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Carlill V Carbolic Smoke Ball Co
(1892) 2 QB 484 : (1893) 1 QB 256 (CA)
Brief
(1892) 2 QB 484 : (1893) 1 QB 256 (CA)
Court – Court of Appeal
Date of Decision – 7 December 1893
Judges – Lindley, Bowen and AL Smith, JJ
Plaintiff – Carlill
Defendant – Carbolic Smoke Ball Co
Facts
In this case Carbolic Smoke Ball Co had manufactured and sold Carbolic Smoke Balls, the company had placed advertisements in numerous newspapers offering a reward of 100 pounds to any person who used the Carbolic Smoke Balls three times per day as per the directions given and if still contracted influenza, colds or any other disease.
After seeing the advertisement of the Company, Carlill purchased the smoke ball and used it as per the directions. After using the smoke ball Carlill still contracted influenza and hence made a claim for the reward. Carbolic Smoke Ball Co refused to pay the reward to Carlill, hence Carlill sued for damages which arose from Breach of Contract.
Issue
The issues which were raised were as follows:
- Was there any binding effect of the contract between the parties?
- Was the contract in question required for a formal notification of acceptance?
- Was Carlill required to communicate her acceptance of the offer to the Company?
- Was Carlill provided with any consideration in exchange for the reward of 100 pounds offered by the Company?
Held
Justice Lindley stated that one who makes an unilateral offer for the Sale of Goods by means of an advertisement impliedly waives off notification of acceptance if his purpose is to sell as much product as possible. The Hon’ble Court furthermore held that a person who makes an offer may decline to require a notice of acceptance if he or she wishes. The one who makes an offer dispenses with the requirement of notice of acceptance if the form of the offer shows that notice of acceptance is not required.
To accept an offer a person needs to only follow the method indicated of the acceptance. If the offeror either expressly or impliedly intimates in his or her offer that it will be sufficient to act without giving notice of acceptance but performance is sufficient acceptance without notification. The Hon’ble Court also held that an advertisement is considered to be an offer when it specifies the quantity of persons who are eligible to accept the terms.
If such an advertisement requires performance then the offeree is not required to give notice of his performance. The Court pointed to the Company’s claim in the advertisement that it had deposited 1000 pounds in Alliance Bank, which the court decided was intended to demonstrate the company’s sincerity in paying the said reward.
Concurring, Justice Bowen stated that notification of acceptance is required under our law and the person who makes the offer may dispense with notice to himself if he thinks it is desirable to do so. He may expressly or impliedly create any method of acceptance for his offer. An offeree needs to only follow the method indicated for acceptance. The requirement of notice of acceptance to the offeror must be determined by an objective reasonable person standard.
In relation to the advertisement, it seems that an inference may be drawn from the transaction itself and that person is not required to notify his acceptance of the offer before he or she performs the condition but that if he performs the condition then notification is dispensed with. We must look at the essence of the transaction and what the offeror is bargaining for under the circumstances, under these facts the defendant impliedly indicated that it did not require notification of acceptance of the offer.
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