Authored By: Ishan Sharma
Gurugram University
INTRODUCTION
Carlill Smoke Ball case was a landmark case of English law in contract law, which established the principle of unilateral contract[1]. The full name of the case was louissa Carlill v Carbolic Smoke Ball Company, which gives knowledge about what are the different types of contracts where the acceptance of a contract should be implied or expressed. Advertisement[2] company show their advertisement to create trust among customers if any customer suffers a loss, the company will pay damages to him.
FACT OF THE CASE[3]
The carbolic smoke ball company advertised in the Pall Mall Gazette in 1891 that the carbolic smoke ball was a cure for influenza and other cough-related problems. The product was made with rubber with an attached tube filled with carbolic acid. Plaintiff Carlill saw the advertisement and developed an interest in purchasing that smoke ball during that period, many European countries were affected by influenza disease. In the advertisement, the defendant promised that if anyone was again infected with influenza, the company would pay 100 pounds, which was deposited into the alliance bank, showing seriousness towards the contract. Carlill believed in the advertisement and purchased the smoke ball, but unfortunately, she was infected with influenza.
After this incident occurred, the plaintiff’s husband wrote a letter to the company that his wife’s health was not well despite using a carbolic smoke ball. The husband claims the amount from a company that he promised to pay.
LEGAL ISSUE[4]
- Whether there was a binding contract?
- Whether formal notification of acceptance necessary?
- Whether Mrs Carlill need to communicate their acceptance?[5]
- Whether Is there any kind of consideration in the contract?
CONTENTIONS OF THE PARTIES
Argument of Plaintiff [6]
The plaintiff contended that the advertisement was not vague, which creates a legal obligation towards the company if any purchaser is again infected with influenza, so the company must pay the amount and company assure their users that they will deposit the amount of 100 pounds in alliance bank that creates trust among purchaser.
Thus, the intention of the company to form an agreement was evident in the case. The plaintiff contended that there was a consideration in the form of the sale of the product along with the money paid by the plaintiff to buy the smoke ball.
DEFENDANT ARGUMENT[7]
The defendant contended every argument that proved the plaintiff’s suit wrong and prevented him from liability. The defendant gives the following arguments:
- The defendant contended that there is no formal binding contract between the parties. The company has no intention to make a contract advertisement published in the newspaper as a market strategy to boost the sales of the product, and there is no promise made by the parties.
- Secondly, they also said that the plaintiff did not provide any kind of consideration and that merely doing an act privately does not make acceptance of an offer, which is crucial for a valid contract.
- Thirdly, they argued, in the alternative, that if the court found there to be a contract, that contract was no more than a wagering contract in which liability was purely determined on one issue, whether the plaintiff caught influenza or not, in which case it would be void.
JUDGEMENT
Historical Judgement was delivered by three judges bench, which includes Justice Lindley, Justice Bowen and Justice Smith, which gives their observation on the contentions of the parties. The court of appeal ruled in favour of the plaintiff, Mrs. Carlill.[8]
Justice Lindley Observation[9]
Justice observed that there is an express promise to a contract between parties because the company will promise to the purchaser that if anyone is again infected with influenza, the company will pay 100 pounds, and they already deposited the amount of 1000 pounds in the alliance bank which is sufficient to show sincerity towards the contract.
He also observed that the promise made by the company was binding even though there was no specific individual at the receiving end of the same. It is a general offer which any person will accept if they full fill the term and conditions of the advertisement.
Justice further explained that there is consideration exist in the contract when the company gain profit from the sales of carbolic balls. The advertisement is not vague in nature language of the advertisement showing the intention of the company to make an offer to the general public.
Justice Bowen Observation[10]
Justice Bowen agrees with the observation of Justice Lindley and said that there is a general offer that is open to the public at large. Anyone can accept the offer that becomes a contract all the essential elements exist when we examine the advertisement. There is a proper consideration for parties.
Justice AL Smith Observation.
Justice Al Smith, [11]agreed with the observation of Justice Lindley and contended further that the agreement was not mere puff deposition in 1000 pounds in the bank sufficient to enter into a contract with anyone who performed the specific conditions.
- The advertisement was not a unilateral offer that is open to the whole world if anyone accepts the condition of the advertisement so, they shall enter into a contract.
- That purchasing or merely using the smoke ball constituted valid consideration for the company and the party that accepted the offer.
- The company’s claim that £1000 was deposited at the Alliance Bank showed the serious intention to be legally bound.
ANALYSE ARGUMENTS
From the point of view of the defendant that there is no contract exists between parties because the essential elements of a valid contract are missing, which is mentioned in the Indian Contract Act 1872:
- Acceptance: it must be necessary to accept the offer by the parties expressly or in an implied matter.
- Consideration means when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, something such as an act or abstinence or promise is called consideration, in simple words, consideration refers to something in return.
- The court clearly explained that the advertisement was not mere puff, which was alleged by the defendant since the company deposited money in an alliance bank, showing the company was sure that they would enter into a contract.
- Was there a unilateral contract between the parties?[12]
- A general offer is known as a Unilateral contract, an offer made to the world at large where the communication of the offer is not required anyone who accepts the conditions of the contract in an implied way that considered offer would be accepted. However, the advertisement is considered to be a unilateral contract between parties.
Significance of Jugement [13]
Carlill versus Carbolic was a landmark judgement of contract law where an advertisement of a company creates a legal contract between the parties, also given the concept of unilateral contract where the party shows their presence in the contract while they accept it. It is authority for the proposition that an inconvenience sustained by the offeree with the consent of the offeror may be sufficient consideration. Finally, it demonstrates that it is difficult to rebut the presumption that the parties intend to be legally bound by commercial or business agreements.
CONCLUSION[14]
The case of Carlill v. Carbolic Smoke Ball Company is frequently cited in contract law, which gives the concept of a unilateral contract. The court of law dismissed the appeal of Carlill Smoke Ball company because they were unable to prevent him from liability, many advertisements came on the market only to mislead customers, and that landmark case gave their effect on consumer protection [15]companies will not make this kind of advertisements again. In Carlill’s case, things were similar every essential element of the contract was fulfilled, which creates a legal binding between the parties who accept the offer. The plaintiff of this case, Mrs Carlill, was awarded 100 pounds as the promise made by a company that they would pay compensation if any customer was again infected with influenza. The case highlights the importance of intention and clarity where the company language of advertisement signifies that they willingly agree to make a contract, when the company deposited 1000 pounds in the alliance bank, they showed their intention was sincere towards the contract also, the judge’s observation was the same. The court of law will clarify that acceptance is complete when the claimant purchases the product and accepts the conditions of the advertisement. Apart from that, the case helps us to understand the basic element of a normal contract as this is a case of exception of these principals owning lack of need for acceptance of offer and consideration in a general sense. The court clarified that there are different types of offers, in the carbolic case, there is a general offer that exists where any person can accept it and come into the purview of the contract.
Reference(s):
[1] Introduction: Jain A and Simpson, A. W. B., “CASE ANALYSIS: CARLILL VS. CARBOLIC SMOKE BALL CO,” vol 2 (2023) <https://jlrjs.com/wp-content/uploads/2023/10/137.-Aakriti-Jain.pdf?utme>
[2] Aakriti Jain and Simpson, A. W. B., “CASE ANALYSIS: CARLILL VS. CARBOLIC SMOKE BALL CO,” vol 2 (2023) <https://jlrjs.com/wp-content/uploads/2023/10/137.-Aakriti-Jain.pdf?utme>.
[3] “Carlill v Carbolic Smoke Ball: A Case Study” <https://www.contractsandagreements.co.uk/carlill-v-carbolic-smoke-ball-case-study.html>
[4] Sehgal DR, “Carlill vs. Carbolic Smoke Ball Company (1892)” (iPleaders, September 8, 2024) <https://blog.ipleaders.in/case-analysis-carlill-v-carbolic-smoke-ball-co/#Facts_of_the_case>
[5] Malviya K, “Carlill v. Carbolic Smokeball Case: Enforcing Unilateral Contracts” (CLATalogue, October 20, 2024) <https://lawctopus.com/clatalogue/clat-pg/carlill-v-carbolic-smokeball-case/>
[6] ibid.
[7] “CASE ANALYSIS: CARLILL VS. CARBOLIC SMOKE BALL CO,” vol 2 (2023) <https://jlrjs.com/wp-content/uploads/2023/10/137.-Aakriti-Jain.pdf?utme>
[8] Diganth Raj Sehgal, “Carlill vs. Carbolic Smoke Ball Company (1892)” (iPleaders, September 8, 2024) <https://blog.ipleaders.in/case-analysis-carlill-v-carbolic-smoke-ball-co/#Facts_of_the_case>.
[9] Ibid
[10] Ibid
[11] “Carlill v. Carbolic Smoke Ball Co. Law Library | Digital Exhibits” <https://lawlibrarycollections.umn.edu/classic-cases-contract-carlill-v-carbolic-smoke-ball-co>
[12] ibid.
[13] Carlill v Carbolic Smoke Ball Co, “Carlill v Carbolic Smoke Ball Co” (1892) legal case <https://www.johnwiley.com.au/highered/blaw/content110/case_summaries/carlill_vs_carbolic.pdf>
[14] “CASE ANALYSIS: CARLILL VS. CARBOLIC SMOKE BALL CO,” vol 2 (2023) <https://jlrjs.com/wp-content/uploads/2023/10/137.-Aakriti-Jain.pdf?utme>
[15] “Carlill vs. Carbolic Smoke Ball Company (1892)” (iPleaders, September 8, 2024) <https://blog.ipleaders.in/case-analysis-carlill-v-carbolic-smoke-ball-co/#Facts_of_the_case>
