Case Discussion on Famous Carbolic Smoke Ball

1. Student Coordinators:
Ashutosh Sahu
Shubham Sharma
MBA 2nd Sem

2.  The Carbolic Smoke Ball Co. made a product called
the "smoke ball".
 It claimed to be a cure for influenza and a number of
other diseases.
 The smoke ball was a rubber ball with a tube attached.
It was filled with carbolic acid (or phenol).
 The tube would be inserted into a user's nose and
squeezed at the bottom to release the vapours. The
nose would run, ostensibly flushing out viral
infections.

3.  The Company published advertisements in the Pall
Mall Gazette and other newspapers on November 13,
1891, claiming that it would pay £100 to anyone who
got sick with influenza after using its product
according to the instructions provided with it.
Fig 1: Carbolic Smoke Ball

4. £100 REWARD
WILL BE PAID BY THE
CARBOLIC SMOKE BALL CO.
to any Person who contracts the Increasing Epidemic,
INFLUENZA,
Cold, or any Diseases caused by taking Cold, after having used the
CARBOLIC SMOKE BALL according to the printed directions
supplied with each Ball.
£1000 IS DEPOSITED
with the ALLIANCE BANK, Regent Street, showing our sincerity
in the matter.

5.  Mrs Louisa Elizabeth Carlill saw the advertisement,
bought one of the balls and used it three times daily
for nearly two months until she contracted the flu on
17 January 1892.
 She claimed £100 from the Carbolic Smoke Ball
Company.
Fig 2: Ms Lousia Elizabeth Carlill

6.  The defendant raised the following arguments to
demonstrate the advertisement was a mere invitation
to treat rather than an offer:
 The advert was a sales puff and lacked intent to be an
offer.
 It is not possible to make an offer to the world.
 There was no notification of acceptance.
 The wording was too vague to constitute an offer since
there was no stated time limit as to catching the flu.
 There was no consideration provided since the 'offer'
did not specify that the user of the balls must have
purchased them.

7.  Was the advertisement an offer?
 To whom had the offer been made?
 If Ms. Carlill had accepted the offer, what
had been the consideration?
Let’s have discussion on the given
problems......

8. The Court of Appeal held that Mrs Carlill was entitled
to the reward as the advert constituted an offer of a
unilateral contract which she had accepted by performing
the conditions stated in the offer. The court rejected all the
arguments put forward by the defendants for the following
reasons:
The statement referring to the deposit of £1,000 demonstrated
intent to demonstrate the company’s sincerity in paying the
reward.and therefore it was not a mere sales puff. (Intention to
create legal relation)
It is quite possible to make an offer to the world.
In unilateral contracts there is no requirement that the offeree
communicates an intention to accept, since acceptance is through
full performance.

9.  There was consideration in this case for two reasons:
 Carbolic received a benefit i.e. In the sales directly beneficial
to them by advertising the Carbolic Smoke Ball.
 The direct inconvenience to the person who uses the smoke
ball 3 times a day x 2 weeks according to the directions at the
request of Carbolic.
 In other words, performance of the specified conditions
constitutes consideration for the promise.
Fig 3: Lord
Justice Lindly
Fig 4: Lord Justice
A.L. Smith

10.  Yes, the advertisement was an offer, more
specifically General Offer
 General offer - When offer is given to entire world at a
large.
 The offer had been made to the whole world – and
will ripen into a contract with anybody who comes
forward and performs the condition mentioned in the
advertisement.
 The nature of Mrs Carlill's consideration (what she
gave in return for the offer) was good, because there
is both an advantage in additional sales in reaction to
the advertisement and a "distinct inconvenience" that
people go to when using a smoke ball.

12. Hope you all have enjoyed the
case!!!