Carlill v. Carbolic Smoke Ball Co.

The Carbolic Smoke Ball Company published newspaper advertisements claiming that anyone who used their smoke ball product three times daily for two weeks and still contracted influenza would receive 100 pounds. The company stated it had deposited 1,000 pounds with a bank as proof of its sincerity. Mrs. Carlill purchased the smoke ball, used it as directed for two weeks, and subsequently contracted influenza. When she claimed the reward, the company refused to pay.

The court, through opinions by Lindley, Bowen, and Smith LJJ, rejected several defenses raised by the company. The company argued the ad was too vague to be an offer, but the court found its terms were sufficiently definite, particularly because the company deposited 1,000 pounds to demonstrate sincerity. The company argued that acceptance must be communicated, but the court held that in unilateral contracts, the offeror waives the need for communication of acceptance by requesting performance rather than a return promise. The company argued there was no consideration, but the court found that the inconvenience of using the smoke ball as directed constituted a detriment to Mrs. Carlill and a benefit to the company, whose product received publicity and use. Lord Justice Bowen offered the famous analogy of the finder's reward: if someone offers a reward for a lost dog, the offer is made to the world, and anyone who finds the dog accepts by performing.

Carlill has had an enormous influence on contract law across the common law world. It established the framework for analyzing unilateral contracts that is still used today, including the rules that performance constitutes acceptance and that notice of acceptance may be waived. The case is also important for advertising law, distinguishing between binding offers and mere puffery. Its principles have been applied to reward offers, contests, insurance contracts, and modern clickwrap agreements.