Since a contract is generally referred to as a binding set of promises (agreements) with which courts will enforce, the main issue in Carlill and Carbolic Smoke Company is whether there was a binding contract between the parties or not. A contract requires notification of acceptance – Did Mrs Carlill notify Carbolic of the acceptance of the offer and what are the exceptions if any? Did Mrs Carlill provide consideration in exchange for the 100 pounds reward?
The first point in this case is, whether the defendants' advertisement was an offer which, when accepted and its conditions performed, constituted a promise to pay, assuming there was good consideration to uphold that promise, or whether it was only a puff from which no promise could be implied, or a mere statement by the defendants of the confidence they entertained in the efficacy of their remedy. According to the law, an agreement establishes the first stage in the existence of as contract.
The three main elements of a contractual formation I will endeavor to consider in a bid to ascertain the legality and validity of contract are the following: Offer, Acceptance and Consideration. I wish to advance the conviction that the case of Carlill vs Carbolic Smoke Company was a valid contract characterized by elements of a valid contract. The most important feature of a contract is that one party makes an offer for a bargain that another accepts. This can be called a 'concurrence of wills' or a 'meeting of the minds' of two or more parties.
There must be evidence that the parties had each from an objective perspective engaged in conduct manifesting their assent, and a contract will be formed when the parties have met such a requirement. ] An objective perspective means that it is only necessary that somebody gives the impression of offering or accepting contractual terms in the eyes of a reasonable person, not that they actually did want to contract.
Where a product in large quantities is advertised for in a newspaper or on a poster, it is generally regarded as an offer, however if the person who is to buy the advertised product is of importance, i. . his personality etc. , when buying e. g. land, it is merely an invitation to treat. In Carbolic Smoke Ball, the major difference was that a reward was included in the advertisement which is a general exception to the rule and is then treated as an offer. Whether something is classified as an offer or an invitation to treat depends on the type of agreement being made and the nature of the sale. However, this case is handled as unilateral contract which is defined as an exchange of a promise for an act.
A unilateral contract is one in which one party has obligations but the other does not. Unilateral contracts sometimes occur in sport in circumstances where a reward is involved. Party A offers a reward to Party B if they achieve a particular aim. If Party B is successful they get the reward but if they are unsuccessful they receive no reward and equally they have no obligation to Party A. Such similar legal principles about unilateral contracts arose from the case of Carlill vs Carbolic Smoke Co.
Advertisements of unilateral contracts are treated as offers. Where the language is clear that an ordinary person would construe an intention to offer, anyone who relies on this offer and performs the required conditions thereby accepts the offer and forms an enforceable contract. The defendant may have advanced the argument that the offer was too vague to form the basis for a binding agreement, in that it had no time limit within which the person has to catch the epidemic. There are three possible limits of time to this contract.
The first is, catching the epidemic during its continuance; the second is, catching the influenza during the time you are using the ball; the third is, catching the influenza within a reasonable time after the expiration of the two weeks during which you have used the ball three times daily. It is not necessary to show the correct construction of this contract, for no question arises thereon. Whichever is the true construction, there is sufficient limit of time so as not to make the contract too vague on that account.
Normally, 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. In this case, however, it was not necessary to notify of acceptance prior to performing the requisite acts - the language of the offer showed the Company had waived the need for notification. The ordinary rule is that acceptance ought to be notified to the person who makes the offer, in order that the two minds may come together.
However, as notification of acceptance is required for the benefit of the person who makes the offer, the person who makes the offer may dispense with notice if he wishes or to stipulate a preferred method of acceptance. If the offeror (in this case the Company) expressly or impliedly indicates that it will be sufficient to perform the acts requested in the offer without communicating that to him, then performance of the condition is a sufficient acceptance without notification.
In most advertising cases, including this one, the inference in the advertisement is that a person is not to notify his acceptance of the offer before he performs the condition, but that if he performs the condition notification is dispensed with. It is imperative to note that one who makes a unilateral offer for the sale of goods by means of an advertisement impliedly waives notification of acceptance if his purpose is to sell as much product as possible.
The court will hold that a person who makes an offer may decline to require notice of acceptance if he or she wishes. One who makes an offer dispenses with the requirement of notice of acceptance if the form of the offer shows that notice of acceptance is not required. To accept an offer, a person need only follow the indicated method of acceptance. If the offeror either expressly or impliedly intimates in his offer that it will be sufficient to act without giving notice of acceptance, performance is sufficient acceptance without notification.
The court held that an advertisement is considered to be an offer when it specifies the quantity of persons who are eligible to accept its terms. If such an advertisement requires performance, the offeree is not required to give notice of his performance. In the advertisement case, it seems to me that an inference may be drawn from the transaction itself that a person is not to notify his acceptance of the offer before he performs the condition, but that if he performs the condition notification is dispensed with.
We must look to the essence of the transaction and what the offeror is bargaining for under the circumstances. Under these facts, the defendant impliedly indicated that it did not require notification of acceptance of the offer. This description fits implied contract which is defined as one that is established by the conduct of a party rather than by the party’s written or spoken words. The defendant could contend that it is not binding. In the first place, it is said that it is not made with anybody in particular.
Now that point is common to the words of this advertisement and to the words of all other advertisements offering rewards. They are offers to anybody who performs the conditions named in the advertisement, and anybody who does perform the conditions accepts the offer. 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.
Moreover, there is this clear gloss to be made upon that doctrine, that is notification of acceptance is required for the benefit of the person who makes the offer, the person who makes the offer may dispense with notice to himself if he thinks it desirable to do so, and I suppose there can be no doubt that where a person in an offer made by him to another person, expressly or impliedly intimates a particular mode of acceptance as sufficient to make the bargain binding, it is only necessary for the other person to whom such offer is made to follow the indicated method of acceptance; and if the person making the offer, expressly or impliedly intimates in his offer that it will be sufficient to act on the proposal without communicating acceptance of it to himself, performance of the condition is a sufficient acceptance without notification.
The law states that the person who makes the offer shows by his language and from the nature of the transaction that he does not expect and does not require notice of the acceptance apart from notice of the performance. The nature of the offer is such that notice of acceptance need not be given, only notice of performance.
Generally acceptance should be notified, but in this case the defendant waived this requirement. In unilateral contracts, communication of acceptance is not expected or necessary. If there is an offer to the world at large, and that offer does not expressly or impliedly require notification of performance, performance of the specified condition in the offer will constitute acceptance of the offer and consideration for the promise. Once Mrs Carlill had satisfied the conditions she was entitled to enforcement of the contract; the notification of performance of the conditions formed part of the acceptance.
It has been argued that this is nudum pactum - that there is no consideration. The argument could further be advanced that there was no consideration for the promise - that taking the influenza was only a condition, and that using the smoke ball was only a condition, and that there was no consideration at all; in fact, that there was no request, express or implied, to use the smoke ball. We must apply to that argument the usual legal tests. Let us see whether there is no advantage to the defendants. It can be argued that the use of the ball is no advantage to the company and that what benefits them is the sale; and the case is put that a lot of these balls might be stolen, and that it would be no advantage to the defendants if the thief or other people used them.
I contend that if the advertiser can only get the public to have confidence enough in the effectiveness of the product, many people will react and produce a sale which is directly beneficial to them. Therefore, the advertisers get out of the use an advantage which is enough to constitute a consideration. Another view begs to be addressed at this juncture. Does not the person who acts upon this advertisement and accepts the offer put himself to some inconvenience at the request of the defendants? Is it nothing to use this ball three times daily for two weeks according to the directions at the request of the advertiser? Is that to go for nothing? It appears to me that there is a distinct inconvenience, not to say a detriment, to any person who so uses the smoke ball.
I am of opinion, therefore, that there is ample consideration for the promise. Is it in order to say that if the person who reads this advertisement applies thrice daily, for such time as may seem to him tolerable, the carbolic smoke ball to his nostrils for a whole fortnight, he is doing nothing at all - that it is a mere act which is not to count towards consideration to support a promise (for the law does not require us to measure the adequacy of the consideration).? Inconvenience sustained by one party at the request of the other is enough to create a consideration. I think, therefore, that it is consideration enough that the plaintiff took the trouble of using the smoke ball. But I think also that the defendants received a benefit from this user, for the use of the smoke ball was contemplated by the defendants as being indirectly a benefit to them, because the use of the smoke balls would promote their sale.
In conclusion, I would note that if a person offers a reward to anyone who achieves a certain objective as desired by the offerer, then it is probable that whoever makes the offer will have to pay to persons who are successful. The law of contract shows how a valid contract is not limited to bilateral contracts but equally gives extensive consideration to unilateral contracts cases such as the case of Carlill vs Carbolic Smoke Co.