Carlill .v. Carbolic Smoke Ball Company [ Case Comment]
Carlill .v. Carbolic Smoke Ball Company*, though has been decided before a century, is still in relevance. It still stands as good authority for the doctrines of offer, acceptance, consideration, misrepresentation, and wagering, which are all vital elements of a contract. In the UK, around 1889-1890, there was a spread of influenza pandemic which killed over 1 million people. Meanwhile, the Carbolic smoke ball Company has introduced a product called “Carbolic Smoke Ball” in a newspaper advertising as a remedy to prevent influenza, the ball is filled with carbolic acid, one who used the product have to insert it in nostrils and press the rubber ball so that the gas enters into the respiratory tract and kill viruses. The Company also offered a reward to anyone who caught influenza even after the usage of the Smoke Ball.
In 1891, the Carbolic smoke ball company (defendant) published advertisements in Pall mall gazettes and many other newspapers regarding the “Carbolic Smoke Ball”. The company instructed to use this three times two weeks to prevent influenza. Also, stated that if any person contracts influenza after using this product will be rewarded with 100£. The company to prove this deposited 1000£ in Alliance bank, Regent-street to show its originality towards the advertisement. Based on this, many products were sold because it is considered as the cheapest remedy to prevent influenza. One carbolic smoke ball will last several months. Also, the company stated the ball can be refilled with carbolic acid. The address for the same was “Carbolic Smoke Ball Company, “27, Princes Street, Hanover Square, London.” The plaintiff Louisa Carlill strongly believed in the statement of advertisement and purchased “smoke ball” and used it as per the directions from the middle of 20th November 1891 - 17th January 1892. Later, she contracted influenza. Her husband John, a solicitor, wrote a letter to the defendants to give the promised reward of 100£. The defendant refused and the matter went to the Court. After hearing the arguments from both sides, the judgment was pronounced by Hon'ble Hawkins.J and a special jury in favor of the plaintiff (Louisa Carlill). Although two highly technical defenses were raised under the Gaming Act and the Insurance Act, these were dismissed as being without merit. The defendants went for an appeal.
Whether there is a binding contract between the parties?
Did Louisa Carlill notify her acceptance of the offer made by the company?
Did Mrs.Carlill provide consideration in exchange for the reward of 100£?
Whether the reward of 100£ is merely a sales puff and invitation to treat or gimmick?
The plaintiff argued that it is a binding contract and not merely a sales puff. The advertisement was an offer with some conditions to fulfill, which was published in a newspaper and was read and acted upon by many people. Therefore, it is not an empty boast. Also, 1000£ deposited in Alliance bank to show the sincerity in the matter, which gives rise to the legal binding to the contract.
The defendant argued that there was no binding contract because the words in the advertisement are vague and did not amount to promise. The advertisement will not amount to a contract as there was no communication and acceptance of the offer. Also, a person may claim the reward 10 years after using the remedy and there was no time limit. Moreover, it is not seen directly whether people use Smoke balls or not. They argued that the advertisement is merely a sales puff and would not amount to a contract.
Hon'ble Lindley L.J held that the advertisement was an express promise which stated that whoever uses the smoke balls as per the instructions, i.e 3 times for 2 weeks, and contracts influenza will be rewarded 100£. The advertisement was not a mere puff because the defendant deposited 1000£ in Alliance bank to gain the trust of the people by showing it’s sincerity. The advertisement is not vague and it had a time limit. Notice of performance does not precede the performance and it is a continuing offer. There was a consideration in this case, for two reasons; firstly, the sales directly benefited them by selling more carbolic smoke balls by making an advertisement in a newspaper, and secondly, the performance of the specified conditions to use the smoke balls is a consideration for the promise.
Hon'ble Bowen L, J. held that the contract is not too vague to be enforced because the deposit of 1000£ in Alliance bank gives rise to the legality of the contract. A contract can be made toward the whole world, and it is a unilateral contract where communication of acceptance and intimation of the same is not necessary, anybody who comes forward to perform the conditions will ripen into a contract. Therefore, there is no need for acceptance of the offer. Consideration is the use of the smoke ball and the reason for buying smoke balls itself promotes the sale.
Hon'ble Smith L, J. also decided on the same basis as Hon'ble Bowen L, J.
Comment on the Case
Mrs Carlill had encountered this trouble overspending on ten shillings. Indeed, it would be hard to picture Carbolic faced with a lawsuit, refusing to give her money back. But because of the unusual phrasing of Carbolic's advertisement, the argument was not over ten shillings but £100-a sum which could seriously eat into a company's profits and at the same time, make a lawsuit worth the effort. The £100 was important not only because it represented a prize worth litigating over, but because it was seen by the court as a specific offer, an offer clear enough to constitute one-half of the elements needed for the first requirement of a contract: an agreement. In essence, a legal decision supporting the defendant’s arguments would only serve to encourage admitting of more outrageous falses. Advertisers could attempt with the impunity to trap consumers with progressively bigger lies and avoid their liability.
Under that plain meaning, Carbolic offered to pay £100 to anyone who inhaled its medicinal spray three times a day but still contracted influenza. The fact that the ad announced further that money had been providently set aside ("£1,000 IS DEPOSITED with the ALLIANCE BANK, Regent Street, showing our sincerity in this matter") put a nail in Carbolic's legal coffin. The Court stated that just because it was not a traditional bilateral contract, means to make it a nothing legal. Instead, it constituted a different type of contract, a unilateral contract.
All elements in the Plaintiff’s favor being satisfied, Louisa Carlill received her £100 and her case was written up as legal precedent.
*Citation: 1 Q.B. 256 (Court of Appeal 1893)
Plaintiff: Louisa Carlill
Defendant: Carbolic Smoke Ball Company
Judges: Hon'ble Lindley L.J, Hon'ble Bowen LJ and Hon'ble AL Smith LJ
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