Acct 511 Module 1 - Leonard V Pepsico

              During the mid-nineties, PepsiCo, defendant, launched a preliminary ad campaign in the Pacific north west region of the United States, including the state of Washington.  The ad campaign was to promote consumers to purchase Pepsi products and collect points.  Points are accumulated to specific amounts and are used to redeem items from the Pepsi Stuff catalogue.  Various items in the Pepsi Stuff catalog included sunglasses, t-shirts and phone cards (Morales 2000).  As part of PepsiCo's ad campaign, a television commercial was aired in the region.  This commercial portrayed a stylish teenager donning a leather jacket and sunglasses as sub-titles indicated the amount of Pepsi Points for each item.  At the end of the commercial the same teenager arrived at school in a Harrier jet and the subtitles indicated "Harrier Jet 7,000,000 Points". 

              John DR Leonard, plaintiff, intrigued by the Harrier jet for 7,000,000 points set forth in pursuing the jet.  Leonard discovered that points can be purchased for 10 cents a point (Morales 2000), as such, he submitted an order form with 15 points and a check for $700,008.50.  After being rejected kindly by the defendant Leonard brought legal action against PepsiCo.  The court ruled in favor for PepsiCo as the commercial was not an offer to enter into a contract for the Harrier jet.

              The court cited a prior case in New York that the advertisement was nothing but an invitation to enter into negotiations (Lovett v. Fredrick Loeser & Co.).  The commercial aired by PepsiCo was defined by the court as an invitation to enter into negotiations, as such it is not an offer to enter into a contract.  The general rule of the Restatement of Contracts, as cited in this case, explains that "Advertisements of goods by display, sign, handbill, newspaper, radio or television are not ordinarily intended or understood as offers to sell".  Furthermore, there must be some language of commitment in the...