This is a landmark contract law case establishing the validity of "unilateral contracts." It determined that advertisements can constitute binding offers (rather than mere invitations to treat or "puffs") if specific conditions are fulfilled, and that an offer can be made to the world at large.

• The Advertisement: The defendants, proprietors of a medical preparation, placed an advertisement offering a £100 reward to any person who contracted influenza after using their "Carbolic Smoke Ball" three times daily for two weeks according to printed directions.

• The Deposit: The advertisement stated that £1000 was deposited with the Alliance Bank to show their "sincerity in the matter".

• The Plaintiff: Mrs. Carlill, relying on the advertisement, purchased a ball and used it as directed from November 20, 1891, to January 17, 1892.

• The Breach: Despite using the ball properly, the plaintiff contracted influenza; the defendants refused to pay the reward.

• Was the advertisement a binding offer or a mere "puff" (a meaningless marketing boast)?.

• Can a valid contract be made with "all the world"?.

• Did the plaintiff need to notify the defendants of her acceptance before performing the condition?.

• Was there valid consideration (value exchanged) to support the contract?.

The Court of Appeal dismissed the defendants' appeal and held that the plaintiff was entitled to recover the £100. 

• Intention to Create Legal Relations: The advertisement was not a mere "puff" because the statement regarding the £1000 deposit was distinct proof of sincerity and an intent to be bound.

• Offer to the World: An offer can be made to the whole world; it becomes a binding contract with the specific portion of the public that comes forward and performs the condition.

• Communication of Acceptance: In cases of this kind (unilateral contracts), the offeror implies that performance of the condition is sufficient acceptance without the need for prior notification.

• Consideration: There was valid consideration in two forms:

  • Detriment to the Plaintiff: The inconvenience of using the ball three times daily for two weeks at the company's request.

  • Benefit to the Defendant: The use of the balls by the public promotes sales, which is a direct advantage to the company.