Carlill v. Carbolic Smoke Ball Co.
A general offer made to the world at large may be accepted by performing the conditions stated in it, and communication of acceptance is not required where the offer dispenses with it.
Citation
Carlill v. Carbolic Smoke Ball Co.
[1893] 1 QB 256
- Court
- Court of Appeal
- Statute
- Contract law — offer and acceptance
Facts, issue and held
Facts
The company advertised that it would pay £100 to any person who contracted influenza after using its smoke ball three times daily for two weeks in the manner directed. The advertisement added that £1,000 had been deposited with the Alliance Bank to show the company's sincerity in the matter. Mrs Carlill purchased a smoke ball, used it as directed, and nonetheless contracted influenza. She sued for the £100. The company argued that the advertisement was a mere puff, that an offer could not be made to the world at large, that acceptance had never been communicated, and that there was no consideration.
Issue
Whether the advertisement constituted a binding offer capable of acceptance by conduct, and whether a contract had come into existence without any communication of acceptance to the company.
Held
The Court of Appeal held that the advertisement was a valid offer to the world at large and not a mere puff, and that Mrs Carlill had accepted it by performing the stipulated conditions. The reference to the deposit with the bank demonstrated an intention to be legally bound. Communication of acceptance was unnecessary because the nature of the offer dispensed with it. She was entitled to the £100.
- An offer may be made to the world at large; the contract is formed with whoever comes forward and performs the conditions.
- In a unilateral offer of this kind, performance of the stipulated act is itself the acceptance, and prior notification is not required.
- The deposit of £1,000 with a named bank negated the argument that the statement was a mere advertising puff, and showed an intention to create legal relations.
- Consideration was present in the inconvenience of using the smoke ball as directed, and in the benefit to the company from the resulting sales.
Ratio decidendi
Ratio decidendi
A general offer may be accepted by performing the conditions it prescribes, without communicating acceptance, and such performance creates a binding contract with the person who performs.
Why it matters
The leading case on general offers, unilateral contracts and intention to create legal relations. It is the standard illustration in almost every discussion of these three topics.
Current standing
The principle is reflected in Indian law through the Indian Contract Act, 1872 — notably in the provisions on communication of acceptance and acceptance by performance of conditions, and in the illustration of a general offer through the reward cases.
Using it in an answer
In Carlill v. Carbolic Smoke Ball Co. [1893] 1 QB 256, the Court of Appeal held that an advertisement promising a reward on stated conditions is a general offer to the world at large, that performance of those conditions constitutes acceptance, and that communication of acceptance is unnecessary where the offer dispenses with it.
Applying that principle, the announcement in the present case amounts to a general offer, and the claimant accepted it by doing what the announcement required.
A binding contract therefore came into existence on performance, and the offeror is liable to pay the promised sum.
In the exam
The single most frequently cited case in Foundation Business Laws. It is the authority for three separate points — general offer, acceptance by performance, and intention to create legal relations — so identify which one the question is actually testing before you write.
Related cases
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Talk to usCan an offer really be made to the whole world?
Yes. An offer may be addressed to the world at large, but the contract itself arises only with the particular person who steps forward and performs the stated conditions. That is why reward advertisements for lost property are enforceable by the finder.
Why was communication of acceptance not required here?
Because the offer, by its nature, dispensed with it. Where an offeror invites acceptance by conduct — do this and I will pay — he impliedly waives notification, since requiring every user to write in first would defeat the purpose of the offer.
Please note
These summaries are prepared for CA exam preparation and are not legal advice. Case law develops — a decision may be distinguished, read down or superseded by later judgments or by legislative amendment. Verify the current position against ICAI's study material for your attempt and against the reported judgment before relying on any principle stated here.
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