In Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, the Court of Appeal held a company to a promise it had made in a newspaper advert. The company had offered £100 to anyone who used its smoke ball as directed and still caught influenza. Mrs Carlill did exactly that. The central question was whether the advert gave her a contractual right to the £100. The court held that it did.
The facts
The Carbolic Smoke Ball Company promoted its product as a preventive remedy. On 13 November 1891, it advertised in the Pall Mall Gazette and other newspapers. It promised £100 to anyone who contracted influenza, a cold or a disease caused by taking cold after using the smoke ball three times a day for two weeks according to the printed directions. The advert also announced that the company had deposited £1,000 with the Alliance Bank on Regent Street, ‘shewing our sincerity in the matter’.
Mrs Carlill bought a smoke ball from a chemist in reliance on the advert. She used it as directed from 20 November 1891 until 17 January 1892, when she caught influenza while still using it. She claimed the £100, and the company refused to pay. Its case on appeal was that the advert created no binding obligation. It argued that the terms were too vague, that it had received no advance notice that would let it supervise her use of the ball, and that Mrs Carlill had given no consideration.
The decision
Hawkins J held at first instance that Mrs Carlill could recover the £100. On 7 December 1892, Lindley LJ, Bowen LJ and A L Smith LJ unanimously dismissed the company’s appeal. The judgment was reported in 1893, which accounts for the year in the law report citation.
Why the advert amounted to an offer
Lindley LJ began with the express promise to pay a fixed sum if specified events occurred. He treated the statement about the £1,000 deposit as evidence that the company meant the promise seriously. By drawing attention to money lodged with a named bank, the company had given readers a reason to take the reward as a real commitment. Bowen LJ approached the advert as an ordinary member of the public would read it. Its terms invited people to act on the promise by using the product as directed. Bowen LJ distinguished this promise from a notice that books were for sale or that a house was to let. Those notices invite people to make offers or begin negotiations. Here, the company had already specified what it would pay and what a reader had to do to qualify.
The company argued that the promise was too vague because the advert did not say how soon a user had to fall ill. Lindley LJ favoured reading it as covering illness within a reasonable time after the prescribed use. Bowen LJ preferred a reading that covered illness while the user was still using the ball, and also considered a reading tied to the duration of the epidemic. A L Smith LJ identified all three possible readings and saw no need to choose between them. Mrs Carlill had completed the prescribed fortnight and fallen ill while she was still using the ball during the epidemic, so she qualified under each reading.
How Mrs Carlill accepted the offer
Bowen LJ explained that an offer can be addressed to the public at large. The person who acts on it and performs its conditions becomes the contracting party. In this case the act the company requested was use of the smoke ball in the prescribed way. Mrs Carlill’s use supplied acceptance by performance, and her subsequent illness within the period covered by the promise triggered her entitlement to the reward.
Acceptance ordinarily has to be communicated to the offeror. Bowen LJ explained that an offeror can dispense with that requirement expressly or by implication. The wording and nature of this reward offer implied that performance would suffice. A L Smith LJ also pointed out that the advert contained no requirement to give advance notice so the company could supervise use. Lindley LJ doubted that a separate notice of acceptance was required and added that, even if notice were needed, it could accompany notice of performance. Mrs Carlill’s later demand for £100 was a claim for payment based on what had already happened.
What counted as consideration?
Consideration is what a person gives or does in exchange for a contractual promise. Mrs Carlill had taken the trouble to use the ball three times daily for a fortnight at the company’s request. Lindley LJ regarded that inconvenience as sufficient consideration. He also reasoned that encouraging public use could build confidence and increase sales, giving the company a commercial benefit.
Bowen LJ likewise treated the inconvenience of using the ball as sufficient and saw an indirect benefit to the company in the prospect of more sales. He noted that the advert was directed at use of the ball and that users could obtain it without buying directly from the company. A L Smith LJ relied on both the inconvenience and the likely increase in sales, giving greater weight to the latter. The prescribed use did two jobs in the court’s reasoning. It was the conduct invited as acceptance and the consideration supporting the company’s promise. Catching influenza was the event that made the reward payable.
Why the case matters for contract law
Carlill is a leading example of a unilateral contract. The company made a conditional promise. A reader could choose whether to act on it, and acceptance took the form of carrying out the requested act. For a problem question about a reward advert, start with its exact wording. Ask what the advertiser commits to, what the reader must do to accept, and what must happen before payment falls due. In Carlill, the fixed sum, the detailed directions for use and the reference to the bank deposit gave the court concrete reasons to enforce this particular promise.
References
- Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 (CA). Facts and arguments at 256–261. Lindley LJ at 261–265, Bowen LJ at 265–272 and A L Smith LJ at 272–275. Law Reports scan hosted by Trier University
- Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484 (QBD), first-instance judgment of Hawkins J. Judgment transcript