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In Leonard v. PepsiCo, the court ruled that the commercial was not an offer to enter into a contract. PepsiCo released a commercial that featured consumers obtaining “Pepsi Points” by purchasing their product. These accumulated points could be cashed in for rewards and prizes such as sunglasses, t-shirts, etc. These rewards were able to be selected out of a catalog that PepsiCo provided to their consumers. At the end of the commercial, Pepsi shows an adolescent arriving at school in a Harrier Jet that could be obtained for 7,000,000 Pepsi Points. Even though this was shown in the commercial as a reward, a Harrier Jet was not included in the catalog.
According to the textbook, “Generally speaking, advertisements for the sale of goods at specified prices are not considered to be offers. Rather, they are treated as being invitations to offer or negotiate. (Langvardt et al., p. 370).” How I interpret this is that the consumer can make an offer to the seller to purchase or exchange a good. With that being said, there is no commitment to sell in the PepsiCo commercial. With PepsiCo offering rewards for purchasing and using their product, there is a different type of contract to be looked at. Advertisements that offer rewards are usually treated as unilateral contracts. By breaking the commercial down into sections, we can observe that there isn’t a specific enough item to form a commitment to sell. In the commercial, PepsiCo isn’t guaranteeing that any of their consumers will be awarded a Harrier Jet for 7,000,000 Pepsi Points. Where a unilateral contract would come into play, is if PepsiCo would set a date or other specific commitment to sell one Harrier Jet. Rather, this is an invitation to offer or negotiate, and not considered a contract.
There was no objective standard of the intent in the advertisement. According to PepsiCo, the commercial was intended to humor their consumers, and not cause a reasonable person to think that they would be offering planes to them. The commercial as a whole had exaggerated and fanaticized many aspects of a teenager’s life. From the unrealistic nature of the commercial, it is obvious to many viewers that the Harrier Jet was an overstatement. As mentioned before, the Harrier Jet was not included in the catalog of items to choose from.
Finally, the contract did not satisfy the statute of frauds, which states, “a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. (Leonard v. Pepsico, Inc., 88 F. Supp. 2d 116, 1999).” A Harrier Jets market price is $23 million; therefore, a statute of fraud would need to be satisfied. PepsiCo didn’t have any evidence or written documents with the parties involves, and so, it was not a contract.
After researching the Leonard v. PepsiCo case, I would agree with the judge’s ruling. The commercial that PepsiCo released was not a valid contract, but instead an advertisement. I personally don’t think that a Christian worldview affects my reasoning on this topic.