Jims, school of law

Laws of Contract

TOPIC: CASE ANALYSIS ON CARLIL VS.

CARBOLIC SMOKE BALL COMPANY

SUBMITTED TO :– Mr. MUDIT ROHILLA

SUBMITTED BY :– DIVYA BHUSHAN
CLASS: –BA.LLB (1ST SEM.)
SECTION :- A
ENROLLMENT NO. :- 02025503819
 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to Mr.

MUDIT ROHILLA who gave me the golden opportunity to do this
wonderful assignment on the topic CARLIL VS. CARBOLIC
SMOKE BALL COMPANY, which also helped me in doing a lot of
research and I came to know about so much many new things I am
really thankful to you mam. Secondly, I would also like to thank my
brother and friends who helped me a lot in finalizing this assignment
within the limited time period.
 CARLIL VS. CARBOLIC SMOKE BALL COMPANY

CITATION: LOUISA CARLIL VS. CARBOLIC SMOKE BALL COMPANY

APELLANT: LOUISA CARLIL
RESPONDENT: CARBOLIC SMOKE BALL COMPANY
YEAR: 1892
COURT: COURT OF APPEAL (CIVIL DECISION)
BENCH: Lindley L J, Bowen L J and AL Smith L J

AREA OF LAW: LAW OF TORTS

FACTS: The Company made a product called “Smoke Ball”. It claimed to be

a cure to influenza and many other diseases, in the context 1889-1890: Flu
pandemic which is estimated to have killed 1 million people. The smoke ball
was a rubber ball with a tube fixed to its opening. The ball is filled with
Carbolic acid (Phenol). The tube is supposed to be inserted in one of your
nostrils and the bottom part of the rubber ball is to be pressed. The gas enters
your respiratory tract and flushes out all the viruses.

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, showing 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.”
Plaintiff:
Louisa Carlill

She, believing in the accuracy of the statement made in the advertisement with
respect to efficacy of the smoke ball in cases of influenza, purchased one packet
and used it thrice every day from mid-November, 1891 until 17th Jan, 1892, at
which latter date she had an attack of influenza.

Thereupon, her husband wrote a letter for her to the defendants, stating what
had happened, and asking for £100 as promised in the advertisement. They
refused and this action was brought in court before Hawkins J. and a special
jury. Arguments were heard on both the sides and finally the verdict was given
in favour of Mrs. Carlill.

The defendants appealed.

ISSUES:
(1) That the advertisement was a unilateral offer to the entire world

(2) The satisfying conditions for using the smoke ball constituted acceptance of the
offer.

(3) That purchasing or merely using the smoke ball constituted good consideration,
because it was a distinct detriment incurred at the behest of the company and,
furthermore, more people buying smoke balls by relying on the advert was a clear
benefit to Carbolic

(4) That the company’s claim that £1000 was deposited at the Alliance Bank showed
the serious intention to be legally bound.

JUDGEMENTS:
Lindley.L.J:

He dismissed the appeal. He, giving his decision first and reasons later, explained his
judgment answering to all allegations put up by the defendant’s counsel and
upholding the lower court’s decision. An excerpt which makes a short shrift of the
insurance and wagering contract that were dealt with in the Queen’s Bench

―I will begin by referring to two points which were raised in the Court below. I refer to
them simply for the purpose of dismissing them. First, it is said no action will lie upon
this contract because it is a policy. You have only to look at the advertisement to
dismiss that suggestion. Then it was said that it is a bet. Hawkins, J., came to the
conclusion that nobody ever dreamt of a bet, and that the transaction had nothing
whatever in common with a bet. I so entirely agree with him that I pass over this
contention also as not worth serious attention.

Then, what is left? The first observation I will make is that we are not dealing with any
inference of fact. We are dealing with an express promise to pay 100£ in certain
events. Read the advertisement how you will, and twist it about as you will, here is a
distinct promise expressed in language which is perfectly unmistakable —

―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.‖

He discussed the following issues with respect to this case:

The advertisement was not a ―mere puff‖ as had been alleged by the defendant. The
very fact that £1000 was deposited with Alliance Bank, Regent Street. So what is that
money for? What is that passage put in for, except to negative the suggestion that
this is a mere puff, and means nothing at all? The deposit is called in aid by the
advertisers as proof of their sincerity in the matter. What do they mean?-The
advertisement definitely means seriousness.

The advertisement was an offer to the world. It was contended that it is not binding.
It is said that it is not made with anybody in particular. In point of law this
advertisement is an offer to pay 100ℓ to anybody who will perform these conditions,
and the performance of the conditions is the acceptance of the offer.

Communication of acceptance is not necessary for a contract when people’s conduct

manifests an intention to contract. But then the defense council put forth a point
―Supposing that the performance of the conditions is an acceptance of the offer, that
acceptance ought to have been notified.‖ Unquestionably, as a general proposition,
when an offer is made, it is necessary in order to make a binding contract, not only
that it should be accepted, but that the acceptance should be notified. But in cases of
this kind, it is apprehended that they are an exception to the rule that the notification
of the acceptance need not precede the performance. This offer is a continuing offer.
It was never revoked, and if notice of acceptance is required, then the person who
makes the offer gets the notice of acceptance contemporaneously with his notice of
the performance of the condition before his offer is revoked.

The defence counsel has argued that this advertisement is a nudum pactum – that
there is no consideration. They say ―it is of no advantage to them how much the ball
is used‖. The judged answered ―The answer to that I think is this. It is quite obvious
that, in the view of the defendants, the advertisers, a use of the smoke balls by the
public, if they can get the public to have confidence enough to use them, will react
and produce a sale which is directly beneficial to them, the defendants. Therefore, it
appears to me that out of this transaction emerges an advantage to them which is
enough to constitute a consideration.‖ But there is also another view to this point
which the Judge Lindley aptly asserts: what about the person who puts himself/
herself in an inconvenient, if not detrimental to his health, while inhaling potent
fumes of carbolic gas? So therefore there is ample consideration to this promise.

Bowen, L.J:

He concurred with Lindley, L.J. He was of the same opinion but he also discussed few
points with respect to vagueness and time period of the contract. His opinion was
more tightly structured in style and frequently cited.

In response to Defence’s council point that this contract is too vague to be enforced.
He, dismissing their claim, relied on his construction of the document and he said
that there is no time limit fixed for catching influenza, and it cannot seriously be
meant to promise to pay money to a person who catches influenza at any time after
the inhaling of the smoke ball. There is also great vagueness in the limitation of the
persons with whom the contract was intended to be made. But this document was
intended to be issued to the public and to be read by public. So it is very important
to understand how would a commoner interpret this advertisement? And the effect
of this advertisement was to attract people and make them use it, which would
amount to more sales, thus more profit. Based on this intention to promote the
distribution of the smoke balls and to increase its usage, the advertisement was
accepted as a contract addressing public at large but limited to those people who
are using it either for prevention or treatment of influenza and other mentioned
diseases.

Another point which was discussed in the court was that of the time limit of the
contract. How do you define reasonable time period? And after great discussion, the
respected judge came to a conclusion that the protection warranted by the contract
was to last during the epidemic (1889-90 Flu epidemic).If so, it was during this
epidemic that the plaintiff contracted this disease. So the contract holds.

A.L .Smith, L.J:

His judgment was more general and concurred with both Lindley LJ and Bowen LJ’s
decisions.
ANALYSIS:
The appeal was dismissed unanimously by all the three judges and Mrs. Carlill finally
received compensation of £100. She lived to the ripe old age of 96. She died on
March 10, 1942; according to her doctor principally of old age. There was one cause
noted though: Influenza.

Mr. Roe, owner of Carbolic Smoke ball Co., continued with his aggressive marketing.
This time he increased the reward to £200 following the loss of the case.

CONCLUSION:
This is the most frequently cited case in the common law of contract, particularly
where unilateral contracts are concerned. It provides an excellent study of the basic
principles of contract and how they relate to everyday life. Essential elements of
contract including Offer & Acceptance, Consideration, Intention to create Legal
Relations, etc. were mentioned in this case. This case forms the foundation for
Contract Law.