Executive Briefing on Carlill v Carbolic Smoke Ball Company Case - Law

This report provides an executive briefing on the landmark case of Carlill v. Carbolic Smoke Ball Company [1892] EWCA Civ 1, a crucial case in contract law. The case involved the Carbolic Smoke Ball Company's advertisement promising a reward to anyone who contracted influenza after using their product as directed. Mrs. Carlill, having used the smoke ball as prescribed and still contracting the flu, sued the company for the promised reward. The report summarizes the facts, the arguments presented by both sides, and the court's ruling, which found the advertisement to be a binding unilateral contract. The analysis highlights the case's significance for businesses, especially concerning unilateral contracts and the implications of refusing to honor offers made in advertisements. The report also touches on how such rulings can affect various industries, like insurance, which offer compensation based on specific conditions. This analysis is valuable for students studying business law and contract law, offering insights into legal precedents and their practical implications. The case underscores the importance of clear communication and the binding nature of offers made to the public.

Running head: FUNDAMENTALS OF BUSINESS LAW
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Fundamentals of business law
Name
Institution

Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1. The carbolic smoke ball
company used to make smoke balls which they claimed cured a number of diseases including the
flu and influenza. The smoke ball was made up of a rubber ball that was filled with carbolic acid
and had a rubber tube attached to it. It was presumed to work by flushing viral infections from
the users’ nose after the tube was inserted into it and the acid blown into it. The smoke ball’s
advertisements guaranteed success, and they even offered to pay 100 Euros to any person who
used the smoke ball as prescribed and still contracted influenza later.
Mrs. Louisa Elizabeth Carlill purchased the smoke ball and used it according to the
instructions that were given, i.e., three times daily. Though the advertisement said that the ball
was to be used for two weeks to ensure that one did not contract influenza, Mrs. Carlill used it
for two months and finally contracted the disease. Her husband sent two letters to the company,
claiming the 100 Euros that had been advertised, but his letters went unanswered. When he send
the third letter, the company wrote back an anonymous letter, shielding themselves from any
responsibility claiming that if the smoke ball had been used properly they had complete
confidence that it would work. They then asked her to report to their offices daily for two weeks
to use the smoke ball and be checked by their secretary to be sure (Books, 2011).
Mrs. Carlill thus took the matter to court, and argued that the company had to pay, since the
company’s advertisement acted as a contract between them and her. The company defended
itself by saying that the advertisement was not a serious contract (Jackson, 2018).
When the carbolic smoke ball company lost their argument they took the case to the court of
appeal. There the judges unanimously agreeing that the advertisement was a binding contract and
they owed Mrs., Carlill 100 Euros. They judges at the court gave the reason that the contract
involved the company and those who followed the instructions that were given, and not the

whole world. This meant that following those instructions would mean that the person accepted
the offer, and more people were buying the product while relying on the advertisement (Books,
2011).
This court case is used by companies in relation to unilateral contracts, and provides a perfect
example of how contracts can affect people’s daily lives. Businesses are mainly affected by this
type of contracts when they refuse to pay the sum that was offered. These types of contracts tend
to favor the offerer since they are only required to follow the instructions and most of the time
businesses end up losing these cases in court.
Insurance companies offer compensation to people if they lost or damaged their property in a
specific way. This is an example of a unilateral contract that can affect it. If a person was to lose
their property and the insurance company refused to compensate them then the company would
be affected by the case ruling.

REFERENCES
Case
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
Other resources.
Books, H. (2011). Articles on Lord Lindley Cases, Including: Carlill V Carbolic Smoke Ball
Company, Taff Vale Railway Co V Amalgamated Society of Railway Servants, Park.
Books, L. (2011). English Contract Case Law: Carlill V Carbolic Smoke Ball Company,
Addis V Gramophone Co Ltd, Liverpool City Council V Irwin, Attorney General of Belize V
Belize Telecom Ltd, Butler Machine Tool Co Ltd V Ex-Cell-O Corp Ltd. Books LLC, Wiki
Series.
Jackson, N. (2018). Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256. Law Trove.
doi:10.1093/he/9780191866135.003.0004