Facts
In 1891 the Carbolic Smoke Ball Company advertised its product in the Pall Mall Gazette. The advert promised that the company would pay £100 to anyone who caught influenza after using the smoke ball three times a day for two weeks, following the printed directions. It added that the company had deposited £1,000 with the Alliance Bank to show its sincerity in the matter.
Louisa Carlill bought a smoke ball and used it as directed. She then caught influenza. When she claimed the £100, the company refused to pay, and she sued.
Issues
The company raised almost every defence available:
- the advert was a mere "puff", not a serious promise;
- you can't make an offer to the whole world;
- Mrs Carlill never notified the company that she accepted;
- she gave no consideration;
- the terms were too vague, because the advert didn't say how long after use the protection lasted.
Decision
The Court of Appeal (Lindley, Bowen and AL Smith LJJ) dismissed the company's appeal. There was a binding contract, and Mrs Carlill was entitled to £100.
Reasoning
Intention to be bound. The deposit of £1,000 was decisive. A company that tells readers it has put money aside to meet claims can't later say its promise was never meant to be taken seriously.
Offers to the world. An offer doesn't have to be made to a named person. The advert was an offer to anyone who performed the conditions, and a contract was made with each person who did so. Bowen LJ compared it to a reward for finding a lost dog: the offer is made to everyone, but a contract only arises with the person who finds the dog.
No need to notify acceptance. Normally acceptance must be communicated. But the person who makes an offer can dispense with that requirement, and in a unilateral offer of this kind the offeror is taken to have done so. Using the smoke ball as directed was the acceptance.
Consideration. Mrs Carlill gave consideration by using the smoke ball, which was an inconvenience to her, at the company's request. The company also benefited from increased sales encouraged by the advert.
Certainty. The court rejected the argument that the promise was too vague. Read sensibly, it covered catching influenza while using the smoke ball, or at least within a reasonable time afterwards.
Why it matters
Carlill is the starting point for unilateral contracts, where one party promises something in return for an act rather than a promise. It shows that advertisements, though usually only invitations to treat (as in Partridge v Crittenden [1968] 1 WLR 1204), can be offers when the wording shows a clear intention to be bound.
The case also answers the practical question of how acceptance works when the offeror doesn't expect to hear from anyone: performance is acceptance.
How it comes up in exams
In problem questions, use Carlill to:
- distinguish an offer from an invitation to treat, contrasting it with Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401 and Fisher v Bell [1961] 1 QB 394;
- explain acceptance by conduct in unilateral contracts;
- discuss whether an offeror can revoke a unilateral offer once the other party has started performing. Later cases such as Errington v Errington and Woods [1952] 1 KB 290 and Daulia Ltd v Four Millbank Nominees Ltd [1978] Ch 231 suggest the offeror can't once performance has begun.
On SQE1, you won't be asked to name the case, but you will need the rule: a clear promise to anyone who performs an act creates a contract when someone performs it.
Frequently asked questions
What was decided in Carlill v Carbolic Smoke Ball Co?
The Court of Appeal held that the company's advertisement was a unilateral offer to anyone who used the smoke ball as directed and still caught influenza. Mrs Carlill accepted it by performing those conditions, so she was entitled to the promised £100.
Why was the advert an offer and not an invitation to treat?
The promise was specific, and the company said it had deposited £1,000 with its bank to show its sincerity. That showed a clear intention to be bound by anyone who met the conditions.
Did Mrs Carlill need to tell the company she accepted?
No. In a unilateral contract, the offeror is taken to have waived notification of acceptance. Performing the conditions is enough.
Is Carlill still good law?
Yes. It remains the leading authority on unilateral offers and acceptance by conduct, and it is regularly applied to rewards, promotions and online offers.