Download Pepsi Harrier Jet Case and more Cheat Sheet Contract Law in PDF only on Docsity!
LEONARD V PEPSICO INC.
WEEK TWO CASE READING
AREA OF LAW: Law Of Contract PLACE OF CASE: S.D New York, USA. COURT: United States District Court RELEVANT TIME OF PUBLICATION: August, 5th 1999. JUDGE(S): Kimba M. Wood, District Judge. LAWYERS: - PARTIES: Plaintiff (Pepsi Customer) and Defendant (producer & distributor of Pepsi and diet Pepsi) WHO ARE THE RELEVANT PARTIES: The plaintiff, who is a resident of Washington state; is young, adventurous and spirited and is extremely interested in obtaining a Harrier Jet from the defendant’s “Pepsi Stuff” promotion. The defendant is the producer and distributor of Pepsi and Diet Pepsi. They are responsible for testing the promotion in the Pacific Northwest from 1995-1996 which includes W.S ISSUE(S): Whether the television commercial constituted an offer? MATERIAL FACTS: This case is brought before the United States District Court by the plaintiff seeking not only other things but specific performance- (A contractual remedy in which the court orders a party to actually perform its promise as closely as possible, because monetary damages are somehow inadequate to fix the harm). of an alleged offer of a Harrier Jet featured in a television advertisement under the defendant’s promotion of “Pepsi Stuff”. The defendant has moved to a motion of summary judment - ( is a request made by the defendant in a civil case. It asserts that the plaintiff has raised no genuine issue to be tried and asks the judge to rule in favor of the defense. This motion is typically made before trial. Summary judgment is a legal term which means that a court has made a determination (a judgment) without a full trial). Pursuant to Federal Rule of Civil Procedure 56 which was granted by Court. The defendant is the producer and distributor of Pepsi and Diet pepsi. Promoting “Pepsi Stuff”, which encourages the public to collect “Pepsi
Points” from consumption or purchasing points for 10c each from the specific marked packages of Pepsi and or Diet Pepsi. Which enables them to redeem these points for merchandise featuring the Pepsi logo. Before, introducing the promotion nationwide, the defendant conducted a test in the Pacific Northwest from october 1995 - march 1996 which includes W.S The consumers of the P.N were given the catalogue of the “Pepsi Stuff”, and therefore the plaintiff sees a commercial of the promotion, including an offer for a Harrier Jet. RELEVANT STATUTES/LAW/RULE: Statute of Frauds RULE : A television commercial depicting a military jet is not an offer of goods; any objective person cannot reasonably conclude that a television commercial was an actual offer of a military jet of which consumers could accept; a television commercial that was an alleged contract did not satisfy the New York statute of frauds. PROCEDURAL HISTORY: - PLAINTIFF(S)/APPELLANT(S )/CLAIMANT(S) ARGUMENT(S): Plaintiff argues that a reasonable, objective person would have understood the commercial to make a serious offer of a Harrier Jet because there was "absolutely no distinction in the manner". Plaintiff also relies upon a press release highlighting the promotional campaign, issued by defendant, in which "no mention is made by [defendant] of humor, or anything of the sort." He thought it was a serious offer. DEFENDANT(S)/RESPONDE NT(S) ARGUMENT(S): Defendant argued that their advertisement was not an offer under the different rulings from numerous relevant caselaws. That it was purely out of entertainment and as a joke. JUDGE(S)/COURT(S) REASONING: The Judge reasoned that the television commercial cannot be deemed in itself as definite. Because the details of the offer werent within the commercial but the catalog. The tv commercial did not mention any specific steps for potential offerees to complete in order to accept the alleged offer of the Harrier Jet. Judge extended their reasoning to Lefkowitz v. Great Minneapolis Surplus Store in contrast to the current case, “identfied the person who could accept”. Even referring to Corbin,supra,ss 2.4, at 119: “Greater precision of expression may be required, and less help from the court given ], when the parties are merely at the threshold of a contract.”) However, if the court did find that the catalog had included a Harrier Jet within the list of other redeemable items, the advertisement of the
● “General rule is that an advertisement does not constitute an offer. “ ● “Not ordinarily intense or understood as offers to sell.” ● “It is possible to make an offer by an advertisement directed to the general public, but there must ordinarily be some language of commitment/ invitation to take action without further communication.” ● “It is possible to make a definite and operative offer to buy or sell goods by advertisement- (newspaper, handbill, catalog, or circular or on a placard in a store window.” ● “These advertisements are to be understood to be mere requests to consider and examine and negotiate. ● No one can reasonably regard them as otherwise unless the circumstances are exceptional and the words used are very plain and clear.” ● “An advertisement is not transformed into an enforceable offer merely by a potential offeree’s expression of willingness to accept the offer through, among other means, completion of an order for.” ● This case illustrates that when an advertisement that would normally be considered and offer, are so absurd that a reasonable person would not consider them to be serious, then there is no offer and there cannot be any acceptance. Also worth noting, is the fact that the advertisement referred viewers to the catalog of Pepsi products where Defendant did not list a Harrier Jet. This catalog was the true offer. PRECEDENT(S): Lovett v. Frederick Loeser & Co., 124 Misc. 81, 207 N.Y.S. 753, 755 (N.Y.Mun.Ct.1924) : “an advertisement is nothing but an invitation to enter into negotiations, and is not an offer which may be turned into a contract by a person who signifies his intention to purchase some of the articles mentioned in the advertisement”. Mesaros v. United States, 845 F.2d 1576 (Fed.Cir.1988): The court began by noting the “well- established rule” that advs and order forms are “mere notices and solicitations for offers which create no power of acceptance in the recipient.” (see at 1580). Restatement (Second) of Contracts ss 26: “A manifestation of willingness to enter a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.”)
Lefkowitz v. Great Minneapolis Surplus Store, 251 Minn.188,86 N.W.2d 689,691 (1957): The exception to the rule explained below that advs do not create any power of acceptance in potential offereers is where the advs is “clear, definite, and explicit and leaves nothing open for negotiations”. “It constitutes an offer, acceptance, of which will complete the contract.” RESULT/OUTCOME: The court presided over by Judge Kimba Wood, rejected Leonard's claims and denied recovery on several grounds, including: It was found that the advertisement featuring the jet did not constitute an offer under the Restatement (Second) of Contracts. The commercial was only an advertisement not an unilateral offer and that the exaggerated commercial would not be a reasonable cause for the objective person to think its a serious stand of offer. However, there is no writing between the parties to satisfy the Statute of Frauds. REFERENCE/CITATION: Leonard v. Pepsico, Inc., 88 F. Supp. 2d 116 (S.D.N.Y. 1999)
