Carlill v. Carbolic Smoke Ball Co.

Facts

During the 1891-92 influenza epidemic the company advertised that it would pay £100 to anyone who used its smoke ball as directed and still caught influenza, and stated it had deposited £1000 with a bank to show sincerity. Mrs Carlill bought a ball, used it as directed for two months, and still contracted influenza. The company refused to pay, calling the advertisement a mere puff.

Issues

• Was the advertisement an offer capable of acceptance, or a vague puff/invitation to offer?
• Could an offer to the world at large be accepted without prior communication of acceptance, and was there consideration?

Arguments

Carlill argued the advertisement, especially the bank deposit, showed a definite promise she accepted by using the ball as directed. The company argued the advertisement was too vague to be an offer, that acceptance was never communicated, and that there was no consideration or intention to be legally bound.

Held

The court held the advertisement was a genuine offer to the world at large, made binding by the deposit of £1000 evidencing intent to create legal relations. Where an offer invites acceptance by performance of a condition, notification of acceptance in advance is dispensed with; performing the condition is itself acceptance. Consideration lay both in the inconvenience of using the ball as directed and in the boost to the company's sales, so a complete contract arose and the £100 was payable.

Ratio decidendi

A unilateral/general offer addressed to the public is accepted by the offeree performing the prescribed conditions, and in such offers express communication of acceptance is not required; using the product as directed supplies the consideration.

Significance

The foundational case on general (unilateral) offers, acceptance by conduct, and intention to create legal relations; relied on across common-law jurisdictions and reflected in Indian law in cases like Lalman Shukla v. Gauri Dutt and Har Bhajan Lal v. Charan Lal.

Related