Leonard v. Pepsico

From wikilawschool.net. Wiki Law School does not provide legal advice. For educational purposes only.
The printable version is no longer supported and may have rendering errors. Please update your browser bookmarks and please use the default browser print function instead.
Leonard v. Pepsico
Court United States District Court for the Southern District of New York
Citation 88 F. Supp. 2d 116 (1999)
Date decided August 5, 1999

Facts

Pepsi ran a promotion in the 1990s to encourage consumers to collect "Pepsi points." One of the Pepsi ads shows a boy exchanging 7,000,000 Pepsi points for a Harrier military jet.

Leonard really wanted the Harrier jet. He figured that 7,000,000 Pepsi points would require him to spend $700,000. At the time, disregarding the civilian restrictions from buying a military jet, the cost of the said Harrier jet was $23,000,0000. Thus, it seemed to Leonard like a discount of over $22 million dollars from Pepsi if the ad had been serious.

When Leonard ordered the Harrier Jet, Pepsi officials replied that the advertisement was intended to be humorous and attention-grabbing.

Procedural History

Pepsi sued Leonard in the Southern District of NY seeking declaratory judgment that the Pepsi didn't owe Leonard the jet.

Issues

Can a consumer agreeing to the terms of an advertisement that was intended to be humorous result in the creation of a valid contract?

Holding

There was no valid offer, & thus, no enforceable contract.

Resources

Facts

A Pepsi advertisement campaign entitled “Pepsi Stuff” encouraged customers to collect Pepsi Points and redeem them for merchandise featuring the Pepsi logo. A commercial run by the defendant featured a Harrier Fighter Jet flown by a young boy to school, with the words “Harrier Fighter 7,000,000 Pepsi Points” displayed on the screen. This jet was not included in the Pepsi Points Catalogue. The defendant’s catalogue specified that if a consumer lacked enough Pepsi Points to purchase an item then they could purchase additional points for $.10 per point. The plaintiff sent a check for $700,000 (the amount of money required by the commercial to purchase the plane). The defendant notified the plaintiff that the plane in the commercial was not a product available, and that it was purely an advertisement/joke. Plaintiff sued for specific performance.


Procedural History

Plaintiff brought an action for specific performance of a Harrier Jet. Defendant moved for summary judgment, and the defendant’s motion was granted.


Issues

Whether an advertisement can constitute as an offer, specifically an advertisement in which a reasonable person would consider to be done in jest.


Holding

An advertisement does not ordinarily constitute an offer. It is possible to make an offer by an advertisement directed to the general public, but there must ordinarily be some language of commitment or some invitation to take action without further communication. Commercial was clearly done in jest, which to a reasonable person would not extend a contract.


Reasoning

Advertisements are generally understood to be mere requests to consider and examine and negotiate; and no one can regard them as otherwise unless the circumstances are exceptional and the words used are very plain and clear. (This protects businesses from running out of stock.)


Rule

There is a distinction between the offer for the Harrier Jet and the offer of Carbolic Smoke Ball. The commercial urged consumers to accumulate Pepsi Points and to refer to the Catalog to determine how they could redeem their Pepsi Points. This was an invitation to negotiate, not a unilateral offer.