Cengage Advantage Books: Foundations of the Legal Environment of Business 3rd Edition by Marianne Jennings

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Leonard v. PepsiCo 210 F.3d 88 (2d Cir. 2000)*
Does "Pepsi Stuff" Include a Harrier Jet?
Facts
PepsiCo (defendant/appellee) ran a promotion titled "Pepsi Stuff," which encouraged consumers to collect Pepsi Points from Pepsi or Diet Pepsi packages and redeem these points for merchandise featuring the Pepsi logo. John Leonard (plaintiff/appellant), a resident of Seattle, Washington, saw a Pepsi Stuff commercial featuring a Harrier Jet as an example of "stuff." The ad showed a teenager in awe of stuff carrying subtitles such as "T-SHIRT 75 PEPSI POINTS," "LEATHER JACKET 1450 PEPSI POINTS," and "SHADES 175 PEPSI POINTS." Following these lesser items, a Harrier Jet swung into view and landed by the side of the teen's school building. A military drumroll sounded as the words "HARRIER FIGHTER 7,000,000 PEPSI POINTS" appeared. A few seconds later, "Drink Pepsi-Get Stuff," appeared on the screen.
Inspired by this commercial, Mr. Leonard set out to obtain a Harrier Jet. Mr. Leonard could not collect 7,000,000 Pepsi Points by consuming Pepsi products fast enough, so through acquaintances, Mr. Leonard raised about $700,000. On March 27, 1996, Mr. Leonard submitted an Order Form, 15 original Pepsi Points, and a check for $700,008.50. At the bottom of the Order Form, Mr. Leonard wrote in "1 Harrier Jet" in the "Item" column and "7,000,000" in the "Total Points" column. On May 7, 1996, PepsiCo rejected Mr. Leonard's submission and returned the check, explaining that:
The item that you have requested is not part of the Pepsi Stuff collection. It is not included in the catalogue or on the order form, and only catalogue merchandise can be redeemed under this program.
The Harrier jet in the Pepsi commercial is fanciful and is simply included to create a humorous and entertaining ad. We apologize for any misunderstanding or confusion that you may have experienced and are enclosing some free product coupons for your use. Mr. Leonard responded via his lawyer:
Your letter of May 7, 1996 is totally unacceptable. We have reviewed the video tape of the Pepsi Stuff commercial... and it clearly offers the new Harrier jet for 7,000,000 Pepsi Points. Our client followed your rules explicitly....
This is a formal demand that you honor your commitment and make immediate arrangements to transfer the new Harrier jet to our client. If we do not receive transfer instructions within ten (10) business days of the date of this letter you will leave us no choice but to file an appropriate action against Pepsi....
Mr. Leonard filed suit, and PepsiCo moved for summary judgment. The court granted summary judgment, and Mr. Leonard appealed.
Judicial Opinion
PER CURIAM
We affirm for substantially the reasons stated in Judge Wood's opinion. See 88 F. Supp. 2d 116 (S.D.N.Y. 1999).
WOOD, District Judge
The general rule is that an advertisement does not constitute an offer.
An advertisement is not transformed into an enforceable offer merely by a potential offeree's expression of willingness to accept the offer through, among other means, completion of an order form.
Under these principles, plaintiff's letter of March 27, 1996, with the Order Form and the appropriate number of Pepsi Points, constituted the offer. There would be no enforceable contract until defendant accepted the Order Form and cashed the check.
The exception to the rule that advertisements do not create any power of acceptance in potential offerees is where the advertisement is "clear, definite, and explicit, and leaves nothing open for negotiation," in that circumstance, "it constitutes an offer, acceptance of which will complete the contract." Lefkowitz v. Great
Minneapolis Surplus Store , 251 Minn. 188, 86 N.W.2d 689, 691 (1957). In Lefkowitz , defendant had published a newspaper announcement stating: "Saturday 9 a.m. Sharp, 3 Brand New Fur Coats, Worth to $100.00, First Come First Served $1 Each." Mr. Morris Lefkowitz arrived at the store, dollar in hand, but was informed that under defendant's "house rules," the offer was open to ladies, but not gentlemen. The court ruled that because plaintiff had fulfilled all of the terms of the advertisement and the advertisement was specific and left nothing open for negotiation, a contract had been formed.
The present case is distinguishable from Lefkowitz. First, the commercial cannot be regarded in itself as sufficiently definite, because it specifically reserved the details of the offer to a separate writing, the Catalog. The commercial itself made no mention of the steps a potential offeree would be required to take to accept the alleged offer of a Harrier Jet. The advertisement in Lefkowitz , in contrast, "identified the person who could accept." Second, even if the Catalog had included a Harrier Jet among the items that could be obtained by redemption of Pepsi Points, the advertisement of a Harrier Jet by both television commercial and catalog would still not constitute an offer.
The Court finds that the Harrier Jet commercial was merely an advertisement.
Plaintiff's insistence that the commercial appears to be a serious offer requires the Court to explain why the commercial is funny. Explaining why a joke is funny is a daunting task; as the essayist E. B. White has remarked, "Humor can be dissected, as a frog can, but the thing dies in the process.... " The commercial is the embodiment of what defendant appropriately characterizes as "zany humor."
Case Questions
1. When does the court think an offer was made?
2. Why is whether the ad is funny an important issue?
3. Will Mr. Leonard get his Harrier jet? Why or why not?