Carlil v carbolic smoke ball co

A landmark case which proves that an advertisement can sometimes amounting to an offer and not necessarily be treated as an invitation to treat.

1. CASE : CARLILL V CARBOLIC SMOKE BALL Prepared by : NUR FARHANA BINTI MAZLAN NUR HAZIQAH BINTI MOHD ZALIZAN RAJA NURAISYAH NATASYA BINTI RAJA KAMARUZAMAN BUS 326-BUSINESS LAW

2. HISTORY ABOUT THE CASE : - Carlill V Carbolic Smoke Ball Company (1893) is an English contract law decision by the Court of Appeal, which held an advertisement containing certain terms to get a reward constituted a binding unilateral offer that could be accepted by anyone who performed its terms. -It is notable for its curious subject matter and how the influential judges (particularly Lindley L J and Brown L J) developed the law in inventive ways. - Carlillis frequently discussed as an introductory contract case, and may often be the first legal case a law student studies in the law of contract.

3. -The case concerned a flu remedy called the “carbolic smoke ball”. The manufacturer advertised that buyers who found it did not work would be awarded £100, a considerable amount of money at the time. The company was found to have been bound by its advertisement, which was construed as an offer which the buyer, by using the smoke ball, accepted, creating a contract. -The Court of Appeal held the essential elements of a contract were all present, including offer and acceptance, consideration and an intention to create legal relations.

4. FACTS OF THE CASE : The case of Carlill v Carbolic Smoke Ball is one of the most important cases in English legal history. In essence it defined what it is to create an ‘offer’ in an advertisement, and how a member of the public successfully argued that they had ‘accepted’ the offer and performed under the terms of the advertisement (contract.) FACTS OF THE CASE : The Carbolic Smoke Ball Company advertised in the Pall Mall Gazette in 1891 that their Carbolic Smoke Ball was a cure for flu, bronchitis, coughs, colds, headaches, hay-fever, whooping cough, laryngitis and sore throats amongst others. It was so confident of the usefulness of the carbolic smoke ball, and its ability not only to cure but also to prevent someone from getting the ‘flu, that it advertised on the following basis: Anyone who used the carbolic smoke ball in a particular way for a specified period of time, but who still caught influenza afterwards, would be entitled to claim £100 from the company. The advertisement went on to say that the company had gone so far as to deposit £1000 in the Alliance Bank in the event of any such claims. The plaintiff (who nowadays would be called the ‘claimant’) saw the advertisement and decided to buy one of the carbolic smoke balls. She used it exactly as advised, but still caught influenza. She took the Carbolic Smoke Ball Company to court in order to claim her £100. The court found in her favour, but the defendants appealed.

5. THE ADVERTISEMENT

6. ISSUES & RULES ABOUT THE CASE : ISSUE OF THE CASE: - Does one who makes a unilateral offer for the sale of goods by means of an advertisement impliedly waive notification of acceptance, if his purpose is to sell as much product as possible?

7. RULES OF THE CASE: Holding and Rule (Lindley) Yes. One who makes a unilateral offer for the sale of goods by means of an advertisement impliedly waives notification of acceptance if his purpose is to sell as much product as possible. The court held that a person who makes an offer may decline to require notice of acceptance if he or she wishes. One who makes an offer dispenses with the requirement of notice of acceptance if the form of the offer shows that notice of acceptance is not required. To accept an offer, a person need only follow the indicated method of acceptance. If the offered either expressly or impliedly intimates in his offer that it will be sufficient to act without giving notice of acceptance, performance is sufficient acceptance without notification. The court held that an advertisement is considered to be an offer when it specifies the quantity of persons who are eligible to accept its terms. If such an advertisement requires performance, the offered is not required to give notice of his performance. The court addressed the issue of whether the ad was intended to be a promise or whether it was merely “puffing”. The court pointed to Carbolic Smoke Ball’s claim in the advertisement that it had deposited 1000 pounds with Alliance Bank, which the court decided was intended to demonstrate the company’s sincerity in paying the reward.

8. A Newspaper advert placed by the defendant stated:- £100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the influenza after having used the ball three times daily for two weeks according to the printed directions supplied with each ball. £1000 is deposited with the Alliance Bank, shewing our sincerity in the matter." Mrs Carlill purchased some smoke balls and used them according to the directions and caught flu. She sought to claim the stated £100 reward. The defendant raised the following arguments to demonstrate the advertisement was a mere invitation to treat rather than an offer:  1. The advert was a sales puff and lacked intent to be an offer. 2. It is not possible to make an offer to the world. 3. There was no notification of acceptance. 4. The wording was too vague to constitute an offer since there was no stated time limit as to catching the flu. 5. There was no consideration provided since the 'offer' did not specify that the user of the balls must have purchased them.  COURT DECISION :

9. Held: The Court of Appeal held that Mrs Carlill was entitled to the reward as the advert constituted an offer of a unilateral contract which she had accepted by performing the conditions stated in the offer. The court rejected all the arguments put forward by the defendants for the following reasons: 1. The statement referring to the deposit of £1,000 demonstrated intent and therefore it was not a mere sales puff. 2. It is quite possible to make an offer to the world. 3. In unilateral contracts there is no requirement that the offeree communicates an intention to accept, since acceptance is through full performance. 4. Whilst there may be some ambiguity in the wording this was capable of being resolved by applying a reasonable time limit or confiningit to only those who caught flu whilst still using the balls. 5. The defendants would have value in people using the balls even if they had not been purchased by them directly.  

10. THANK YOU

11. VIDEO CARLIL V CARLIL