What can 7,000,000 Pepsi Points buy? - Offer and Acceptance in practice
This week’s Netflix top 10 includes a fascinating story on contract interpretation. ‘Pepsi: Where’s my jet?’ is a four-part documentary following John Leonard’s case against Pepsico to obtain, what he thought he was rightfully owed; a Harrier fighter jet.
Leonard v Pepsico – Background
In 1995, Pepsi embarked on an exciting advertising campaign in an attempt to be as popular as their competitor – Coca Cola. The premise of this campaign was to encourage customers to buy the fizzy drink and collect ‘Pepsi Points’ which could be exchanged for Pepsi branded merchandise. This television advertisement referred to the fact a leather jacket could be purchased for 1,450 points, sunglasses for 175 points and a Harrier fighter jet for a staggering 7,000,000 Pepsi Points. One student, John Leonard, fought to take them up on their offer for the jet.
Mr Leonard’s argument relied heavily on the fact that there was no fine print and customers were allowed to buy as many ‘Pepsi Points’ as they wanted. Pepsi contended the advert was obviously a joke. The Court eventually decided in favour of Pepsi determining that, amongst other things, the advertisement did not constitute an offer but even if it had done, no reasonable person would have thought Pepsi would offer a jet for a mere $700,000, the amount which was equivalent to 7,000,000 Pepsi Points.
Although Leonard v Pepsico is an American case, it raises interesting discussion surrounding the topic of offer and acceptance.
Offer and Acceptance
Under the laws of England and Wales, a contract is formed when the following key elements are present:
– Intention to create legal relations
– Certainty of terms
We will never know for sure whether a Court in England and Wales would have decided this claim in the same way, but in the case of G Percy Trentham Ltd v Archital Luxfer, the Court suggested that the court will look to ‘the reasonable expectations of honest men’ when determining the intention to create legal relations. It therefore looks like, if this claim had been heard in England or Wales, the outcome might have been similar.
If you would like further information about the interpretation of your contract, our Commercial Dispute Resolution team would be happy to assist.