FACT SUMMARY Pepsi ran an advertisement

on national television promoting its Pepsi Points

program whereby consumers could obtain points

by purchasing Pepsi products and then redeem

the points for certain apparel and other items. An

alternate way to accumulate points was to purchase

them for a certain dollar figure. The Pepsi advertisement

opened with the morning routine of a high

school student. The commercial was based on a Top

Gun movie theme and depicted the student wearing

apparel such as a leather bomber jacket, a Pepsi

T-shirt, and aviator sunglasses. For each item, the

advertisement would flash the corresponding number

of Pepsi points required to obtain the item. For

example, when showing the actor with the aviator

sunglasses, the advertisement featured the subtitle

"Shades 175 Pepsi Points." The advertisement then

showed a view of the cover of a Pepsi Stuff Catalog

with a narration of "Introducing the new Pepsi

Stuff Catalog" and the subtitle "See details on specially

marked packages." Finally, the advertisement

showed the student arriving at his high school in a

Harrier fighter jet to the amazement of his friends

and teachers. The student hops out of the jet and

says, "Sure beats the bus." At this point, the subtitle

flashed, "Harrier jet 7,000,000 Pepsi points."

Leonard filled out the Pepsi Stuff order form

(located in the catalog produced by Pepsi), but since

there was no mention of the Harrier jet, Leonard simply

wrote in the item on the order form and sent the

order to Pepsi with a check for $700,000, the amount

necessary to purchase the requisite points as stated

in the advertisement. Pepsi refused to transfer title

on the basis that no contract existed. The trial court

ruled in favor of Pepsi. Leonard appealed, among

other reasons, on the basis that the Pepsi advertisement

was specific enough to constitute a valid offer

of a unilateral contract through its advertisement.

SYNOPSIS OF DECISION AND OPINION The

court ruled against Leonard. While acknowledging

that certain advertisements could be an offer if the

promise is clear, definite, and explicit, such was

not the case here. The advertisement was not sufficiently

definite because it reserved the details of the

offer to a separate writing (the catalog).

WORDS OF THE COURT: Requirements for

Advertisements as a Unilateral Offer "In the

present case, the Harrier Jet commercial did not direct

that anyone who appeared at Pepsi headquarters with

7,000,000 Pepsi Points on the Fourth of July would

receive the Harrier Jet. Instead, the commercial urged

consumers to accumulate Pepsi Points and refer to

the catalog to determine how they could receive their

Pepsi Points. The commercial sought a reciprocal

promise, expressed through the acceptance of, and

in compliance with, the terms of the Order Form. . . .

[T]he catalog contains no mention of the Harrier Jet."

Case Questions

1. What facts would support Leonard's primary argument

as to why this commercial was a unilateral

offer to contract?

2. If the wording on the catalog order form had

allowed a consumer to write in the item (rather

than check a box next to the item), would that

change the outcome of this case?

3. Should a reasonable person seeing the television

commercial reasonably believe that Pepsi

would sell a $23 million Harrier jet for only

$700,000?