Chapter 14
Introduction
Case opener: The Problematic Promotion
A pepsi promotion encouraged consumers to collect "Pepsi points" and redeem them for merchandise
o If they did not have quite enough points for the prize they wanted, they could buy additional points for 10 cents each At least 15 original Pepsi points had to accompany each order In an early commercial for the promotion, three young boys are sitting in front of a high school, one reading his Pepsi Stuff catalog while the others drink Pepsi o All look up in awe at an object o A harrier jet swings into view and lands by the side of the school building next to
the bikes
o Several students run for cover and the wind stips a teacher down to their
underwear
The voice-over announces: "now, the more Pepsi you drink, the more great stuff you're
gonna get
An offer appears as 7,000,000 pepsi points for Harrier Fighter Leonard sent in 15 Pepsi points and 700,000 for Pepsi points in order to obtain the jet Pepsi said it was not available ad he sued them for breach of contract
1. Did Pepsi offer to sell the Harrier jet for 7 million points?
2. Did Leonard's submission of the order form constitute an acceptance of an offer?
Elements of the offer
The first element of a contract is the agreement, which is made up of an offer and an
acceptance
Formation of the agreement begins when the part initiating the contract, called the offeror, makes an offer to another party, called the offeree
The elements of an offer are
The Agreement Process
The offeree communicates intent to be bound to the terms of the offer to the offeror
The offer has been accepted,and thus a contractual agreement has been formed
0
Offer is properly communicated by the offeror to the offeree
Serious
The offer has been
The offeree rejects the offer or provides a counteroffer
terminated, and a contract
an agreement to the terms of the original offer
intent by the offeror to be bound to an agreement Reasonably definite terms
And communication to the offeree First element of the offer is intent o The offeror must show intent to be bound by the offeree's acceptance We interpret contracts using an objective standard, meaning the courts are
concerned only with the party's outward manifestations of intent, not internal though processes o The court's interpret the parties' words and actions the wat a reasonable person
would interpret them
In determining intent to enter into a contract, the court looks at the person's objective
manifestation of intent and does not try to interpret what the person may have been secretly thinking Preliminary Negotiations o An invitations to negotiate or an expression of possible interest in an exchange is not an offer because it does not express any willingness to be bound by an
acceptance
When you are either making an offer or attempting to begin negotiations about a
possible contract, you should use very prec