Objective theory of contracts, John Leonard-vs-Pepsi Co.

Contract, Offer and acceptance, Consideration

1. What are the four elements of a valid contract?

Indeed there are four elements of a contract;

A. Agreement

B. Consideration

C. Contractual capacity

D. Lawful object

2. Describe the objective theory of contracts. How does that theory apply to this case?

We currently use contract law based on the objective theory of contracts. This states

that if an objective third party (the jury) believes the parties intend to form a contract, then a

contract should be found, meaning we prefer to interpret actions and words in such a way

that a contract exists rather than to interpret them to find there is no contract.


This theory does apply to this case. There is 2 ways to perceive this case, the first is the

way that John Leonard did. He believed that the harrier jet was one of the prizes he could

receive if he met all the obligations. Pepsi Co. stated that it was just a humorous act and

assumed that everyone would laugh and not take it seriously. When Leonard took this case

to court, the federal judge held the responsibility of the reasonable person, because the article

did not specify that there was a jury. He looked at the ad and agreed with Pepsi Co. There

was not intent to mislead. The judge used his common sense and considered that, who would

really offer a 23 million dollar jet to give away, and further more, no objective person could

reasonably believe that they were offering the Harrier jet to consumers.

3. Why do you think the court held that there was not a valid agreement here?

There was no formal agreement made, any reasonable level-headed person would

understand that they were indeed joking and the judge also saw the humor in the Harrior jet

offer. The judge determined that "an advertisement is not transformed into an enforceable

offer merely by a potential offeree's expression of willingness to accept the offer".

(www.scu.edu). Just because Leonard sent...
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