An offer is an act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms. Sometimes we forget that by making a valid offer, we give that power to the other person. Sometimes corporate officers forget the point. Nationwide Mutual Insurance Company wanted to energize a regional meeting, so it announced a contest for the best company slogan, to be used at the convention. “Here’s what you could win: His and Hers Mercedes. An all-expense-paid trip around the world. Additional prizes to be announced. (All prizes subject to availability.)”

David Mears and 184 other employees entered. Mears’s slogan, “At the Top and Still Climbing,” was the winner. One company officer told Mears that he had won the two cars, while another one said that the cars were just a joke. Ultimately, Nationwide informed Mears that the prizes were never meant seriously. The company did, however, use his slogan for its convention, and banners, booklets, and balloons all echoed with his phrase.

Mears failed to see the joke, and filed suit in federal court. The jury didn’t laugh, either. They awarded Mears $60,000, the value of two of the least expensive Mercedes. The trial judge gave a judgment n.o.v. for Nationwide, ruling that the terms of the agreement were too vague to enforce. On appeal, however, the Eighth Circuit Court of Appeals agreed with the jury, and reinstated the $60,000 damage award.

Questions:

1. Was this a bilateral or unilateral contract?

2. How can you tell?

3. Did Nationwide intend this offer to be taken seriously?

4. If Nationwide didn’t intend it to be taken seriously then why did the jury find that Mears’ accepted it and created a contract?

5. Aren’t the terms of this offer fairly vague?

6. What is a judgment n.o.v.?

7. What happened on appeal?

8. What lesson should we draw from this example?