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Out of puff

Published in Insights, The New Zealand Initiative’s newsletter, 15 November 2019

If you have never heard of a “carbolic smoke ball”, you are obviously not a lawyer. The 1892 British case Carlill v Carbolic Smoke Ball Company is a classic in the law of contract.

After a new decision by New Zealand’s Advertising Standards Authority (ASA), we should reconsider it.

As widely reported last week, the ASA ordered Unilever to remove an ad outside a Whangarei dairy. The ad read “ice cream makes you happy”, which the ASA ruled could undermine the health of consumers. Unilever, meanwhile, maintains that it was just exaggerated puffery.

And this is where the carbolic smoke ball comes into play.

It was a curious case that ended in London’s Court of Appeal in 1892. A company had produced a phenol-filled rubber ball and marketed it as a flu remedy. In an advertisement it promised to pay £100 to anyone who contracted the diseases despite having used the ball.

You do not have to be a lawyer to guess what happened next. A certain Mrs Carlill fell ill despite this miracle cure. Fortunately, her husband was a solicitor. And so the whole affair ended in court because Mrs Carlill demanded her £100 – and eventually got them. The promise was deemed specific enough.

Carlill v Carbolic Smoke Ball Company has become a classic for two reasons. First, because it established the clear requirements of a unilateral contract. And second, because absent those requirements, an advertisement would be regarded as non-judiciable puffery.

Puffery is everything not to be taken literally. When an energy drink promises to give you wings, you do not expect feathers to grow from your back. When a fast-food chain says their burgers will blow your mind away, do not call the neurosurgeons just yet.

And when a shaver producer talks about the best a man can get … well, don’t believe it anyway. The best a man can get certainly isn’t a disposable razor.

The difference between contract and puffery once was common sense – in the 19th century. Now the ASA seriously believes that the slogan “ice cream makes you happy” contains a health claim.

By the same standards, half of political advertising would be judiciable. “Let’s do this”, “100,000 new homes” and “the year of delivery”, for example, were obvious cases of puffery.

The ASA got puffed out in a giant carbolic smoke ball. I guess I need some ice cream now.