Case Analysis: Leonard v. PepsiCo, Inc.
Facts of the Case
Pepsi Company aired an advertisement where they were promoting a new reward program that they were offering to their customers upon collection of Pepsi points. In the advert, the company showed different items and the number of points it would take for them to get the rewards. The items included a t-shirt, sunglasses, a leather jacket, and the controversial subject, which was a Harrier Jet. The advert indicated that the price of the Harrier Jet was 7,000,000. The terms of the promotion also noted that customers could purchase additional points for ten cents.
Leonard, who is the plaintiff, together with several of his friends, accumulated enough points to enable them to win the Harrier Jet. They collected the points and sent the check to Pepsi Company demanding to be rewarded with the Harrier Jet. However, Pepsi Company refused to honor the demand and sent a letter to Leonard explaining the jet was not among the item designated for rewards. The company referred Leonard to the promotional brochure to re-read the terms and conditions.
The defendant further stated that the inclusion of the Harrier Jet in the advert was solely for entertainment purposes and was not to be taken at face value. However, the plaintiff was not pleased with the results, and he, therefore, sued the company for breach of contract. The defendant then filed a motion to the court, demanding a summary of judgment. The court granted the defendant summary of judgment stating that adverts are not offers or contracts to sell; instead, they are invitations to negotiate.
Issue
The issue, in this case, was determining whether the advertisement of the Harrier Jet constituted an offer for sale. As such, the issue is ‘Did the advertisement of the Harrier Jet constitute an offer to a sale?’
Rules
According to the law, advertisements do not constitute an offer or contract unless they are definite, explicit, or clear about this concept, thus leaving no fact open for negotiation (Epstein, 2018). The law further states that whether an offer has been made depends on the level of reasonableness of the offer in question. The law demands a plaintiff to prove beyond a reasonable doubt that the advertisement or alleged solicitation was indeed intended as an offer (Epstein, 2018). An advertisement that can be seen as an apparent joke cannot be considered a contract in the court of law.
Analysis
In the case of Leonard v. PepsiCo, the advertisement did not mention the steps required to accept its said offer. The Harrier Jet offer of 7,000,000 points was not included in the actual terms and conditions of the advert. Still, it was only included to make the offer more attractive and for entertainment purposes (Peters et al., 2017). The advertisement did not seek to evoke a specific action. Rather it only intended to raise a reciprocal promise to the customers in compliance with the terms and conditions of the order form, which in this case did not mention any sort of Harrier Jet. Despite this, the plaintiff claimed that the ad constituted a unilateral offer similar to the one offered in the case of Carlill v. Carbolic Smoke Ball (Rajah, 2017). However, the court stated that this case was different from Carlill’s case because, in the latter, there were definite and specific terms that any person who performed the stated instructions detailed in the advertisement would be offered a reward (Rajah, 2017). Contrary to this, in the case of Leonard v. PepsiCo, there was no instruction or direction, but just an encouragement to accumulate Pepsi points and purchase items from the catalog (Little, 2018). As such, the court held that there was no unilateral contract in the advert.
Furthermore, the court held that no objective individual could reasonably conclude that the advertisement actually offered customers a Harrier Jet, and so it was an apparent joke of ‘zany humor’ (Little, 2018). The advert showed exaggerated promises that a reasonable person would understand as puffery. Similarly, it was quite improbable that a high school student would fly a jet of that size into school without a helmet, instrument checking, or any consideration of danger. Using logic, the court also stated that the Harrier Jet’s primary objective as per the United States Marine Corps is to “attack and destroy surface target under day and night visual conditions” (Little, 2018) The jet is designed to carry large amounts of armaments such as 9,200 pounds of missiles and bombs. As such, it is not logical for one to assume that the jet would be used as a means of transportation to school even if one can afford it “in a form that eliminates its potential for military use” (Iturralde, 2017). Lastly, for one to accumulate the requisite 7,000,000 points, they would have to consume at least 190 bottles of Pepsi drink per day for the next one hundred years. This is not a possible target. Also, a Harrier Jet costs about $23,000,000; therefore, such a deal is most likely too good to be true (Iturralde, 2017).
Conclusion
The court held that the message was merely an advertisement and not a buy offer. Secondly, the details of the advert would not cause a reasonable person to conclude that a soft drink company would possibly give away a fighter plane as part of a promotion. As such, the court granted the defendant summary of judgment. I agree with the court’s ruling on the case.
Reflection
If I were a judge, I would make the same ruling and hold that the Harrier Jet advertisement was not an offer. The reason for this is because of the reasonableness of the offer. It is not possibly logic for a soft drink company to offer a fighter jet as part of its promotional campaign. This case is significant because it lays a foundation for advertisers and customers to know their rights and follow the right procedures before filing a legal suit. The case also helps advertisers to be careful when designing adverts so that they do not cause confusion to their customers.
References
Epstein, D. G. (2018). Response to Reasonable Expectations in Sociocultural Context.
Iturralde González, R. (2017). The Need to Remove the Civil Code from Mexican Commercial Laws: The Case of “Offers” and “Firm Promises”. Mexican law review, 10(1), 21-44.
Leonard v. PepsiCo Inc., 88 F. Supp. 2d116(S.D.N.Y., 1999)
Little, L. E. (2018). Judicial Regulation of Humour in the United States. In Judges, Judging and Humour (pp. 281-312). Palgrave Macmillan, Cham.
Peters, D., Tran, S. V., Newman, D. R., Antao, L. F., Slagley, D. O., & Kolls, H. B. (2018). U.S. Patent No. 10,121,306. Washington, DC: U.S. Patent and Trademark Office.
Rajah, V. K. (2017). Whither adversarial commercial dispute resolution?. Arbitration International, 33(1), 17-34.