1.0 INTRODUCTION
The Carlill V Carbolic Smoke Ball Company(1893) which held in Court
of Appeal in United Kingdom considered a landmark in English Law of Contracts.
Judges of this case (Lindley LJ, A.L.Smith LJ and Bowen LJ) developed the law
in inventive ways with regards to this curious subject matter.
The Carbolic Smoke Ball Company
Introduced a product called “Smoke Ball” as a cure for influenza and a number
of other diseases as well in the context of the flu pandemic 1889-1890.
They published a news paper advertisement in Pall Mall Gazette and other news
papers 13th November 1891 claiming that they would pay £100
if anyone gets sick with influenza after using this product according to the
correct directions. The Smoke Ball was a rubber ball with a tube attached which
was filled with Carbolic acid which is properly known as ‘phenol’, which enters
the respiratory system through the nostrils and flushes all the viruses. The
paper advertisement was telling to use the smoke ball for 2 weeks regularly
trice a day. The advert also said they have deposited £1000 in Alliance
Bank, Regent Street to show their sincerity in the matter.
Mrs. Louisa
Elizabeth Carlill, the Plaintiff of this case saw this paper advertisement and
purchased a one packet of Smoke Ball and used it as the directions from mid
November. But 17th January 1892 she had an attack of influenza. Her husband, who was a solicitor wrote to the
Smoke Ball Company, the Defendants explaining what happened and asking for the
money of £100 as they have promised in the advertisement. But the
Company refused to pay telling there was no contract to pay. Mr.Carlill,
husband of Plaintiff brought this case
to the court. The arguments of both side were heard and finally verdict was
given in favour of Mr.Carlill.
The Defendants were not happy with
the decision and the appealed. But the Court of Appeal rejected the arguments
of the Smoke Ball company and held there was a fully binding contract towards
Mrs.Carlill. Finally Mrs.Crlill received the compensation of £100.
2.0
RELEVANT LEGAL PRINCIPLES
According to Sir Frederick Pollock
a Contract is “A promise or set of promises which the law will enforce” as
reported on lawteacher.net(2012).
The agreement which binds the parties
together for the contract takes a very important place with its every
word.
The law of contract is a set of rules
governing the relationship, content and validity of an agreement between two or
more persons (individuals, companies or other institution) regarding the sale
of goods, provision of services or exchange of interests or ownership. While
this is a wide definition it does not cover the full ambit of situations in
which contract law will apply. The reason for this is due to the vast number of
examples in which contracts can arise in everyday life.
The Law of Contract is Defined with
four essentials.
1)
Offer
2)
Acceptance
3)
Intention to create legal relations
4)
Consideration
Definition
to Offer
An offer is an expression of
willingness to contract on certain terms, made with the intention that it shall
become binding as soon as it is accepted by the person to whom it is addressed,
the "offeree" [G.H. Tretel, The
Law of Contract, 10th edn, p.8].
Definition to Acceptance
“Acceptance
Acceptance of an offer means unconditional agreement to all the terms of that
offer. Acceptance will often be oral or in writing, but in some cases an
offeree may accept an offer by doing something, such as delivering goods in
response to an offer to buy. The Courts will only interpret conduct as
indicating acceptance if it seems reasonable to infer that the offeree acted
with the intention of accepting the offer.” (Groves
Definition to
Consideration
Consideration is an essential element for the formation of
a contract and may consist of a promise to perform a desired act or a promise
to refrain from doing an act that one is legally entitled to do. (Groves,
2004)
3.0 ANALYSIS
OFFER-:
In the case of Carlill V
Carbolic Smoke Ball Company the Offer was the Promise of paying £100 if
the Smoke Ball does not results properly. The Company Said it was not and
offer, but only a statement with a mere
puff. But the Judges rejected that point and decided it was not a mere puff
since the Smoke Ball Company Deposited £1000 in the Alliance
Bank, Regent Street. Judges also said depositing money in the bank is a way to
show their sincerity in paying £100 for whom got attack by influenza after
using the Smoke Ball according to the right directions.
ACCEPTANCE-:
Acceptance of the offer is
very important in the subject of Contracts. Usually Acceptance is being
notified in front of the parties of the contract or the agreement. To accept an
offer, a person need only follow the indicated method of acceptance. If the
offeror either expressly or impliedly intimates in his offer that it will be
sufficient to act without giving notice of acceptance, performance is
sufficient acceptance without notification. In the Court of Appeal the defense
council brought this point that there is no notified acceptance with
Mrs.Carlill. But the judges answer was there is no need of notified acceptance
to the offer because the Smoke Ball Company published their advertisement in
the news papers not telling any notified acceptance in this contract is
required.
CONSIDERATION-:
The third Essential of contract law,
Consideration is also highly spoken according to this case of Carlill V Carbolic
Smoke Ball Company. The court held that an advertisement is considered to be an
offer when it specifies the quantity of persons who are eligible to accept its
terms. If such an advertisement requires performance, the offeree is not
required to give notice of his performance. Although the defense council argued
that there was no consideration in the advertisement, the judges refused it
4.0 CONCLUSION
This Case,
Carlill V Carbolic Smoke Ball Company is a most frequently cited case where
unilateral contracts are concerned .Studying this case helps law students to
get a basic knowledge how the Law of Contracts is used and how it has to be
used in daily life and what are the principles of Contract Laws. According to
the points and arguments brought out from the council of defense were turned as
benefits to Mr. and Mrs.Carlill. Studying this case on surface or looking at
this matter in a human angle we can see that its good Mrs.Carlill, the plaintiff of this case got
justice for this matter. Two further features of offers to be noted are that
the terms of an offer must be clear and that the offer is made with the
intention that it should be binding. In connection with the latter requirement,
a further defense propounded in the Carlill case was that the
advertisement was a ‘mere puff’ and not intended to form the basis of a binding
agreement. Such ‘puffs’ are very much part of commercial life today,
particularly in the advertising industry. Clearly statements that allude to
certain soap powders ‘washing whiter than white’ or certain types of beers
working untold miracles are not intended to be taken seriously but to ‘puff up’
the propensities of the product to induce the all suffering public to buy. In the Carlill case the
allegation that the offer was a ‘mere puff’
was rejected on the basis that the advertisement also stated
that the defendants had
deposited £1,000 with
the Alliance Bank ‘ to show their sincerity’. It
was clear in this
case that this fact indicated that they
intended the promise to form the basis of a legal relationship. So far
everything presented is fairly straight forward, but unfortunately the
situation is not so simple. There are many types of statement which, on the
face of things, appear to be offers but in fact do not so comprise.
