Carlill v. Carbolic Smoke Ball Company
Rule established
An advertisement can constitute a binding unilateral offer to the world at large, accepted by performance of its stated conditions; consideration exists in the inconvenience of performance.
Facts
- The Carbolic Smoke Ball Company published a newspaper advertisement offering £100 to anyone who caught influenza after using their smoke ball three times daily for two weeks as directed
- The company deposited £1,000 in the Alliance Bank to show their sincerity
- Mrs. Carlill purchased and used the smoke ball as directed for the stated period
- She contracted influenza and claimed the £100 reward
- The company refused payment, arguing: (1) the ad was mere puff, (2) offer cannot be made to the world, (3) no acceptance was communicated, (4) no consideration from Mrs. Carlill
Issues
- Whether an advertisement can constitute a valid offer capable of acceptance?
- Whether an offer can be made to the world at large?
- Whether acceptance of a unilateral offer requires communication, or is performance sufficient?
- Whether Mrs. Carlill provided valid consideration?
Held
- The advertisement was not mere puff; the deposit of £1,000 demonstrated serious intention (Bowen LJ)
- An offer can be made to the world at large; it is addressed to anyone who performs the conditions (Lindley LJ)
- In unilateral contracts, acceptance is by performance of the stipulated conditions; no prior communication of acceptance is required (Bowen LJ)
- Consideration existed in the inconvenience sustained by Mrs. Carlill in using the product as directed, and in the benefit to the company from increased sales (Bowen LJ)
- Mrs. Carlill was entitled to the £100
Ratio Decidendi
An advertisement containing definite terms of a reward, coupled with evidence of sincerity (such as depositing money in a bank), constitutes a valid unilateral offer to the world at large. Such an offer is accepted by any person who performs the conditions stated in the offer; no separate communication of acceptance is necessary. The inconvenience of performing the stated conditions constitutes valid consideration.
How to use it in an exam
- Part A: Define unilateral contract / offer to the world / acceptance by performance. Carlill is the defining case for all three.
- Part B: Discuss formation of contract and whether advertisements are offers or invitations to treat.
- Part C: Problem questions involving reward advertisements, promotional offers, guarantees.
- Key line: "An offer can be made to the world at large, which is to ripen into a contract with anybody who comes forward and performs the condition." (Bowen LJ)
Source
Source: [1893] 1 QB 256
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.