Contract Law - Carlill v Carbolic Smoke Ball Company (1893) 1 QB 256

Importance of the Case

• Unilateral Contract Example: An early Court of Appeal decision on unilateral contracts.
• Advertisements as Offers: Examines whether advertisements can constitute offers or are merely invitations to treat.

Facts of the Case

• Product: Carbolic Smoke Balls were claimed to be a cure for influenza.
• Advertisement:
  • Promised £100 reward for contracting influenza after using the ball as directed.
  • £1,000 was deposited in the bank to show sincerity.
• Mrs. Carlill:
  • Purchased and used the smoke balls as instructed.
  • Contracted flu and claimed the £100 reward, which was refused by the company.

Defendant's Arguments

1. Sales Puff: Argued the advert was just a sales promotion lacking intent.
2. Offer to the World: Claimed offers cannot be made to the world.
3. Notification of Acceptance: Suggested no acceptance was communicated.
4. Vagueness: Argued the lack of a time limit made the offer vague.
5. Consideration: Claimed no consideration was provided as purchase was not specified.

Court of Appeal's Decision

• Entitlement to Reward: Mrs. Carlill was entitled to the £100.
• Advertisement as Offer: Constituted an offer of a unilateral contract.
  • Intent Demonstrated: £1,000 deposit indicated genuine intent.
  • Offer to the World: Possible to make such offers.
  • Acceptance: No need to communicate acceptance; acceptance through performance.
  • Vagueness Resolved: Reasonable time limits could be applied.
  • Value in Usage: Benefit to defendants even without direct purchase.

Established Principles

1. Newspaper Advertisement as Offer: Can be an offer if specific and shows intent.
2. Offer to the World: Such offers are valid.
3. No Acceptance Communication Needed: In unilateral contracts, acceptance is via full performance.
4. Full Performance as Acceptance: Acceptance occurs through the completion of conditions.

Summary

• Facts: Mrs. Carlill followed the conditions but was denied the reward.
• Ratio: Advertisements can be offers if specific and show intent.
• Unilateral Contract Principles: Offer to the world, no acceptance communication needed, acceptance by performance.

Additional Resources

• YouTube Channel: Laura Sources for more contract law videos.
• Website: e.lauraresources.co.uk for lecture outlines and case summaries.
• Revision Games: lauravision.org.uk for quizzes and games.

Note: This summary is part of a video series on contract law.