Carlill v Carbolic Smoke Ball Co

Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 is an English contract law
decision by the Court of Appeal. It is notable for its curious subject matter and how the
influential judges (particularly Lindley LJ and Bowen LJ) developed the law in inventive
ways. Carlill is frequently discussed as an introductory contract case, and may often be the
first legal case a law student studies.
A medical firm advertised that its new wonder drug, a smoke ball, would cure people's flu,
and if it did not, buyers would receive £100. When sued, Carbolic argued the ad was not to
be taken as a serious, legally binding offer. It was merely an invitation to treat, and a
gimmick. But the court of appeal held that it would appear to a reasonable man that Carbolic
had made a serious offer. People had given good "consideration" for it by going to the
"distinct inconvenience" of using a faulty product.

Case Facts
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
The company made a product called “Smoke Ball". It claimed to be a cure to influenza and
many other diseases, in the context 1889-1890: Flu pandemic which is estimated to have
killed 1 million people. The smoke ball was a rubber ball with a tube fixed to its opening.
The ball is filled with Carbolic acid (Phenol). The tube is supposed to be inserted in one of
your nostrils and the bottom part of the rubber ball is to be pressed. The gas enters your
respiratory tract and flushes out al the viruses.
Advertisement:
The Company published advertisements in the Pall Mall Gazette and other newspapers on
November 13, 1891, claiming that it would pay £100 to anyone who got sick with influenza
after using its product according to the instructions set out in the advertisement.
“£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts
the increasing epidemic influenza colds, or any disease caused by taking cold, 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, Regent Street, showing our
sincerity in the matter. During the last epidemic of influenza many thousand carbolic smoke
balls were sold as preventives against this disease, and in no ascertained case was the disease
contracted by those using the carbolic smoke ball. One carbolic smoke ball will last a family
several months, making it the cheapest remedy in the world at the price, 10s post free. The
ball can be refilled at a cost of 5s. Address: “Carbolic Smoke Ball Company, “27, Princes
Street, Hanover Square, London."
Plaintiff:
Louisa Carlill
She, believing in the accuracy of the statement made in the advertisement with respect to
efficacy of the smoke ball in cases of influenza, purchased one packet and used it thrice
everyday from mid November, 1891 until 17th Jan, 1892, at which latter date she had an
attack of influenza.
Thereupon, her husband wrote a letter for her to the defendants, stating what had happened,
and asking for £100 as promised in the advertisement. They refused and this action was
brought in court before Hawkins J. and a special jury. Arguments were heard on both the
sides and finally the verdict was given in favor of Mrs. Carlill.
The defendants appealed.

Judgments
The Court of Appeal unanimously rejected the company's arguments and held that there was
a fully binding contract for £100 with Mrs. Carlill
Among the reasons given by the three judges were
(1) That the advertisement was a unilateral offer to the entire world
(2) The satisfying conditions for using the smoke ball constituted acceptance of the offer.
(3) That purchasing or merely using the smoke ball constituted good consideration, because
it was a distinct detriment incurred at the behest of the company and, furthermore, more
people buying smoke balls by relying on the advert was a clear benefit to Carbolic
(4) That the company's claim that £1000 was deposited at the Alliance Bank showed the
serious intention to be legally bound.
The judgments of the court were as follows.
Lindley.L.J:
He dismissed the appeal. He, giving his decision first and reasons later, explained his
judgment answering to all allegations put up by the defendant’s counsel and upholding the
lower court’s decision. An excerpt which makes a short shrift of the insurance and wagering
contract that were dealt with in the Queen’s Bench
“I will begin by referring to two points which were raised in the Court below. I refer to them
simply for the purpose of dismissing them. First, it is said no action will lie upon this
contract because it is a policy. You have only to look at the advertisement to dismiss that
suggestion. Then it was said that it is a bet. Hawkins, J., came to the conclusion that nobody
ever dreamt of a bet, and that the transaction had nothing whatever in common with a bet. I
so entirely agree with him that I pass over this contention also as not worth serious attention.

This law essay is an example of a student's work

Then, what is left? The first observation I will make is that we are not dealing with any
inference of fact. We are dealing with an express promise to pay 100£ in certain events. Read
the advertisement how you will, and twist it about as you will, here is a distinct promise
expressed in language which is perfectly unmistakable —
“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."
He discussed the following issues with respect to this case:
The advertisement was not a “mere puff" as had been alleged by the defendant. The very fact
that £1000 was deposited with Alliance Bank, Regent Street. So what is that money for?
What is that passage put in for, except to negative the suggestion that this is a mere puff, and
means nothing at all? The deposit is called in aid by the advertisers as proof of their sincerity
in the matter. What do they mean?-The advertisement definitely means seriousness.
The advertisement was an offer to the world. It was contended that it is not binding. It is said
that it is not made with anybody in particular. In point of law this advertisement is an offer to
pay 100ℓ to anybody who will perform these conditions, and the performance of the
conditions is the acceptance of the offer.
Communication of acceptance is not necessary for a contract when people's conduct
manifests an intention to contract. But then the defense council put forth a point “Supposing
that the performance of the conditions is an acceptance of the offer, that acceptance ought to
have been notified." Unquestionably, as a general proposition, when an offer is made, it is
necessary in order to make a binding contract, not only that it should be accepted, but that the
acceptance should be notified. But in cases of this kind, it is apprehended that they are an
exception to the rule that the notification of the acceptance need not precede the
performance. This offer is a continuing offer. It was never revoked, and if notice of
acceptance is required, then the person who makes the offer gets the notice of acceptance
contemporaneously with his notice of the performance of the condition before his offer is
revoked.
The defense counsel has argued that this advertisement is a nudum pactum – that there is no
consideration. They say “it is of no advantage to them how much the ball is used". The
judged answered “The answer to that I think is this. It is quite obvious that, in the view of the
defendants, the advertisers, a use of the smoke balls by the public, if they can get the public
to have confidence enough to use them, will react and produce a sale which is directly
beneficial to them, the defendants. Therefore, it appears to me that out of this transaction
emerges an advantage to them which is enough to constitute a consideration." But there is
also another view to this point which the Judge Lindley aptly asserts: what about the person
who puts himself/ herself in an inconvenient, if not detrimental to his health, while inhaling
potent fumes of carbolic gas? So therefore there is ample consideration to this promise.
Bowen, L.J:
He concurred with Lindley, L.J. He was of the same opinion but he also discussed few points
with respect to vagueness and time period of the contract. His opinion was more tightly
structured in style and frequently cited.
In response to Defense’s council point that this contract is too vague to be enforced. He,
dismissing their claim, relied on his construction of the document and he said that there is no
time limit fixed for catching influenza, and it cannot seriously be meant to promise to pay
money to a person who catches influenza at any time after the inhaling of the smoke ball.
There is also great vagueness in the limitation of the persons with whom the contract was
intended to be made. But this document was intended to be issued to the public and to be
read by public. So it is very important to understand how would a commoner interpret this
advertisement? And the effect of this advertisement was to attract people and make them use
it, which would amount to more sales, thus more profit. Based on this intention to promote
the distribution of the smoke balls and to increase its usage, the advertisement was accepted
as a contract addressing public at large but limited to those people who are using it either for
prevention or treatment of influenza and other mentioned diseases.
Another point which was discussed in the court was that of the time limit of the contract.
How do you define reasonable time period? And after great discussion, the respected judge
came to a conclusion that the protection warranted by the contract was to last during the
epidemic (1889-90 Flu epidemic).If so, it was during this epidemic that the plaintiff
contracted this disease. So the contract holds.
A.L.Smith, L.J:
His judgment was more general and concurred with both Lindley LJ and Bowen LJ's
decisions.

Aftermath
The appeal was dismissed unanimously by all the three judges and Mrs. Carlill finally
received compensation of £100. She lived to the ripe old age of 96. She died on March 10,
1942; according to her doctor principally of old age. There was one cause noted though:
Influenza.
Mr. Roe, owner of Carbolic Smoke ball Co., continued with his aggressive marketing. This
time he increased the reward to £200 following the loss of the case.

Conclusion
This is the most frequently cited case in the common law of contract, particularly where
unilateral contracts are concerned. It provides an excellent study of the basic principles of
contract and how they relate to every day life. Essential elements of contract including Offer
& Acceptance, Consideration, Intention to create Legal Relations, etc. were mentioned in this
case. This case forms the foundation for Contract Law

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