Carlill v Carbolic Smoke Ball Company is a landmark case in England regarding consumer protection and consumer contract. Carbolic Smoke Ball Company made a product called the “smoke ball” which claimed to be a cure for influenza and a number of other diseases. The company published advertisements 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.
The advertisement said: “£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, in accordance with the printed directions supplied with each ball. £1,000 is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter.”
Mrs Carlill saw the advertisement, bought one of the balls and used it three times daily for nearly two months until she contracted flu on January 17, 1892. She claimed £100 from the Carbolic Smoke Ball Company. They ignored two letters from her husband, a solicitor.
On a third request for her reward, they replied with an anonymous letter that, if it is used properly, the company had complete confidence in the smoke ball’s efficacy, but “to protect themselves against all fraudulent claims” they would need her to come to their office to use the ball each day and be checked by the secretary.
Mrs Carlill brought a claim to court. The barristers representing her argued that the advertisement and her reliance on it was a contract between her and the company, and so they ought to pay. The company argued it was not a contract. One of the issues of the case was the capacity of a company to make a contract with the whole world.
The court finally held that it was a contract. Judge Bowen, writing for the majority, held that the contract was not with the whole world, but rather with those who fulfill the stipulated conditions. He held that the terms were not vague, if read in their plain meaning, and a consumer would be entitled to reward if he/she used the ball for two weeks, three times a day and got the flu.
However, if one used the ball before the advertisement and got the flu, there would be no contract created due to no reliance of interest. As for mere puffery, the language of the advertisement indicating that they had £1,000 in the bank directly contradicts that claim.
Performance of the condition of the advertisement was sufficient acceptance and it was not necessary that Carbolic Smoke Ball Company be notified of the intention to be bound. He further ruled that the inconvenience of Mrs Carlill was sufficient consideration for this contract.
Judge Lindley wrote that notification of acceptance need not precede performance; in this case, acceptance was contemporaneous with performance.
Further, the offer and the nature of transaction were such that, it did not require notice of acceptance to be bound by it. Finally, Mrs Carlill was entitled to the reward as advertised by the Carbolic Smoke Ball Company.
