Pepsi ran an advertisement on national television promoting its Pepsi Points program whereby consumers could obtain points by purchasing Pepsi products and then redeem the points for certain apparel and other items. An alternate way to accumulate points was to purchase them for a certain dollar figure. The Pepsi advertisement opened with the morning routine of a high school student. The commercial was based on a Top Gun movie theme and depicted the student wearing apparel such as a leather bomber jacket, a Pepsi T-shirt, and aviator sunglasses. For each item, the advertisement would flash the corresponding number of Pepsi points required to obtain the item. For example, when showing the actor with the aviator sunglasses, the advertisement featured the subtitle "Shades 175 Pepsi Points." The advertisement then showed a view of the cover of a Pepsi Stuff Catalog with a narration of "Introducing the new Pepsi Stuff Catalog" and the subtitle "See details on specially marked packages." Finally, the advertisement showed the student arriving at his high school in a Harrier fighter jet to the amazement of his friends and teachers. The student hops out of the jet and says, "Sure beats the bus." At this point, the subtitle flashed, "Harrier jet 7,000,000 Pepsi points."
Leonard filled out the Pepsi Stuff order form (located in the catalog produced by Pepsi). but since there was no mention of the Harrier jet. Leonard simply wrote in the item on the order form and sent the order to Pepsi with a check for 5700.000. the amount necessary to purchase the requisite points as stated in the advertisement. Pepsi refused to transfer title on the basis that no contract existed. The trial court ruled in favor of Pepsi. Leonard appealed, among other reasons, on the basis that the Pepsi advertisement was specific enough to constitute a valid offer of a unilateral contract through its advertisement.
SYNOPSIS OF DECISION AND OPINION The court ruled against Leonard. While acknowledging that certain advertisements could be an offer if the promise is clear, definite, and explicit. such was not the case here. The advertisement was not sufficiently definite because it reserved the details of the otter to a separate writing (the catalog). WORDS OF THE COURT. Requirements for Advertisements as a Unilateral Offer "In the present case, the Harrier Jet commercial did not direct that anyone who appeared at Pepsi headquarters with 7.000.000 Pepsi Points on the Fourth of July would receive the Harrier Jet. Instead, the commercial urged consumers to accumulate Pepsi Points and refer to the catalog to determine how they could receive their Pepsi Points. The commercial sought a reciprocal promise, expressed through the acceptance of, and in compliance with, the terms of the Order Form.... [T]he catalog contains no mention of the Harrier Jet."
Should a reasonable person seeing the television commercial reasonably believe that Pepsi would sell a $23 million Harrier jet for only $700,000?