The court found that the use of the smoke ball constituted good consideration because it was a detriment incurred at the request of the company.

The court also dismissed the company's arguments that the advertisement was a mere sales puff and that no contract was formed because there was no intention to create legal relations. The deposit of money into a bank was viewed as evidence of the company's intention to be legally bound.

Significance

Carlill v Carbolic Smoke Ball Co is a seminal case in English contract law and is often cited as a leading case on unilateral contracts. It clarified the law regarding advertisements and offers, demonstrating that an offer can be made to the world at large, and that such offers can be accepted by performing the conditions stated in the offer.

The case is also significant for its discussions on consideration and the intention to create legal relations, two fundamental concepts in contract law. It established that performing an act can constitute consideration, and that commercial advertisements can indeed form the basis of a binding contract if they include a clear promise and demonstrate an intention to be legally bound.

See Also

• Consideration in English law
• Intention to create legal relations
• Unilateral contract
• Advertisement law