Overview: BUSINESS LAW Management 362

Practice HW #4

You will be graded on: Your ability to identify the relevant legal concepts and your success at explaining how those concepts apply to the problem presented; The quality of your logic and analysis; The clarity of your writing.

During the flu pandemic of 1890, a company called the Carbolic Smoke Ball Co. (Carbolic) created a smoke ball that it claimed would positively cure influenza and a range of other illnesses. The smoke ball was basically a rubber ball filled with carbolic acid attached to a rubber tube that was to be inserted into a persons nose so they could inhale the vapors. Carbolic advertised the smoke ball in many newspapers [to prove I am not making this up, you can see an example of one of these ads ]online. In those ads, Carbolic promised to pay 100 (equivalent to about $12,500 today) to anyone who purchased the smoke ball and used it as directed but still caught influenza. Specifically, the ad claimed: 100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks, according to the printed directions supplied with each ball. 1000 is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter. During the last epidemic of influenza many thousand carbolic smoke balls were sold as preventives against this disease, and in no ascertained case was the disease contracted by those using the carbolic smoke ball. One carbolic smoke ball will last a family several months, making it the cheapest remedy in the world at the price, 10s. post free. The ball can be refilled at a cost of 5s. Mrs. Louisa Elizabeth Carlill saw one of Carbolics advertisements, bought one of the balls and used it three times daily for nearly two months (as directed) until she contracted the flu. She sought 100 payment from Carbolic, who refused to pay. Has a contract been formed? In other words, can Carlill prove all of the elements of a valid contract? Did Carbolics claims create a warranty? Explain your reasoning using the concepts.