The case at a glance

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 (Court of Appeal). Holding: an advertisement can constitute a unilateral offer to the world, accepted by performance of its conditions; the deposit of money demonstrated intention to be bound.

The story

At the height of a Victorian influenza epidemic, the Carbolic Smoke Ball Company advertised that it would pay £100 to anyone who used its smoke ball as directed, three times daily for two weeks, and nevertheless caught influenza — adding, magnificently, that £1,000 had been deposited with the Alliance Bank “shewing our sincerity in the matter”. Mrs Louisa Carlill used the ball exactly as directed. She caught influenza. The company declined to pay, deploying every defence Victorian ingenuity could draft: mere puff, no offer to anyone in particular, no notified acceptance, no consideration.

The question

Can a promise made to the whole world in an advertisement bind the advertiser as a contract with the person who performs its conditions?

The decision

The Court of Appeal held for Mrs Carlill on every point. The bank deposit made the promise no mere puff but an offer intended to be acted upon; an offer may be made to the world at large and ripens into contract with those who perform its conditions; in a unilateral offer, notification of acceptance is waived and performance itself is acceptance; and Mrs Carlill’s inconvenience in using the ball — together with the benefit to the company of increased sales — was ample consideration.

Why it still matters

Carlill remains the standard authority on unilateral contracts and intention to create legal relations, cited wherever the common law of contract is taught or argued — and it polices modern advertising: promotions, reward offers and prize schemes are drafted today by lawyers looking nervously over their shoulders at Mrs Carlill. Few cases teach so many doctrines in one story, and none teaches them so entertainingly.