Advertisements can constitute a valid offer, especially when they contain clear and specific promises or conditions that are intended to be acted upon by the public or specific individuals.
In a unilateral contract, acceptance is demonstrated through the performance of the specified condition rather than through a traditional verbal or written acceptance.
The defendant, Carbolic Smoke Ball Co, marketed a product called the "smoke ball" as a preventive measure against influenza. The company published advertisements in various newspapers, promising a reward of £100 to anyone who used the smoke ball according to their instructions and still contracted influenza.
Mrs. Carlill, the plaintiff, purchased and used the smoke ball according to the instructions provided. Unfortunately, she still caught the flu, and she claimed the £100 reward as advertised by the company.
Carbolic Smoke Ball Co, however, refused to pay the reward, arguing that the advertisement was merely a puff or a sales gimmick and not a serious offer to be bound by contract.
The Court of Appeal ruled in favour of Carlill, stating that a valid contract has arisen with the defendant for £100.
The court further emphasised that the advertisement was addressed to the public at large, inviting anyone who fulfilled the specified conditions (using the smoke ball as directed and still contracting influenza) to accept the offer and claim the reward. This illustrates the concept of a unilateral contract, where acceptance is not through a direct communication of acceptance but through the performance of the specified condition.
Defendant advertised his product saying that if one used it and still caught “the current epidemic of” influenza, he would give you £100 and to show his sincerity in the matter £1000 had been put in a bank account for this purpose.
Plaintiff caught influenza and sued Defendant for the £100.
CA held that the advertisement WAS an offer and Defendant had to pay.
Defendant tried to argue that the offer was too vague to be valid, in that it had no addressee and was not seriously intended as nobody would make an offer of this kind to the whole world. Finally it couldn’t be taken seriously because the offer had no time limit, which would make no sense from Defendant’s perspective.
We have to ask “how would an ordinary person, reading this document, construe it?” His answer is to take it at face value. He says that the offer was limited either to the duration of the “epidemic” or to the period of usage of the product. The advertisement was not a mere “puff” or “proclamation” because it was intended to be perceived by the public as an offer to be relied on (i.e. more people would buy the product having seen the advert). This shows that an intent to create legal relations is needed.
Because of the specific nature of the advertisement, it is to be treated as an offer (to all the world) and NOT mere invitation to treat, as most adverts are.
It is the law that an offeror can, explicitly or impliedly, dispense with the requirement to be notified of acceptance (even though such notification is usually required) e.g. cases of rewards for finding lost pets. In this case, the advert impliedly dispensed with notification.
There WAS consideration because Defendant got a sale in return for the offer. Is this true - what if Plaintiff would have bought the ball regardless of the offer?
Contract law notes fully updated for recent exams at Oxford and Cambrid...
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GDL Contract Law | Agreement Itclr And Capacity To Contract Notes (18 pages) |
Contract Law | Offer Acceptance Certainty Intention. Notes (9 pages) |