A landmark case which proves that an advertisement can sometimes amounting to an offer and not necessarily be treated as an invitation to treat.

1. CASE :
CARLILL V CARBOLIC SMOKE BALL
Prepared by :
NUR FARHANA BINTI MAZLAN
NUR HAZIQAH BINTI MOHD ZALIZAN
RAJA NURAISYAH NATASYA BINTI
RAJA KAMARUZAMAN
BUS 326-BUSINESS LAW

2. HISTORY ABOUT THE CASE :
-Carlill V Carbolic Smoke Ball Company (1893) is an
English contract law decision by the Court of Appeal, which
held an advertisement containing certain terms to get a
reward constituted a binding unilateral offer that could be
accepted by anyone who performed its terms.
-It is notable for its curious subject matter and how the
influential judges (particularly Lindley L J and Brown L J)
developed the law in inventive ways.
-Carlillis frequently discussed as an introductory contract
case, and may often be the first legal case a law student
studies in the law of contract.

3. -The case concerned a flu remedy called the “carbolic
smoke ball”. The manufacturer advertised that buyers who
found it did not work would be awarded £100, a
considerable amount of money at the time. The company
was found to have been bound by its advertisement, which
was construed as an offer which the buyer, by using the
smoke ball, accepted, creating a contract.
-The Court of Appeal held the essential elements of a
contract were all present, including offer and acceptance,
consideration and an intention to create legal relations.

4. FACTS OF THE CASE :
• The case of Carlill v Carbolic Smoke Ball is one of the most important cases in English legal
history. In essence it defined what it is to create an ‘offer’ in an advertisement, and how a
member of the public successfully argued that they had ‘accepted’ the offer and performed
under the terms of the advertisement (contract.)
FACTS OF THE CASE :
• The Carbolic Smoke Ball Company advertised in the Pall Mall Gazette in 1891 that their
Carbolic Smoke Ball was a cure for flu, bronchitis, coughs, colds, headaches, hay-fever,
whooping cough, laryngitis and sore throats amongst others.
• It was so confident of the usefulness of the carbolic smoke ball, and its ability not only to cure
but also to prevent someone from getting the ‘flu, that it advertised on the following basis:
Anyone who used the carbolic smoke ball in a particular way for a specified period of time,
but who still caught influenza afterwards, would be entitled to claim £100 from the company.
• The advertisement went on to say that the company had gone so far as to deposit £1000 in the
Alliance Bank in the event of any such claims. The plaintiff (who nowadays would be called
the ‘claimant’) saw the advertisement and decided to buy one of the carbolic smoke balls. She
used it exactly as advised, but still caught influenza. She took the Carbolic Smoke Ball
Company to court in order to claim her £100. The court found in her favour, but the
defendants appealed.

5. THE ADVERTISEMENT

6. ISSUES & RULES ABOUT THE
CASE :
ISSUE OF THE CASE:
-Does one who makes a unilateral offer for the sale of goods by means
of an advertisement impliedly waive notification of acceptance, if his
purpose is to sell as much product as possible?

7. RULES OF THE CASE:
Holding and Rule (Lindley)
• Yes. One who makes a unilateral offer for the sale of goods by means of an
advertisement impliedly waives notification of acceptance if his purpose is to sell as
much product as possible.
• The court held that a person who makes an offer may decline to require notice of
acceptance if he or she wishes. One who makes an offer dispenses with the
requirement of notice of acceptance if the form of the offer shows that notice of
acceptance is not required. To accept an offer, a person need only follow the indicated
method of acceptance. If the offered either expressly or impliedly intimates in his offer
that it will be sufficient to act without giving notice of acceptance, performance is
sufficient acceptance without notification.
• The court held that an advertisement is considered to be an offer when it specifies the
quantity of persons who are eligible to accept its terms. If such an advertisement
requires performance, the offered is not required to give notice of his performance.
• The court addressed the issue of whether the ad was intended to be a promise or
whether it was merely “puffing”. The court pointed to Carbolic Smoke Ball’s claim in
the advertisement that it had deposited 1000 pounds with Alliance Bank, which the
court decided was intended to demonstrate the company’s sincerity in paying the
reward.

8. A Newspaper advert placed by the defendant stated:-
£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts
the influenza after having used the ball three times daily for two weeks according to the
printed directions supplied with each ball.
£1000 is deposited with the Alliance Bank, shewing our sincerity in the matter."
Mrs Carlill purchased some smoke balls and used them according to the directions and caught
flu. She sought to claim the stated £100 reward.
The defendant raised the following arguments to demonstrate the advertisement was a mere
invitation to treat rather than an offer:
1. The advert was a sales puff and lacked intent to be an offer.
2. It is not possible to make an offer to the world.
3. There was no notification of acceptance.
4. The wording was too vague to constitute an offer since there was no stated time limit as to
catching the flu.
5. There was no consideration provided since the 'offer' did not specify that the user of the
balls must have purchased them.
COURT DECISION :

9. Held:
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:
1. The statement referring to the deposit of £1,000 demonstrated intent and
therefore it was not a mere sales puff.
2. It is quite possible to make an offer to the world.
3. In unilateral contracts there is no requirement that the offeree
communicates an intention to accept, since acceptance is through full
performance.
4. Whilst there may be some ambiguity in the wording this was capable of
being resolved by applying a reasonable time limit or confiningit to only those
who caught flu whilst still using the balls.
5. The defendants would have value in people using the balls even if they had
not been purchased by them directly.

10. THANK YOU

11. VIDEO CARLIL V CARLIL