case study legal studies

1. Carlill v Carbolic
Smoke Ball Co. (1892)
Aaron Yong Luo Zhou 0336419
Siew Kha Yee 0331934
Chang Meiga 0336242
Yew Jin Ming 0336813

2. Story of Carlill v Carbolic Smoke Ball
 Carbolic Smoke Ball Co. launch a product which is
called the ‘smoke ball’. The company claim that this
smoke ball can cure influenza.
 The company published an advertisement on the
newspaper. They company claim that they would offer
to pay £100 for the users who contracted influenza
after using the ball three times a day for two weeks.
The company added that they had deposited £1000
into the Alliance Bank.

3.  Mrs. Carlill saw the advertisement on the newspaper
and she bought a smoke ball. After using it, she was
attacked by influenza during the course of treatment.
 She sued the company for £100 but the company
refuse to pay for it.
 In conclusion, court of appeal rejected the company’s
arguments and Mrs. Carlill won the case because
there are fully binding contract between both parties
and she is entitled to get the £100.

4.  Mrs. Carlill brought a few claim to court:
(a) She argued that the company have put up the
advertisement.
(b) She assume that it was a contract between the
company and her.

5.  Defenses raised by the Carbolic Smoke Ball Co:
(a) The offer was too vague.
(b) The matter was an advertising ‘puff’ & there is no
intention to create legal relation.
(c) This was an attempt to contract with the whole world
and that this was impossible in English Law.
(d) Claim that the claimant had not supplied any
consideration
(e) There had been no communication of acceptance.

6. Why is Carlill v Carbolic Smoke
Ball Co. case Important in Contract
Law?

7. 1. Offer can be unilateral
 Offer – definite promise to be bound, it can be made
to one person, class of person and or society at large.
 Unilateral contract – one party assumes an obligation.
 Carbolic Smoke Ball Co. :
 1) offer a reward of £100 with advertisement (offer to
the society at large) -> unilateral contract
 2) argued that there is no acceptance to the offer as
Mrs. Carlill did not communicate with them.

8. Difference between Invitation to treat
and Offer
Invitation to treat Offer
An invitation to people to create offer Proposal or promise by the offeror
Eg: advertisement, job offer, display
of goods
Eg: Lost and missing poster
Not legally binding Legally binding
In Carlill v Carbolic Smoke Ball Co., it is an offer but not invitation to treat
because Carbolic Smoke Ball Co. offered to pay £100 to any person who
contracted influenza after using the ball three times a day in two weeks.

9. 2. Communication of acceptance
is not necessary
 Acceptance –where offeree signifies his assent to an
offer.
Although Mrs. Carlill did not make communication with
Carbolic Smoke Ball Co. with regards to the acceptance,
but after the court looked at the reward case, it stated that
in this kind of contract, acceptance may be by conduct.

10. 3. An agreement requires
Intention to create legal relations
 Intention to create legal relations consists of readiness
of a party to enter a contract that is recognized by the
courts.
 Carbolic Smoke Ball – deposit of £1000 in Alliance
Bank was a clear evidence that there is intention to
pay for claim.

11. CONCLUSION
 Importance of Carlill v Carbolic Smoke Ball Co. case:
1. Offer can be unilateral
2. Communication of acceptance is not necessary
3. An agreement requires intention to create legal
relations

12. REFERENCE