Carlill v. Carbolic Smoke Ball Co. (1893) — Advertisements as Offers & Unilateral Contracts
Primary: Carlill v. Carbolic Smoke Ball Co.; advertisements as offers; unilateral contract; acceptance by performance
Secondary: intention to create legal relations; reward cases; consumer protection
Quick Summary
The Court held that the company’s advertisement was a binding offer to the world. Anyone who used the smoke ball as directed and still got influenza accepted the offer by performance. The deposit of £1000 showed a clear intention to create legal relations.
- Some ads can be offers, not just invitations.
- Acceptance can be by doing the act—no notice needed.
- Serious words + actions (deposit) = legal intent.
Issues
- Did the advertisement amount to an offer?
- Does performance of conditions count as acceptance?
- Was there an intention to create legal relations?
Rules
- An advertisement can create a unilateral contract if it is clear, definite, and shows an intention to be bound.
- Acceptance is complete by fulfilling the stated conditions; no separate communication is needed unless asked for.
- Intention is judged from words and actions (like depositing money).
Facts — Timeline
Optional
The Product & the Promise
Company markets a “smoke ball” to prevent/cure influenza and prints an ad promising £100 if users still catch flu after proper use.
Showing Serious Intent
Company deposits £1000 with a bank to show the promise is genuine.
Use & Illness
Mrs. Carlill uses the product as directed for a period and still gets influenza.
Claim & Silence
She claims £100. The company does not pay. Litigation follows.
Arguments — Appellant vs Respondent
Mrs. Carlill (Plaintiff)
- The ad was a clear offer to anyone who performed the conditions.
- She accepted by performance and is entitled to £100.
- Deposit of £1000 proves serious intention.
Company (Defendant)
- Ad was mere puff or invitation to treat, not a legal offer.
- No notification of acceptance was given.
- Terms were too vague to enforce.
Judgment
In Favour of Plaintiff
The Court held the ad was a unilateral offer. Acceptance was complete when Mrs. Carlill used the product as directed and still fell ill. The £1000 deposit showed legal intent, not sales puff. The company was bound to pay the £100 reward.
Ratio Decidendi
- Reward ads can form unilateral contracts.
- Acceptance by performance—no prior notice needed.
- Objective test: words + actions show legal intent.
Why It Matters
The case protects consumers and clarifies marketing promises. Where an ad is clear, specific, and serious, a company can be legally bound. It also explains how acceptance by conduct works.
Key Takeaways
- Ads can be offers when definite.
- Acceptance can be by doing the required act.
- Objective test for intention.
- Deposits & clear words show seriousness.
- Vagueness weakens enforceability.
- Reward posters are classic unilateral offers.
Mnemonic + 3-Step Hook
Mnemonic: “ADO” — Ad • Do • Obligation
- Ad: Clear reward ad with legal intent.
- Do: Perform the condition = acceptance.
- Obligation: Promisor must pay the reward.
IRAC Outline
Issue
Did this advertisement create a binding offer, accepted by using the product as directed?
Rule
A definite reward ad can be a unilateral offer; acceptance occurs by performance; intention judged objectively.
Application
Clear promise, £1000 deposit, and Mrs. Carlill’s use as directed show offer, intention, and acceptance by conduct.
Conclusion
Enforceable unilateral contract; company liable to pay the reward.
Glossary (Easy English)
- Unilateral Contract
- A promise in return for an act (e.g., rewards). Contract forms when the act is done.
- Invitation to Treat
- A call to negotiate (like a catalogue). Not an offer.
- Acceptance by Conduct
- Agreeing to a contract by doing what the offer asks for.
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