This case talk about the elements that lead an contract to enforceable include offer and acceptance

1. Carlill v Carbolic
Smoke Ball Co.
[1893]
Michelle Yee (0328081)
Sim Tian Xin (0327918)
Ng Bee Yee (0328773)
Tan Hiew Tung (0327749)

2. Story of Carlill v Carbolic Smoke Ball
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 Company published
advertisements in newspapers
claiming that it would pay £100 to
anyone who got sick with influenza
after using its product according to
the instructions provided with it.
Mrs. Carlill saw the advertisement,
bought and used it until
she contracted the flu.

3. She claimed £100 from the
Carbolic Smoke Ball
Company and the company
refuse to pay for it.
Mrs.Carlill brought the claim to court —
1)argued the advertisement
2)her reliance on it was a contract between the
company and her
so the company ought to pay!
The company argued it was
not a serious contract.

4. The Court of Appeal unanimously rejected the company's arguments and held
that there was a fully binding contract for £100 with Mrs. Carlill.
The reasons given by the judges were :
(LawTeacher.net)
The advertisement was a unilateral offer to all the world but restricted to those who acted
upon the advertisement
The satisfying conditions for using the smoke ball constituted acceptance of the offer
That purchasing or merely using the smoke ball constituted good consideration
That the company's claim that £1000 was deposited at the Alliance Bank
showed the serious intention to be legally bound.

5. Why is Carlill v Carbolic Smoke Ball Co.
important in Contract Law ?

6. 1. Offer can be unilateral
- The judges of Carlill v Carbolic Smoke Ball Company (1893) decided that the
advertisement was a unilateral offer but only limited to those who had fulfilled the
condition. (MacMillan, C. & Stone, R.)
- Unilateral contracts:
- One sided
- Its offer can be made to the world at large

7. Offer & Acceptance
- The judges (Lindley & Bowen) claimed that there was
offer & acceptance to establish a contract
- Offer: reward of £100
- Acceptance: Carlill bought & use the smoke ball
2. Defines the essences to create a binding contract

8. Differences between Invitation to Treat and Offer
Invitation To Treat Offer
an invitation to people to create offer
-example : advertisement, tender, display
of goods
-when “accepted”, the invited person
would be making the offer
-not legally binding
-proposal or promise by the offeror
-example:Lost and Missing poster
-if the offer is accepted by offeree a
legally binding contract is created.
Advertisement in
newspaper
Missing dog poster

9. Differentiating Invitation to Treat from Offer
-Most advertisements are invitation to treat
-Case of Carlill V Carbolic Smoke Ball Co. clearly indicated any person who had
performed the condition can get the £100 reward in the advertisement
-Court of Appeal held that the advertisement amounted to an offer
-Mrs Carlill had accepted the offer when she performed the specified conditions
-A legally binding contract created (it is not an invitation to treat).

10. Communication of acceptance is not necessary
If there is an offer to the world at large, and that offer does not expressly
or impliedly require the notification of performance, the performance of
the specified condition in the offer will constitute the acceptance of the
offer and consideration for the promise.
Claire Macken, Sample case summary of Carlill v Carbolic Smoke Ball Co
[1892] 2 QB48

11. Intention To Create Legal Relations
Intention to create legal relations consists of readiness of a party to accept
the legal sequences of having entered into an agreement.
Carlill v Carbolic: It was not a mere puff b/c £1000 was deposited with Alliance bank
to show their sincerity for the ad. (Macken, C.)

12. Consideration
There was ample consideration
● The inconvenience suffered by Mrs Carlill in using the smokeball as
directed was sufficient consideration
● The Carbolic Smoke Ball Company received a benefit in having people use
the smoke ball (direct sales and recognition)

13. 3. Influence of judgement to Law System
- Acts as a precedent to contractual laws in Britain
- A landmark case in protecting the rights of
consumers and defining the responsibilities of
companies.
- Continues to be cited in contractual and consumer
disputes today.
(lawgovpol.com)

14. Conclusion
Why is the case of Carlill v Carbolic Smoke Ball Co. important in contract law?
1. Offer can be unilateral.
2. The judges of Carlill v Carbolic concluded the elements to create a legal contract:
i. Offer & Acceptance
ii. Intention to create legal relations (£1000 in bank)
iii. Consideration (the inconvenience of using the product & the
benefits of the company)
Whereas offer is ought to be differentiated from a invitation to negotiate & communication of
acceptance is not necessary in unilateral contracts.
3. The judgements of the case are the precedents to British contract laws & are applied today.

15. References
1. https://www.lawteacher.net/free-law-essays/contract-law/carlill-v-carbolic-smoke-ball-co-contra
ct-law-essay.php
2. https://www.deakin.edu.au/__data/assets/pdf_file/0003/728211/carlillvcarbol.pdf
3. https://www.londoninternational.ac.uk/sites/default/files/programme_resources/laws/ug_subject_gui
des/elements_law_contract-subjectguide4chapters.pdf
4. http://lawgovpol.com/case-study-carlill-v-carbolic-smoke-ball-company-1893/