The reasoning found in the judgments of the Lord’s Justices of Appeal is fairly consistent. All three agree that the advertisement is ‘an express promise to pay 100/ in certain events’ (Lindley L at 261). This conclusion is reached by interpreting the language of the advertisement ‘in its plain meaning, as the public would understand it’ (Bowen LJ at 266).
The security of 1,000/ deposited with a bank is materials to their Lordships’ conclusion that the advertisement was an offer ‘intended to be acted upon and when accepted and the conditions performed constituted a binding promise’ (AL Smith LJ at 273).
On the question of whether the promise was binding and not an offer made to the whole world or no one in particular, Lindley (at 262) and AL Smith (at 274) LJJ rely upon Williams v Cawardine 4 B & Ad 621 as authority that advertisements offering rewards are open to any person who performs the conditions of the advertisement. Bowen LJ (at 269) reaches the same conclusion relying on the judgment of Willes Jin Spencer v Harding Law Rep 5 CP 561.
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All three reject the defendant’s claim that the acceptance offer should have been notified. Lindley LJ cites Lord Blackburn in Brogden v Metropolitan Railway Co in support of the view that notice of acceptance if it is required, is given ‘contemporaneously with… notice of the performance of the condition’ (at 262) but prefers the view that no notice is either expected or required ‘apart from notice of performance’ in the present case (at 263).
Bowen LJ concludes that the nature of the offer ‘impliedly indicate[s] that [it] does not require notification of acceptance of the offer (at 270). He refers to Brogden and Harris’s Case Law Rep 7 Ch 587 and explains his reasoning with an example of a lost dog. AL Smith L does not consider this point in detail but concurs with the others (at 274).
AL Smith LJ is of the opinion that consideration for the contract was provided (i) by the inconvenience suffered by the plaintiff in using the smoke ball in the required fashion and (ii) the monetary benefit to the defendant through sales of the smoke balls (at 275). On the first point, Bowen LJ (Ibid) refers to three cases and Selwyn’s Nisi Prius, an academic work, to reach the conclusion that ‘inconvenience sustained by one party at the request of another is sufficient to create a consideration’.
On the question of the benefit to the defendant in terms of sales, Bowen and Lindley LJJ agree with AL Smith LJ, reasoning on the facts that the advertisement could lead to public confidence in the remedy and hence increased sales which would be of benefit to the defendants.