Donald Trump and the case law of the Carbolic Smoke Ball
Posted on: 22 September, 2026
By Jason Phelps
Built Environment Senior Lecturer
This article examines the legal principles of contract formation and what is required to create a binding agreement between two parties. These foundational concepts are central to the study and practice of construction law and are among the topics covered in our new LLM in Construction Law, launching in September 2027.
On 9 September 2026, President Donald Trump addressed a Republican party mid-term convention in Dallas, covering many topical issues, and announced:
“…here is my promise to you, if the Republicans win the house of representatives and the United States senate, both of them, because of our tremendous economic success, I will issue a dividend to every adult citizen in the United States of America for $5,000…it will be called the Trump dividend.”
This announcement from President Trump raises the question of whether a promise to pay adult citizens of America $5,000, should the Republican party win the mid-term elections, can form a binding contract. This article discusses a set of established legal principles using UK case law, and notes that American law (constitution, federal and state legislatures) is different to UK legislation.
Carbolic Smoke Balls
The starting point is the legal case Carlill v Carbolic Smoke Ball Co. The Carbolic Company placed an advert in several London newspapers on 13 November 1891, stating that if you used their product, ‘The Carbolic Smoke Ball’, for three times a day for two weeks, this would prevent colds and influenza, which had become a global pandemic.
The advert stated that the company would pay £100 (£16,400 in 2026) if anyone contracted influenza after using its Carbolic Smoke Ball. Furthermore, £1,000 (£164,900 in 2026) had been deposited with the Alliance Bank to show their sincerity. Mrs Carlill purchased and used the smoke ball as instructed but still contracted influenza.
The company refused to pay, and Mrs Carlill brought the case to recover the £100 reward. The defence of the company was that the advert was mere “puff” and that there was not a legal contract, as acceptance had not been notified.
Before we proceed further, there needs to be an explanation of the elements of a contract:
Despite all the claims of the Carbolic Company, the Queen’s Bench division of the High Court ruled in favour of Mrs Carlill. The Company then took the case to the Court of Appeal. Lindley LJ, one of three judges overseeing the case, stated that:
“…in point of law this advertisement is an offer to pay £100 to anybody who will perform these conditions, and the performance of the conditions is the acceptance of the offer…”.
He further stated that:
“…it appears to me, therefore, that the defendants [Carbolic Company] must perform their promise, and, if they have been so unwary as to expose themselves to a great many actions, so much the worse for them.”
A binding unilateral offer
The Carlill case provided a good example of how a binding unilateral (binds one party without the consent of others) offer can become a contract. The advert provided specific wording to denote intent, which constituted an actual offer, not just an invitation to treat (invitation for people to make an offer).
The £1,000 deposit in the bank account acted as evidence of intent, making the offer a serious one instead of an outrageous one. The offer is then made to anyone who accepts it by performance (using the ball), and it is this performance that acts as both acceptance and consideration. It was also stated in the court that the deposit demonstrated an intention by the Carbolic Company to be bound by the advert.
The unilateral contract exchanges a promise for an act. In the Carlill case, the requested act was that of using the product as directed, benefiting the company commercially. However, with the Trump Dividend, the promise does not ask each American adult to do anything expressly as some adults will not vote or they will vote for the Democratic Party.
Furthermore, all adults qualify despite their voting behaviour. This then becomes a mere incident and not an acceptance on the part of each beneficiary. Therefore, the Trump Dividend begins to resemble more of a conditional gift.
Bribery
The Trump Dividend could also be perceived as a bribe, with the promise that if the Republicans win both seats, the American public will also receive $5,000.
The UK does have a very strict stance regarding political parties and the offer of money or other considerations with the aim to influence voting behaviour. This is covered in the Representation of the People Act 1983 which is currently going through the House of Commons with amendments in 2026. In Section 113 of the Act it states that:
“A person shall be guilty of bribery if he, directly or indirectly, by himself or by any other person on his behalf gives any money…to or for any voter…in order to induce any voter to vote…”.
Therefore, from a UK perspective, the law is very clear about bribery and its connections to politics. There is also the Bribery Act 2010, but it mainly concentrates on bribery involving businesses, public functions and improper performance of duties, so the Act sits outside of this discussion.
Therefore, the Trump Dividend cannot be perceived as a bribe simply because it offers a financial benefit, because political promises involving economic gain are very commonplace in America.
If the matter were considered by a UK court, it would likely focus on whether the promise represented a genuine future government policy or an offer of money intended to influence voting, which it could potentially be viewed as. However, the legal scrutiny in America is different to UK legislation.
Intention to create legal relations
Aside from the potential gift and bribery, there is also an intention to create legal relations. In the case Balfour v Balfour from 1919, a married couple lived in Ceylon (Sri Lanka), where the husband worked. He went on leave to England, but his wife had to stay behind due to severe arthritis, so the husband agreed to pay her £30 a month until he returned. Unfortunately, the marriage broke down, and the husband stopped the monthly payments. The wife sued him for the money through the courts.
The wife lost the case because the court found that there was no intention to create legal relations, meaning the husband’s promise to pay her £30 a month was not considered a legally binding contract. Therefore, if a legal claim was actioned based on the promise of the Trump Dividend, amongst all other promises that are made between people with an intention to be treated as a legally binding contract, then the courts would be inundated with claims.
Conclusion: No enforceable contract
In conclusion, although the Carlill case has similarities with the Trump Dividend, there is no enforceable contract as there are no acts that each individual voter should complete. The electoral result is a contingency, not an acceptance or consideration. The Carlill case is still relevant as it is proof that mass communication is not incompatible with contractual liability, although it does show where this lacks.
A public promise, such as the Trump Dividend pledge, can constitute a unilateral contract, but only if it contains the necessary architecture of commitment, certainty of terms, requested performance, acceptance, and a lawful route of payment. Therefore, the dividend stated by President Trump is a clear political promise where only the ballot box and not a courtroom can impose some obligation.
This article has explored how contracts are formed and the essential elements required to create a legally binding agreement. While the discussion centred on a contemporary political pledge, the same legal principles apply across many areas of law, including the construction industry, where contracts such as JCT, NEC and FIDIC form the basis of commercial relationships. These and other topics are examined in our new LLM in Construction Law, launching in September 2027.
This article is a legal doctrine analysis for educational purposes and is not considered as legal advice.
