Carlill v Carbolic Smoke Ball Company - Case Study Example

Case Law Analysis: Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ s Introduction The aim of this studyis to identify a case and discuss the facts and the legal issues in the case; the court’s ruling and rationale for arriving at such decision. The case analysed in the study is Carlill v Carbolic Smoke Ball Company.1 The rationale for selecting this case is because it is a landmark case in English law regarding the offer and acceptance of a unilateral offer. Contracts are part of human lives whether as corporations or as private parties hence this case gives a better understanding of how to make a valid contract. A valid contract must meet some conditions. There must be an offer from one party and its acceptance by the other party. Also, there should be an exchange of consideration and willingness by parties to enter a legally binding relationship.2 However, the contracting parties can vary the terms of the contract such as by waiving the requirement for the communication of an acceptance as is the case when sellers make ads to the general public through the media the public responds by performing the requirements. Facts The Carbolic Smoke Ball Company (defendant) was a manufacturer of the carbolic smoke balls that had responded to a flu pandemic that had claimed the lives of more than a million people. They made an advertisement in the Pall Mall Gazette and other media offering to reward any buyer with £100 who would buy and use the smoke balls according to their directives of three times daily for two weeks and contract any disease such as influenza, colds, etc.3 After seeing the ad Carlill (the plaintiff) bought the smoke balls according to the direction specified by the company of three times a day for almost two months. She contracted influenza and claimed for the reward from the company. However, the defendant refused to give the reward prompting the plaintiff to seek court intervention. This case was determined in the court of appeal after the company decided to appeal the earlier court’s ruling in favour of the plaintiff. Issue The legal issue, in this case, was whether the ads by the defendant constituted an offer for a valid contract having waived the right to be notified of the acceptance of the offer with a purpose of attracting as many buyers of the smoke ball as possible across the nation.4 There were other issues whether the case met the basis of a legal contract such as consideration, intention to form a legally binding agreement and determining whether a person could make a valid contract with the general public. Decision The Court of Appeal dismissed the appeal presented by upholding the ruling of the earlier courts. Reasons The court stated that where a person makes a unilateral offer for sale of goods will have impliedly waived the right to notification of the acceptance if the action is construed to have aimed at increasing sales of goods.5 Under Consumer Protection Act 1987, manufacturers of the products are held liable for any damages caused by their products to the consumers. The consumer has a right to sue the manufacturer for compensation of damages caused by the consumption of those products. Where the offeror either impliedly or expressly requires the offeree to take some action without giving notice of acceptance then the moment the offeree performs the required action will have accepted the offer. The court observed that the advertisement made by the defendant on the national newspaper constituted an offer made to the general public and any member of the general public could accept that offer. The court also established that by depositing £1000 with Alliance Bank the defendant intended to make a legal agreement and that it was not a mere invitation for the offer. Ratio The offeror can decide on how the offer is to be made. The words and conducts of the parties are essential in determining the significance of the offer. The traders or sellers who make ads to the general public are involved in making unilateral offers that can accept by any member of the public as long as they fulfil the conditions set in the ads.6 Significance The case of Carlill v Carbolic Smoke Ball Company is of great significance as far the unilateral offers and acceptances are concerned. It forms a basis for examining the requirements of a valid contract. Additionally, the case provides various remedies available for the wronged party in case of breach of contract, and the punishment that can be given to the offending party. The case is very essential in the understanding of the principles of a valid contract and is used in the court as a precedent when solving other related cases.7 The companies or individuals seeking to promote their products through advertisements should learn from the case that deceiving consumers by a way of misrepresenting information is unacceptable. Conclusion The contract for the sale of goods involves an offer to buy and seller’s acceptance to sell the goods after the passage of consideration or the monetary price given by the buyer in exchange for goods. The case of Carlill v Carbolic Smoke Ball Company presents a case where an offer can make a contract to the general public by waiving the right to notification of the acceptance due to the nature of the contract. Where the offeror either impliedly or expressly requires the offeree to take some action without giving notice of acceptance then the moment the offeree performs the required action will have accepted the offer. The advertisement does not require notification of acceptance and the acceptance involves the performance of the offeror’s requests. Reference List Cartwright, J. 2014, Contract Law: An Introduction to the English Law of Contract for the Civil Lawyer. A&C Black. Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 Gibson, A. & Fraser, D., 2013, Business Law 2014, Australia; Pearson Higher Education AU:  346-1103. Pathak, A. 2013, Legal Aspects of Business, 5th Ed. New Delhi: Tata McGraw-Hill Education. 109-784 Read More