Case Summary - Carlill V Carbolic Smoke Ball Company [1892] EWCA Civ 1

Facts

The Carbolic Smoke Ball Company advertised their product as a cure for influenza. The advertisement stated that the company would pay £100 to anyone who contracted influenza after using the smoke ball as directed.

Mrs Carlill purchased a smoke ball and used it as directed, but she still contracted influenza. She sued the Carbolic Smoke Ball Company for £100.

Legal principles 

An advertisement can be considered an offer if it is clear, unambiguous, and intended to be taken seriously. The fact that an advertisement is puffery – exaggerated or misleading – does not mean that it is not an offer.

A person who makes an offer in an advertisement can withdraw it at any time before it is accepted. A person who takes up an offer in an advertisement can enforce it, even if the offer is made to the world at large.

The standard of care required of a person who makes an offer in an advertisement is that of a reasonable person in the same circumstances.

Decision

The Court of Appeal held that the Carbolic Smoke Ball Company's advertisement was an offer and that Mrs Carlill had accepted the offer by using the smoke ball as directed. The court also found that the company had not withdrawn the offer before Mrs Carlill contracted influenza.

More recent cases 

Carlill v Carbolic Smoke Ball Company has been cited and followed in many subsequent cases, even where the facts differ. Some examples include:

·        Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401: Boots is a self-service shop selling drugs and medicines, the sale of many of which require supervision under s 18(1) of the Pharmacy and Poisons Act 1933. The case turned on whether the customer made an unsupervised purchase by putting an item in their basket, or a supervised purchase when they paid the pharmacist. The Court of Appeal held that the customer made an offer when arriving at the till, which was accepted when payment was taken. This was aided by the fact that the customer could have returned the item to the shelf before payment if they chose to.

·        Esso Petroleum Co. Ltd v Commissioners of Customs and Excise [1975] UKHL 4: Esso ran a promotion where customers would receive commemorative coins when purchasing fuel. The Customs and Excise Commissioners argued that the coins were subject to purchase tax. The court decided that for a contract of sale to exist, there must be a transfer of goods for a monetary consideration. In this case, the coins were not given in return for money but formed part of the sale of the petrol. 

·        Soulsbury v Soulsbury [2007] EWCA Civ 969: Mrs Soulsbury agreed to stop receiving periodical payments from her ex-husband on the agreement that he left her £100,000 in his will. By marrying his second wife a few hours before his death, the will containing the gift was invalidated. The court decided that Mrs Soulsbury had taken up the offer by allowing the cessation of periodical payments and was, therefore, entitled to the money from the estate. 

Significance

Carlill v Carbolic Smoke Ball Company is a landmark case in the law of contract and contract formation. It has been cited and followed in many subsequent cases and serves as a reminder that advertisements can be legally binding.