Week Five Discussion: Pepsi’s Harrier Jet 

Watch the following advertisement:

Pepsi Harrier Jet Commercial 1 (Links to an external site.)

Please discuss the following case study and determine whether there should be a valid contract between Leonard and Pepsi Co. 

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.

Business Law Student Responses

Student 1

Ruthie

Hello classmates and professor,

1) Define the elements of a contract? A contract is a legally binding agreement. That cannot be broken by not a joke or telling someone that what did for your company is not real because they did the labor for you. page 210

2) What are the elements of an offer and an acceptance? It is to wear Pepsi gear and look like the actor on television. That would get Pepsi merchandise by drinking a lot of soda. page 210 

3) Did PepsiCo make an offer? Pepsi Co did offer it in the commercial, but it was just advertising Pepsi drinking.

4) Did you Leonard accept? Maybe he does not accept the offer and wants Pepsi Co to reimburse his legal expenses and not be a part of Pepsi Co anymore. Or He did accept the offer and feel bad about that they thought it was a joke, page 210

5) Was there contact? Maybe yes it contacted that got broken when the lawsuit was released or maybe wasn’t a contract was made until the customer brought Pepsi product. Why or why not? It was because Pepsi did want their reputation ruined. page 210

Thank you,

Ruthie

Cite

Twomey, D. P., Jennings, M. M., & Greene, S. M. (2021). Anderson’s Business Law & The Legal Environment – Comprehensive Edition (24th Edition). Cengage Learning US. https://online.vitalsource.com/books/9780357363850 (Links to an external site.)

Archives – Los Angeles Times (latimes.com) (Links to an external site.)

Student 2

Carlene

Hello Professor and Classmates,

The elements of a contract are an agreement between competent parties based on the genuine assent of the parties that is supported by consideration, made for a lawful objective, and in the form required by law if any. A contract is based on an agreement. An agreement arises when one person, the offeror, makes an offer, and the person to whom the offer is made, the offeree, accepts. There must be both an offer and an acceptance. If either is lacking, there is no contract.

No, Pepsi Co did not make an offer, even though Mr. Leonard accept what he thought was an offer.  In one television ad, Pepsi Co pictured a Harrier jet as a satirical spoof on the prizes available under the campaign “Drink Pepsi Get Stuff”. They said if you gain 7, million points you will get a Harriet Jet and that is what Mr. Leonard did. Pepsi Co went as far as telling Mr. Leonard that he had the option of buying Pepsi Co points for 10 cents each which he also did. But in the end, it was not a legally binding contract.

No, there was no contract. To have a contract we must have an agreement between competent parties based on the genuine assent of the parties that is supported by consideration. Even though the jet was offered in the ad for 7 million beverage points. Which Mr. Leonard obtained and sent to the Pepsi Co. Along with other people who sent in their points and received T-shirts and glasses. Pepsi Co regards the ad as a joke and Mr. Leonard’s case was thrown out. 

An advertisement is an offer only when the advertisement specifies a clear, definite, explicit form of acceptance.  Personally, I believe that their ad was misleading the public and Mr. Leonard should have gotten some form of settlement.

Reference:

Twomey, D. P., Jennings, M. M., & Greene, S. M. (2021). Anderson’s Business Law & The Legal Environment – Comprehensive Edition Chapter 11 Contracts. Pages 210 & 211 (24th Edition). Cengage Learning US. https://online.vitalsource.com/books/9780357363850

YouTube. (2007, November 5). Pepsi Harrier Jet Commercial 1https://www.youtube.com/watch?v=ZdackF2H7Qc

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