Carbolic Smoke Ball Co. was a company that manufactured and sold a product called the “Carbolic Smoke Ball,” which was claimed to prevent influenza and other diseases. The company published an advertisement stating that they would pay £100 to anyone who used the smoke ball as directed and still contracted influenza. The advertisement also stated that £1,000 had been deposited in a bank to show their sincerity.
Mrs. Carlill, a customer, purchased and used the smoke ball as instructed but still contracted influenza. She then claimed the £100 reward. However, the company refused to pay, arguing that:
- The advertisement was not a serious contractual offer but mere “puffery.”
- There was no formal acceptance or communication of acceptance.
- There was no consideration from Mrs. Carlill.
Final Order (Judgment)
The Court of Appeal ruled in favor of Mrs. Carlill, holding that:
- The advertisement was a unilateral offer, which could be accepted by anyone who performed the conditions stated.
- Mrs. Carlill accepted the offer by using the smoke ball as directed, and no formal acceptance was necessary.
- There was valid consideration, as the use of the smoke ball created inconvenience and benefit to the company (increased sales).
- The promise was legally binding, especially since the company had deposited money in the bank to show sincerity.
Thus, Mrs. Carlill was entitled to the £100 reward, and this case became a landmark precedent in contract law, particularly for unilateral contracts.