⚖️ Carlill v. Carbolic Smoke Ball Co. [1891-4] All ER 127: Case Summary ⚖️

A landmark case on unilateral contracts and acceptance by performance

📌 Introduction

This landmark case established that advertisements can create legally binding contracts when they include clear terms and intent.

📜 Facts

The Carbolic Smoke Ball Co. advertised their product as a cure for illnesses and promised £100 to anyone who used it as directed and still got sick.
The ad mentioned £1,000 deposited in a bank to show their seriousness.
Mrs. Carlill used the product as directed but contracted influenza.
She claimed £100, but the company refused, arguing the ad wasn’t an offer, and no notification of acceptance was provided.
The trial court ruled in her favor; the company appealed.

⚖️ Legal Issues

Was the advertisement a binding legal offer?
Did Mrs. Carlill’s actions constitute acceptance?
Was notification of acceptance necessary?
Was there sufficient consideration?

🏛️ Court Observations

General Offer: The ad was a unilateral offer made to the public. Anyone fulfilling the conditions accepted the offer, with no need for notification.
Acceptance by Performance: Mrs. Carlill’s use of the product as instructed constituted acceptance.
Intention to Create Legal Relations: The deposit of £1,000 in a bank showed the company’s intent to be legally bound.
Consideration: Mrs. Carlill’s purchase and use of the product benefited the company, constituting valid consideration.

⚖️ Judgment

The court dismissed the company’s appeal and ordered payment of £100 to Mrs. Carlill. The advertisement was a binding offer accepted by performance.

📖 Relevance to Indian Contract Act, 1872

Section 2(a): Proposal (offer) requires an intent to obtain assent.
Section 2(b): Acceptance is signified by performance of terms, forming a promise.
General Offer: Offers made to the public can be accepted by anyone performing the specified conditions.

🔍 Conclusion

This case clarified that clear advertisements with intent to create legal obligations are binding offers. Acceptance by performance and valid consideration make such offers enforceable, forming a contract.

📝 Legal principles made easy for better understanding! ⚖️