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United States District Court for the Southern District of New York - 88 F.Supp.2nd 116, 88 F. Supp. 2d 116
Tags: Offer, Acceptance
See also: Morris Lefkowitz v. Great Minneapolis Surplus Store
tl;dr:
An advertised offer that is obviously a joke to any reasonable person cannot be the basis for a contract.Video Summary
Case Summary
In the case of Leonard v. PepsiCo (1999), the US District Court for the Southern District of New York ruled on a breach of contract claim related to redeeming Pepsi Points for a Harrier Jet. The plaintiff, John D.R. Leonard, participated in PepsiCo's "Pepsi Stuff" promotion, which allowed consumers to collect points and exchange them for merchandise. A TV commercial featured various items, including a Harrier Jet advertised for 7 million Pepsi Points.
Leonard obtained 15 Pepsi Points and sent a check for $700,008.50 to PepsiCo, requesting the Harrier Jet. PepsiCo rejected his order, stating the commercial was meant to be humorous and not a serious offer. Leonard sued for breach of contract, seeking either specific performance or damages. PepsiCo moved for summary judgment under Federal Rule of Civil Procedure 56.
The court sided with PepsiCo, finding no valid contract due to no objective manifestation of mutual assent. The commercial was considered a joke or exaggeration, and even if it was an offer, it lacked essential terms. There was no meeting of the minds or consideration for a binding contract.
This case highlights legal principles involved in contract formation and interpretation, such as offer and acceptance, definiteness of terms, and humor in advertising. It is relevant for understanding rights and obligations in the context of offers or claims.
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The court is considering whether PepsiCo breached a contract with the plaintiff by refusing to provide a Harrier jet in exchange for submitted Pepsi Points and payment. The lower court did not err in granting summary judgment as the Harrier Jet commercial was not specific enough to be considered an offer, and the absence of any words of limitation renders the alleged offer too indefinite to form a contract. Advertisements are generally invitations to negotiate and do not create a power of acceptance in the recipient. The court distinguishes between ordinary advertisements and promises of reward, citing legal cases involving offers of reward to support their argument. The Harrier Jet commercial was not a unilateral offer but an advertisement, and the plaintiff's reliance on "prove me wrong" cases is misplaced. Summary judgment is appropriate in contract cases when the non-moving party's interpretation is not "fairly reasonable."
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