Can advertisements

Create
A contract?

A write up on legal environment

of business case let

Submitted by:
Adil mirza
ICFAI Business
School

Carlill vs. Carbolic Smoke Ball Company

 Court of Appeal (London), 1893
Parties involved:
The plaintiff: Mrs. Carlill who after reading the advertisement bought the product and even after
using it according to the specifications mentioned in the advertisement caught influenza. She
proceeded to claim an amount of 100£ from the defendants as was promised by them.
The defendants: The Carbolic smoke ball company, a pharmaceutical manufacturer of smoke
balls, who advertised to pay a sum of 100£ to anyone who caught influenza even after using the
smoke balls as they prescribed it.
Issues in the case:
1. Can an advertisement create a contract?
2. Did Mrs. Carlill’s act of buying the smoke ball and yet catching influenza form the
consideration for the company’s contract?
3. Is this contact a wager or a policy of insurance?
4. Is this contract intended to be a promise or is it a mere puff?
5. Is the contract not binding because it is not made to anyone In particular?
6. Is notice of acceptance needed?
Holding:
1. Yes an advertisement can create a contract particularly in the cases like the one in Mrs.
Carlill vs. Carbolic smoke company. Where the advertisement creates a general offer of
acceptance and the person qualifying for the offer accepts it without communicating to
the offeror as it becomes an implied acceptance.
2. Yes Mrs. Carlill act of buying the smoke ball and yet catching the influenza forms the
considerations for the company’s contract as the inconvenience sustained by the plaintiff
at the request of the defendant is enough to create a consideration. In this case the
plaintiff took the trouble of using the Smoke Ball, also the use of the Smoke Ball was
contemplated by the defendants as being indirectly a benefit to them, because the use of
the Smoke Ball would promote their sales.

3. This contract is not a wager as it is not a bet between two parties. It is a policy of
insurance as the defendants in the advertisements assured the users of the Smoke Balls of
 reimbursement of some amount of money in case the usage did not produce the desired
results.
4. This contract is intended to be a serious offer as the defendant disclosed in the
advertisement that they had deposited 1000 £ with the Alliance Bank, showing their
sincerity in the matter. While on the other hand a mere puff is a gimmick which does not
have any seriousness associated with it.
5. The contract in this case is binding as it a general offer. A general offer is made to the
world at large or to the general public and maybe accepted by any person who fulfills the
necessary conditions.
6. In this case no notice of acceptance is needed as it is a general offer and any person who
fulfills the necessary conditions can accept it. In this case notice of performance is good
enough to accept the offer.
Legal Theories Used:
By the Defendant:
1. The defendants contended that it is a bad policy to regard their advertisement as a binding
contract.
2. The defendants also contended that the advertisement was a mere puff and the company
had no intention of entering into a legal contract.
3. The defendant contended that the offer had not been made to any one person in particular
and that the plaintiff had not communicated her intention of accepting the offer or
consideration.
By the Plaintiff:
1. The plaintiff contended that the advertisement constituted an offer and thus a binding
contract was formed.
2. The plaintiff also contended that buying the Smoke Balls, using them as directed and then
getting sick constituted an acceptance because any person who fulfills the necessary
conditions can accept it and notice of performance is good enough to accept the offer.
Conclusion:
In the light of above discussion it is clear that in the given case there is an express promise made
by the plaintiff by the notice of performance. In this case the notice of performance complies
with the notice of acceptance because the offerer is agreeing that by performing the offeree is
automatically accepting. The advertisement is not also a mere puff as 1000 £ deposited in the
bank speaks for the sincerity of the offer. There is also a consideration on both the plaintiff as
well as the defendant’s side as the plaintiff took the trouble of using the Smoke Ball, also the use
of the Smoke Ball was contemplated by the defendants as being indirectly a benefit to them,
because the use of the Smoke Ball would promote their sales.
Thus the judgement goes in favour of plaintiff and she must get the 100 £ as promised.