plesae see the attached file.

RESPONSE:

Interesting case, indeed. I will respond to your questions in the order that you presented them.

1. What are the four elements of a valid contract?

The following definition includes the four elements that make a contract valid:

Contract

An agreement between persons, which obliges each party to do or not to do a certain thing. Technically, a valid contract requires an offer and an acceptance of that offer, and, in common law countries, consideration. (http://duhaime.sprynewmedia.com/dictionary/dict-c.htm#C)

Offer
A explicit proposal to contract which, if accepted, completes the contract and binds both the person that made the offer and the person accepting the offer to the terms of the contract. See also "acceptance".

Acceptance
One of three requisites to a valid contract under common law (the other two being an offer and consideration). A contract is a legally binding agreement between two or more parties which starts with an offer from one person but which does not become a contract until the other party signifies an unequivocal willingness to accept the terms of that offer. The moment of acceptance is the moment from which a contract is said to exist, and not before. Acceptance need not always be direct and can, in certain circumstances, be implied by conduct (see acquiescence below).

Acquiescence
Action or inaction which binds a person legally even though it was not intended as such. For example, action which is not intended as a direct acceptance of a contract will nevertheless stand as such as it implies recognition of the terms of the contract. For example, if I display a basket of fruit in a marketplace and you come by, inspect an apple and then bite into it, you have acquiesced to the contract of sale of that apple. Acquiescence also refers to allowing too much time to pass since you had knowledge of an event which may have allowed you to have legal recourse against another, implying that you waive your rights to that legal recourse (http://duhaime.sprynewmedia.com/dictionary.htm).

Another interesting article that you may want to refer to is on-line at URL: http://duhaime.sprynewmedia.com/contract/ca-con1.htm introducing the idea of definitions of contracts change by country. Be sure to read this article and apply the correct definition (i.e., as in your course content). For example, the United States adheres to the Uniform Commercial Code (UCC) (refer to site http://www.law.cornell.edu/ucc/ucc.table.html for full details). Definitions are presented on this last site (see http://www2.law.cornell.edu/cgi-bin/foliocgi.exe/ucc1/query=binding+contracts/doc/{@37}?). For convenience I attached the UCC's definition of contract (see attachment).

2. Describe the objective theory of contracts. How does that theory apply to this case?

Washington follows an objective manifestation test for contracts, looking to the objective acts or manifestations of the parties rather than the unexpressed subjective intent of any party." Wilson Court Ltd. P'ship v. Tony Maroni's, Inc., 952 P.2d 590, 594 (Wash. 1998) (citing U.S. Life Credit Life Ins. Co. v. Williams, 919 P.2d 594, 597 (Wash. 1996). The objective manifestation theory of contracts emphasizes the outward manifestation of assent made by each party; thus the mutual assent of the parties must be gathered from the parties' outward expressions and acts. City of Everett v. Estate of Sumstad, 631 P.2d 366, 367 (Wash. 1981). (see http://www.12americans.com/reply_brief.htm for more details as many of the details apply indirectly to this case).

Another exceptionally informative site is at http://duhaime.sprynewmedia.com/contract/ca-con2.htm#beware

So, then, does the theory apply to this case? For example, does the Court follow the objective manifestation test for contracts or did the court fail to follow the objective manifestation test for contacts when it ignored the totality of evidence manifesting the parties' intent and assent? (you may want to build this case as the case in http://www.12americans.com/reply_brief.htm ). Questions that come to mind are: Are there any outward manifestations of intent and assent presented to Pepsi by Mr. Leonard for the court to consider (i.e., the promise of a jet in the advertisement, the collecting of points, etc.)? The objective manifestation test does not require a formal offer. See Contracts, Calamari and Perillo, § 2-1, at 25 (it is possible to have mutual assent even though it is impossible to identify the offer and the acceptance) (http://www.12americans.com/reply_brief.htm). However, in this case, it is a question of reasonableness of the offer, not whether there was an offer or not.

However, another important feature of the law of contract is that where there is a dispute as to whether or not a contract exists, the courts will assess the situation not from the perspective of the parties, but from the perspective of a "reasonable man". In other words, the judge will want to decide if, given all the circumstances, a "reasonable man" would believe there to be a contract. An 1871 English case, Smith v. Hughes, summarized this principle as follows:
"If whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to terms proposed by the other party and that other party, upon that belief, enters into a contract with him, the man thus conducting himself would be equally bound as if he had agreed to the other person's terms."
Indeed, Judge Wood noted that since the jets sell for approximately $23 million each, "no objective person could reasonably have concluded that the commercial actually offered consumers a Harrier jet." (See http://www.12americans.com/reply_brief.htm as an example of objective theory application).

However, does the Court fail to follow the objective manifestation test for contacts by ignoring the totality of evidence manifesting the parties' intent and assent? (You may want to build this case as the case in http://www.12americans.com/reply_brief.htm ). However, on some level, it seems to be unreasonable to expect a "Harrio jet." But, the objective manifestation test does not require a formal offer. See Contracts, Calamari and Perillo, § 2-1, at 25 (it is possible to have mutual assent even though it is impossible to identify the offer and the acceptance) (Source: http://www.12americans.com/reply_brief.htm). Is it not reasonable to think and, thus, interpret that a Company's advertisement means what is says? The Court said "no."

You may want to check out the site http://www.quebecoislibre.org/younkins1.html, which addresses the objective theory, rather indirectly though. However, some of the material may apply.

3.Why do you think the court held that there was not a valid agreement here?

Agreement and contract have slightly different meanings (see dictionary definition at http://duhaime.sprynewmedia.com/dictionary.htm).

As mentioned above, another important feature of the law of contract is that where there is a dispute as to whether or not a contract exists, the courts will assess the situation not from the perspective of the parties, but from the perspective of a "reasonable man". In other words, the judge will want to decide if, given all the circumstances, a "reasonable man" would believe there to be a contract. An 1871 English case, Smith v. Hughes, summarized this principle as follows:

"If whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to terms proposed by the other party and that other party, upon that belief, enters into a contract with him, the man thus conducting himself would be equally bound as if he had agreed to the other person's terms."

In this case, the Court found that it was not a valid contract because "...since the jets sell for approximately $23 million each, "no objective person could reasonably have concluded that the commercial actually offered consumers a Harrier jet."

4. Are advertisements generally considered offers? Why or why not?

Although advertisements are generally offers; to be a valid contract there must also be mutual agreement, in theory at least. Although one could argue that Mr. Leonard' case against PepsiCo was valid and there was an offer, and that the necessary four components for a valid contract were present, to be valid is also has to be "reasonable." In other words, would most other people interpret the advertisement the same way as Mr. Leonard?

Visit site at http://www.tradingstandards.net/pages/a_issue.htm#compad for "New proposed comparative advertisement regulations" implemented for the protection of the customer (i.e., Mr. Leonard, in this case).

5. How does this case differ from a reward situation, where a unilateral contract is formed upon completion of the requested act?

UNILATERAL CONTRACT - A contract in which one party makes an obligation to perform without receiving in return any express promise of performance from the other party, such as an open listing contract, where the seller agrees to pay a commission to the first broker who brings in a ready, willing and able buyer (http://www.courtesytitle.com/title_info.htm#U).

Mr. Leonard seems to have interpreted the advertisement this way: "if I collect this number of points, I will receive my reward." However, the advertised reward was "unreasonably large," so the Court ruled in favor of the PepsiCo. What do you think? Do you think this was a fair judgment or is it "reasonable" that Mr. Leonard really believed the advertisement would reward him if he collected his points? Or would it have been more reasonable to contact the PepsiCo prior to such an endeavor (i.e., spending $700,000)?

You may want to check out "Ripoff Reports" listed by Consumer Advocates (http://www.ripoffreport.com/reports/ripoff8195.htm) who argue that the Court sides with the large corporations versus the customer. Also see website at http://www.tradingstandards.net/pages/a_issue.htm#compad for "New proposed comparative advertisement regulations" implemented for the protection of the customer (i.e., Mr. Leonard, in this case).

This is not exhaustive, but seems to touch on some of the main points for you to consider for your executive summary.