Pepsi Co ran an ad and promotional campaign in 1996 called the “Drink Pepsi Get Stuff” campaign.  The enormously successful campaign allowed customers to claim prizes in exchange for points on PepsiCo beverage containers, and points could be combined with cash payments to obtain prizes.  The campaign was so successful that the second round of ads and promotions was not run because the prizes were nearly exhausted.

 

In one television ad, Pepsi Co pictured a Harrier jet as a satirical spoof on the prizes available under the campaign.  The jet was offered in the ad for 7 million beverage points.  Harrier jets are made only for the Marine Corps and are not sold in the open market.  They cost $33.8 million each and can be produced at a rate of only one dozen at a time.

 

John Leonard, a 21-year-old business student, called Pepsi Co and was told he would need to drink 16.8 million cans of Pepsi in order to obtain the required points.  He was also told that he had the option of buying Pepsi Co points for 10 cents each.  Leonard developed a pool of investors (Pepsi drinkers) and delivered 15 PepsiCo points and a check for $700,008.50 for the remaining 6,999,985 points plus shipping and handling.

 

PepsiCo refused to provide Leonard with a Harrier jet because it said the ad was not an offer but a joke.  Leonard filed sue but PepsiCo had already filed a pre-emptive suit asking that Leonard’s suit be dismissed and declared frivolous and that PepsiCo should be reimbursed for its legal expenses.

 

(1) Define the elements of a contract?

 

(2) What are the elements of an offer and an acceptance?

 

(3) Did PepsiCo make an offer?  

 

(4) Did Leonard accept? 

 

(5) Was there a contract?  Why or why not.  Discuss.

 

https://www.youtube.com/watch?v=ZdackF2H7Qc

 

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