Legal Case Summary
Summary: Leonard v. PepsiCo is a contract law case concerning an advertisement issued by PepsiCo that was misinterpreted as a legitimate commercial offer.
Facts
In 1995, PepsiCo launched an advertising campaign that featured a fictional fighter jet, the 'Harrier II', in the company's commercial. The advertisement jokingly included the jet in a list of items that could be redeemed with beverage points. Business Student, John Leonard concluded that the commercial constituted a legitimate offer and collected the necessary points to claim the jet.
Leonard submitted an order form with a $700,008 check (the cost of purchasing additional points), expecting to receive the Harrier II jet. PepsiCo refused, citing the commercial as obviously humorous and refusing to fulfil Leonard's request.
Issues
The main legal issues discussed encompassed whether an advertisement for a product can constitute an offer under contract law and whether the Terms and Conditions mentioned in the commercial were sufficiently definite to form a contractual relationship. Moreover, the court had to examine whether an average, reasonable person could realistically believe that PepsiCo had been making an earnest offer, hence could the advertisement be taken seriously.
Analysis
Leonard v. PepsiCo case delineated the difference between an advertisement and a legitimate offer for contract. The decision reinforced the objective theory of contract law and served as a reminder of the need for advertisements to maintain a clear distinction between humorous extravagance and serious commercial offers.
Decision
The judgment made by both the District Court and affirmed by the U.S Court of Appeals upheld the notion that no legal contract had come into existence. The court stated that no objective person could reasonably have concluded that the commercial actually offered a Harrier II jet. Furthermore, the court asserted that if a legitimate offer was made, it wasn't possible to fulfil due to legality surrounding the possession of military-grade weaponry by civilians.
References
Reference list in the Harvard style of referencing.
- 'Leonard v. PepsiCo, 88 F.Supp.2d 116 (S.D. N.Y. 1999)', Case Finders,4292
- 'Leonard v. Pepsico, Inc., 88 F. Supp. 2d 116 (S.D.N.Y.1999)', West's Federal Supplement, 2d
- Chen, J.J. (2002), 'Flights of Fancy: An Analysis of the “Pepsi Points” Case', Legal Times
Journalist Brief
In 1999, business student John Leonard, after watching a Pepsi commercial, decided to take the company at their word and attempted to purchase a Harrier II jet advertised as part of their rewards program. Despite submitting the necessary points and a cheque of $700,008 (to purchase additional points), Leonard's request was rejected by PepsiCo. They argued that their commercial was intended as a joke. The case went to court, where the judges agreed with PepsiCo, ruling that no reasonable person could seriously believe the company was offering a multi-million dollar fighter jet. This case illustrates the need for clarity in advertisements and offers.
FAQs
What was the ruling in Leonard v. Pepsico, Inc.?
Answer: The court ruled in favour of PepsiCo, stating the advertisement could not be interpreted as a legitimate contract offer, particularly for a military-grade jet.
What is significant about the case Leonard v. Pepsico, Inc.?
Answer: The case demonstrated the clear distinction that needs to be drawn between advertisements and legitimate offers for contract. It serves an exemplary function in law school studies.
What law applies in Leonard v. Pepsico, Inc?
Answer: The case was primarily concerned with Contract Law, particularly focusing on the formation of a contract.
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