During their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discussed Puffery: Carlill v Carbolic Smoke Ball Co 1893. Here’s an excerpt from the episode:
Jake: When was the timeline on that one, by the way? When did they say that was–? Well, I guess, when did Elon say and then when did Cathie say? Those are probably the two datapoints.
Bill: Yeah, who knows?
Jake: Three years ago?
Bill: It’s mere puffery, my friend.
Tobias: Is that a carbolic smoke ball?
Jake: Or, the physics?
Tobias: Did you know carbolic smoke ball?
Bill: It’s about the vibes.
Tobias: Did you learn carbolic smoke ball, Carlill and carbolic smokeball?
Bill: No idea.
Jake: I don’t even know what language you are talking right now.
Bill: What is that?
Tobias: Ah, it’s an old case in contract. I think it’s most advertising is regarded as mere puffery and not a contract that you can–
Bill: Oh, yeah.
Tobias: This guy, different spelling to my Carlisle, sued the Carbolic Smoke Ball Company, because he bought one of their carbolic smoke balls and they had said, whatever, it’ll cure your cold or whatever. He used this carbolic smoke ball on himself, and it didn’t cure his cold, so he sued them. The question was, is this mere puffery or is this a contract? I think the way they had worded it, he had done everything that he needed to complete the contract. It’s been a long time since I studied contract law. I thought it was a pretty famous case. It’s a really old case. So, it’s possible it made it to US case– [crosstalk]
Bill: Yeah, we definitely studied something similar. But puffery goes a long way. Apparently, you’re allowed to do it when you cite investment fund returns, which I did not know until not too recently.
Tobias: Say it again.
Bill: I said, apparently, you’re allowed to do it when you’re citing forward investment fund returns.
Tobias: Forward returns. Yeah.
Bill: Yeah, 40%. per year, right? It’s puffery.
Jake: The models say 50%.
Tobias: JT– [crosstalk]
Bill: Oh, they put them into the matrix.
Bill: We got too honest and they canceled him.
Tobias: There you go. They did teach that in Canada.
Jake: That’s probably good. Kept me from getting sued, probably. It’s a good thing it dropped.
Tobias: You get Wagon Wheel? They teach you Wagon? It’s too old, too long ago.
Bill: I think I did.
Tobias: There’s association with the US lawyers before, there’s some crossover. Anyway, sorry, guys, moving on.
Bill: Well, it all goes back. It’s all common law, right, the very early things that you study.
Tobias: Which goes– [crosstalk]
Bill: Probably, we all get along, us, the English, and the Aussies.
Tobias: It’s that old common law.
Bill: That’s right. Who’s got questions? Is our man Samson in the audience. What’s he up to?
Tobias: He is.
Bill: Just making so much money on Tesla, he doesn’t know what to do with.
Tobias: He listened to the podcast, on the Drew Dixon podcast.
Bill: Oh. What’s his takeaway? He’s probably got a different one than I do. It’s very interesting. Drew came away a little less bearish on Tesla. I came away as confused as ever.
Tobias: Don’t have to win it every game though.
Tobias: It’s too hard.
Bill: That’s right. Too hard.
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