Question
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
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?
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