Contract Law

A newspaper advert was placed which stated: £100 reward paid by Carbolic Smoke Ball Company to any persons who contracts the influenza after having used the ball 3 times daily for 2 weeks according to the printed directions supplied with each ball. £1000 was deposited with the Alliance Bank demonstrating their sincerity on the matter. 

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Mrs Carlill purchased some smoke balls and used them according to the directions and caught the flu. She sought to claim the stated £100 reward. The defendant raised the following arguments to demonstrate the advertisement was a mere invitation to treat rather than an offer: reward as the advert constituted an offer of a unilateral contract which she had accepted by performing the conditions stated in the offer. The court rejected all the arguments put forward by the defendants for the following reasons:

1. The statement referring to the deposit of £1,000 demonstrated intent and therefore it was not a mere sales puff.
2. It is quite possible to make an offer to the world.
3. In unilateral contracts there is no requirement that the offeree communicates an intention to accept, since acceptance is through full performance.
4. Whilst there may be some ambiguity in the wording this was capable of being resolved by applying a reasonable time limit or confining it to only those who caught flu whilst still using the balls.
5. The defendants would have value in people using the balls even if they had not been purchased by them directly.

1. The advert was a sales puff and lacked intent to be an offer.
2. It is not possible to make an offer to the world.
3. There was no notification of acceptance.
4. The wording was too vague to constitute an offer since there was no stated time limit as to catching the flu.
5. There was no consideration provided since the 'offer' did not specify that the user of the balls must have purchased them. 

The Court of Appeal held that Mrs Carlill was entitled to the