CARLILL V. CARBOLIC SMOKE BALL COMPANY (1892) 1 QB 256
| CITATION | 1892 EWCA CIV 1 |
| YEAR | 7 DEC. 1892 |
| COURT | COURT OF APPEAL |
| CASE TYPE | UNILATERAL CONTRACT |
| BENCH | J.LINDLEY,BOWEN,AL SMITH |
| COUNTRY | BRITAIN |
FACTS OF THE CASE
The carbolic smoke ball company came up with a new advertising strategy that would require the company to advertise that their carbolic smoke ball was a definite panacea for influenza , hay-fever, coughs and colds,headaches,bronchitis,and any other sore throat related troubles.
The company was, in fact very confident of their product. They also claimed that the carbolic smoke ball not only possesses the ability to cure influenza but also prevent users from getting any type of common flu. However, the main crux of their advertisement was that the company stated that any person who catches a cold or gets affected by influenza even after using their products ; such a person will be entitled to claim 100 pound from the company provided that the product has been used for a certain specified period of time. The company also stated that it had also gone as far as deposit 1000 pounds in a certain alliance bank.
ISSUES RAISED
- Whether there was any binding effect of the contract between the parties ?
- Whether the contract in question required a formal notifications of acceptace.
- Whether mrs carlill was required to communicate her acceptance of the offer to the carbolic smoke ball company.
ARGUMENTS OF THE PARTIES
DEFENDANTS : The carbolic smoke ball company argued that their offer didn’t have a binding impact in order to form a valid contract. Their reasoning was that words used in the advertisement was too vague in its terms to form a contract.
Secondly, they argued that their was no specified limit as to time and there was no means of checking as to how the smoke ball was being utilized by the consumers.
PLAINTIFFS : The plaintiff, on the other hand argued that the promise was not vague and also the construction of the offer was such that it was clear that in the case the product was not effective the company would reward a certain amount. Also in order to facilitate the same, the company had deposited a large amount in the alliance bank account. Thus, their act of depositing the amount is proof of their intention to actually from an agreement from one side . the plaintiff also proved that there was a consideration in the form of the money paid to buy the carbolic smoke ball.
JUDGEMENTS
The carbolic smoke ball company , represented by h.h asquith, lost its arguments at the queens bench. It appealed straight away . the court of appeal unanimously rejected the companys arguments and held that there was a fully binding contract for 100pounds with mrs carlill.
The reason given by the three judges were:
That the advertisement was not a unilateral offer to all the world but an offer restricted to those who acted upon the terms contained in the advertisement.
2. That 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 determinant incurred at the behest of the company and furthermore more people buying smoke ball by relying on the advertisement was a clear benefit to carbolic.
4. That the company claim that 1000 pound was deposited at the alliance bank showed the serious intention to be lagally bound.
Mrs. Carlill was entitled to reward. There was a contract between the company and mrs carlill as the offer comes under a general offer under which the offer was accepted by mrs carlill.
REFRENCES
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INDIAN KANOON
This article is written by Sushant kumar Shrivastava of Lloyd school of law , intern at legal vidhiya.
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