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Carlill v. Carbolic Smoke Ball Co. Court of Appeal [1893] Q.B. 256 (C.A.).

Facts The appellant published an advertisement promising to pay 100 to any person who contracted influenza after using their product Carbolic smoke balls three times a day for two weeks. Ms. Carlill used the balls as specified and made a claim on the good faith of the advertisement after contracting influenza. After the appellant refused to pay her claim, she sued for breach of contract and won. The appellant was ordered to pay Ms. Carlill 100. The appellant has appealed this decision to the Court of Appeal. Issues Is the Carbolic Smoke Ball advertisement which was made for promotional purposes to the entire public a legitimate contractual offer? Can the performance of the conditions stipulated in the advertisement by Ms. Carlill be taken as valid acceptance of the offer instead of notification before performance usually required by English law? Is there any consideration between Ms. Carlill and Carbolic Smoke Ball Co. in this matter? Decision: Appeal dismissed Holding The Court held that the advertisement was a legitimate offer and not a mere puff and that the language was not too vague to construe a legitimate offer. It upheld the principle of unilateral contacts where an offer can be made to the whole world but a contract would only be made with those persons fulfilling the conditions of the offer. The Court also held that performance of terms could qualify as acceptance because the language of the advertisement never expressly asked for notification of acceptance apart from performance and this precedent was set in Brogden v Metropolitan Ry. Co. 2 App. Cas. 666, 691. Consideration existed because the advertisement produced for the appellant the benefit of increased sales while the plaintiff would have suffered the inconvenience of purchasing the product and using it three times a day for two weeks. The Court decided that since The Carbolic Smoke Co. by depositing 1000 with Alliance Bank as proof of their sincerity in the matter and Ms. Carlill by completing the requisite terms had both demonstrated an intention to create legal restrictions.

Conclusion The Court considered the four elements of a contract: offer, acceptance, consideration and an intention to create legal restrictions and it was determined that a valid contract existed between the parties and therefore Carbolic Smoke Ball Co. was legally required to uphold their promise to pay 100 to Ms. Carlill.