Judgments

The Court of Appeal unanimously rejected the company's arguments and held that there
was a fully binding contract for 100 with Mrs. Carlill
Among the reasons given by the three judges were
(1) That the advertisement was a unilateral offer to the entire world
(2) The satisfying conditions for using the smoke ball constituted acceptance of the offer.
(3) That purchasing or merely using the smoke ball constituted good consideration,
because it was a distinct detriment incurred at the behest of the company and,
furthermore, more people buying smoke balls by relying on the advert was a clear benefit
to Carbolic
(4) That the company's claim that 1000 was deposited at the Alliance Bank showed the
serious intention to be legally bound.
The judgments of the court were as follows.
Lindley.L.J:
He dismissed the appeal. He, giving his decision first and reasons later, explained his
judgment answering to all allegations put up by the defendants counsel and upholding
the lower courts decision. An excerpt which makes a short shrift of the insurance and
wagering contract that were dealt with in the Queens Bench
I will begin by referring to two points which were raised in the Court below. I refer to
them simply for the purpose of dismissing them. First, it is said no action will lie upon
this contract because it is a policy. You have only to look at the advertisement to dismiss
that suggestion. Then it was said that it is a bet. Hawkins, J., came to the conclusion that
nobody ever dreamt of a bet, and that the transaction had nothing whatever in common
with a bet. I so entirely agree with him that I pass over this contention also as not worth
serious attention.
Then, what is left? The first observation I will make is that we are not dealing with any
inference of fact. We are dealing with an express promise to pay 100 in certain events.
Read the advertisement how you will, and twist it about as you will, here is a distinct
promise expressed in language which is perfectly unmistakable
100 reward will be paid by the Carbolic Smoke Ball Company to any person who
contracts the influenza after having used the ball three times daily for two weeks
according to the printed directions supplied with each ball."
He discussed the following issues with respect to this case:

The advertisement was not a mere puff" as had been alleged by the defendant. The very
fact that 1000 was deposited with Alliance Bank, Regent Street. So what is that money
for? What is that passage put in for, except to negative the suggestion that this is a mere
puff, and means nothing at all? The deposit is called in aid by the advertisers as proof of
their sincerity in the matter. What do they mean?-The advertisement definitely means
seriousness.
The advertisement was an offer to the world. It was contended that it is not binding. It is
said that it is not made with anybody in particular. In point of law this advertisement is an
offer to pay 100 to anybody who will perform these conditions, and the performance of
the conditions is the acceptance of the offer.
Communication of acceptance is not necessary for a contract when people's conduct
manifests an intention to contract. But then the defense council put forth a point
Supposing that the performance of the conditions is an acceptance of the offer, that
acceptance ought to have been notified." Unquestionably, as a general proposition, when
an offer is made, it is necessary in order to make a binding contract, not only that it
should be accepted, but that the acceptance should be notified. But in cases of this kind, it
is apprehended that they are an exception to the rule that the notification of the
acceptance need not precede the performance. This offer is a continuing offer. It was
never revoked, and if notice of acceptance is required, then the person who makes the
offer gets the notice of acceptance contemporaneously with his notice of the performance
of the condition before his offer is revoked.
The defense counsel has argued that this advertisement is a nudum pactum that there is
no consideration. They say it is of no advantage to them how much the ball is used". The
judged answered The answer to that I think is this. It is quite obvious that, in the view of
the defendants, the advertisers, a use of the smoke balls by the public, if they can get the
public to have confidence enough to use them, will react and produce a sale which is
directly beneficial to them, the defendants. Therefore, it appears to me that out of this
transaction emerges an advantage to them which is enough to constitute a consideration."
But there is also another view to this point which the Judge Lindley aptly asserts: what
about the person who puts himself/ herself in an inconvenient, if not detrimental to his
health, while inhaling potent fumes of carbolic gas? So therefore there is ample
consideration to this promise.
Bowen, L.J:
He concurred with Lindley, L.J. He was of the same opinion but he also discussed few
points with respect to vagueness and time period of the contract. His opinion was more
tightly structured in style and frequently cited.
In response to Defenses council point that this contract is too vague to be enforced. He,
dismissing their claim, relied on his construction of the document and he said that there is
no time limit fixed for catching influenza, and it cannot seriously be meant to promise to

pay money to a person who catches influenza at any time after the inhaling of the smoke
ball. There is also great vagueness in the limitation of the persons with whom the contract
was intended to be made. But this document was intended to be issued to the public and
to be read by public. So it is very important to understand how would a commoner
interpret this advertisement? And the effect of this advertisement was to attract people
and make them use it, which would amount to more sales, thus more profit. Based on this
intention to promote the distribution of the smoke balls and to increase its usage, the
advertisement was accepted as a contract addressing public at large but limited to those
people who are using it either for prevention or treatment of influenza and other
mentioned diseases.
Another point which was discussed in the court was that of the time limit of the contract.
How do you define reasonable time period? And after great discussion, the respected
judge came to a conclusion that the protection warranted by the contract was to last
during the epidemic (1889-90 Flu epidemic).If so, it was during this epidemic that the
plaintiff contracted this disease. So the contract holds.
A.L.Smith, L.J:
His judgment was more general and concurred with both Lindley LJ and Bowen LJ's
decisions.