Contract Law

Carlill vs. Carbolic Smoke Ball Company 1893

1. Facts:
- In 1893, Carbolic Smoke Ball Company advertised a 100 pound reward for anyone who
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used its Smoke Ball in accordance with its instructions, but caught influenza.
To show the companys sincerity, 1000 pounds was deposited in the Alliance Bank,

Regent Street.
Louisa Elizabeth Carlill, better known as Mrs. Carlill, purchased and used the Smoke

Ball as directed, and then later contracted the Influenza virus.

However, the company refused to pay her as the offer was mere marketing puff, and

not intended to have any basis in the law of contract.

This matter was taken to court and Mrs. Carlill won the case.

2. Decisions:
- The court stated that the advertisement was an offer that could be made to the whole
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world, and anyone hearing the offer could accept it.

The court viewed the deposited 1000 pounds as the companys intention to create legal
relations and pay any claims, ergo rejecting their claim that it was an advertising

gimmick.
Use of the product was sufficient consideration in a unilateral contract (a contract in

which one party has obligations but the other does not) like this.
Mrs. Carlill had a valid contract.

The contractual elements discussed in this case have since been used in all cases when
determining the formation of a unilateral contract.