Carbolic Smoke Ball

A company called Carbolic Smoke Ball Ltd. Was the manufacturer and vendor of a medical
preparation called the ‘Carbolic Smoke Ball’. The contraption comprised of a hollow ball of
rubber, a nozzle at the top. A certain medicinal powder had to be put inside the ball. On
compressing the ball, the powder forced out in the form of a cloud of infinitesimally small
particles, resembling smoke. Thus the name Smoke Ball. The carbolic smoke ball was to be
used for the treatment of cold and influenza. In the year 1890 and 1891-92, influenza had
spread like an epidemic in London. At the time, flu was not necessarily life threatening, but
it was debilitating. The cause of influenza was not known and quack cures abounded. The
carbolic smoke ball limited as inserted the following advertisement in the Pall Mall Gazette
of November 13 1891, and in some other news papers:

A £100 reward will be paid for the carbolic smoke ball company to any person who contracts
the increasing epidemic influenza, colds, or any disease caused by taking cold, after having
used the ball three times daily for two weeks, according to the printed directions supplied
with each ball.£1000 has been deposited with the alliance bank , regent street , shewing our
sincerity in the matter.

During the last epidemic of influenza, many thousands of carbolic smoke balls had been sold
as preventive against this disease, and in no ascertained case was the disease contracted by
those using the carbolic smoke ball.

One carbolic smoke ball will last a family several months, making it the cheapest remedy in
the world at the price, 10s, post free. The ball can be refilled at a cost of 5s. Address,
Carbolic Smoke Ball Company, 27, Princess Street, Hanover square, London.

A lady, Edina Carlill, had never had influenza before, but she was anxious about preventing it
in the future as well. She bought one of the balls from a chemist, and used it as directed,
three times a day, from Nov 20, 1891, to Jan 17, 1892. Despite the proper use of the smoke
ball, not just for two weeks, but for two months, she contracted influenza. She wrote a
letter to the carbolic smoke ball ltd., setting out the details of her purchase and the event of
her contracting influenza and claimed the 100 pounds promised in your advertisement and
in accordance with the contract between us. The company flatly refused to pay and Ms
Carlill went to the court.

1. Was the advertisement an offer?

http://en.wikipedia.org/wiki/Carlill_v_Carbolic_Smoke_Ball_Company
Facts
The Carbolic Smoke Ball Company 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 (phenol). The tube was then inserted into the
user's nose. It was squeezed at the bottom to release the vapors into the nose of the user.
This would cause the nose to run, and hopefully flush out the cold. In fact the inflammation
caused by the device would have probably increased susceptibility to catching influenza.

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 set out in the advertisement.

 “£100 reward will be paid by the Carbolic Smoke Ball Company to any person who
contracts the increasing epidemic influenza colds, or any disease caused by taking
cold, 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, Regent Street, shewing our sincerity in
the matter.
 During the last epidemic of influenza many thousand carbolic smoke balls were sold
as preventives against this disease, and in no ascertained case was the disease
contracted by those using the carbolic smoke ball.
 One carbolic smoke ball will last a family several months, making it the cheapest
remedy in the world at the price, 10s. Post free. The ball can be refilled at a cost of
5s. Address: “Carbolic Smoke Ball Company, “27, Princes Street, Hanover Square,
London.”

Ms Louisa Elizabeth Carlill saw the advertisement, bought one of the balls and used three
times daily for nearly two months until she contracted the flu on January 17, 1892. She
claimed £100 from the Carbolic Smoke Ball Company. They ignored two letters from her
husband, who had trained as a solicitor. On a third request for her reward, they replied with
an anonymous letter that if it is used properly the company had complete confidence in the
smoke ball's efficacy, but "to protect themselves against all fraudulent claims" they would
need her to come to their office to use the ball each day and checked by the secretary. Mrs
Carlill brought a claim to court. The barristers representing her argued that the
advertisement and her reliance on it was a contract between her and the company, and so
they ought to pay. The company argued it was not a serious contract.
Case Analysis
Answers
1. Yes, the advertisement was an offer. Unilateral offer
2. The offer had been made for the whole world. It was a general offer.
3. Yes, the offer has been accepted so as to convert it into an agreement. Sometimes
communication and conduct used to express.
4. Mere purchase of Smoke Ball is consideration. Because all people can’t go for a
contract.

The Court of Appeal unanimously rejected the company's arguments and held that there
was a fully binding contract for £100 with Ms Carlill. Among the reasons given by the three
judges were

1. The advert was a unilateral offer to all the world

He follows on with essentially five points.

1. The advert was not "mere puff" as had been alleged by the company, because the
deposit of £1000 in the bank evidenced seriousness.
2. The advertisement was an offer to the world.
3. Communication of acceptance is not necessary for a contract when people's conduct
manifests an intention to contract.
4. That the vagueness of the adverts’ terms was no insurmountable obstacle.
5. The nature of Ms 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 use a smoke ball.

Five main steps in his reasoning can be identified.

1. Bowen LJ says that the contract was not too vague to be enforced, because it could
be interpreted according to what ordinary people would understand by it. He
differed slightly to Lindley LJ on what time period one could contract flu and still
 have a claim but this was not a crucial point, because the fact was the Ms Carlill got
flu while using the smoke ball.
2. He says that the advert was not mere puff, like Lindley LJ, because £1000 was
deposited in the bank to pay rewards.
3. He said that although there was an offer to the whole world, there was not a
contract with the whole world. Therefore, it was not an absurd basis for a contract,
because only the people that used it would bind the company.
4. He says that communication is not necessary to accept the terms of an offer;
conduct is and should be sufficient.
5. There was clearly good consideration given by Ms Carlill because she went to the
"inconvenience" of using it, and the company got the benefit of extra sales.