Executive Summary Leonard V. Pepsico

Topics: Contract, PepsiCo, Contract law Pages: 2 (518 words) Published: August 21, 2008
Executive Summary
Leonard v. PepsiCo

This case involved a contract dispute between Mr. John Leonard and PepsiCo Inc. arising from the claims that an advertisement by PepsiCo for a Harrier jet aircraft in exchange for Pepsi points was a valid contract. The court found that the advertisement was not an offer and ruled for the defendant.

In order for a contract to be valid there must be agreement, consideration, contractual capacity and the object must be lawful. In an agreement there must be a meeting of the minds which indicates mutual assent by both parties. There is no meeting of the minds when one side is obviously joking (Advice Company, 2008). If one side is to be held to a contract then the other side must give up something in exchange, which is called consideration. Both parties to a contract must have the capability or capacity to enter into a contract. A drugged or mentally-impaired person has impaired capacity and chances are a court may not hold that person to the contract (Advice Company, 2008).

The objective theory of contracts holds that the intention to enter into a contract is judged by the reasonable person standard (would a reasonable person see it to be true). An offer that was made as part of a joke or gets would not be considered a valid contract under the objective theory. This offer of a Harrier jet was a gimmick that was added to the advertisement as a method of injecting humor and entertainment to the advertising campaign. Another reason that this was not a valid contract is that courts generally do not consider advertisements to be valid offers. Generally an advertisement is considered to be an invitation to make an offer (Cheeseman, 2006).The advertisement may seem like it would be a unilateral agreement in that it offered items to people that performed the act of submitting Pepsi points. The advertisement showed a wide array of items but never stated that they would offer every item. There was even a statement that items...

References: Advice Company, (2008). General practice - contract law - elements. Retrieved August 11, 2008,
from FreeAdvice.com Web site: http://law.freeadvice.com/general_practice/contract_law/779/
Cheeseman, Henry R. (2006). Contemporary business and online commerce law. Fifth Ed..
Upper Saddle River, N.J.: Prentice Hall.
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