leonard versus pepsico also known as the pepsi points case is a case tried in the united states district court for the southern district of new york in 1999 it is an entertaining and somewhat curious illustration of certain aspects of the rules surrounding contractual offers the background to the case is a tv commercial that pepsico the beverage maker ran in the 1990s the commercial informed customers that by consuming pepsi they could collect pepsi points and exchange them for various items let's have a look at that commercial [Music] introducing the new pepsi stuff catalog [Music] now the more pepsi you drink the more great stuff you're going to get it sure beats the bus [Music] inspired by this commercial a young business student by the name of john leonard set out to obtain the harrier fighter jet that appears at the end of the commercial leonard later explained that he is typical of the pepsi generation young with an adventurous spirit and the notion of obtaining a hairier jet appealed to him enormously leonard first thought he could obtain the 7 million pepsi points needed for the harrier jet by consuming pepsi products but it soon became clear to him that he would not be able to buy let alone drink enough pepsi to collect the necessary pepsi points fast enough re-evaluating his strategy leonard realized that buying pepsi points from pepsi directly which was permissible under the points program would be a more promising option through wealthy acquaintances he raised about seven hundred thousand dollars which would have been sufficient to collect the necessary amount of points leonard submitted a check to pepsi for 700 000 and filled in the required points order form in which he indicated that he was purchasing 7 million points and that he was ordering one harrier jet pepsi however refused to deliver the points and its advertising agency wrote to the plaintiff saying that leonard was probably joking and that no reasonable person would think that there is an offer for a jet leonard did not give up and brought a lawsuit against pepsi demanding the points and the fighter jet the issue for the court to decide was whether the commercial and the pepsi points program had been an offer by pepsi inviting consumers to purchase a hairier jet the court answered in the negative holding for pepsi and denying the existence of a valid offer for the purchase of the jet advertisements are not usually offers the court explained they are normally solicitations for offers that is they invite others to submit their own offers typically consumers that see an advertisement need to submit an order form which then needs to be accepted by the seller the court cited the comment to section 26 of the restatement second of contracts which in relevant part reads as follows advertisement of goods are not ordinarily intended or understood as offers to sell it is of course possible to make an offer by an advertisement directed to the general public but there must ordinarily be some language of commitment or some invitation to take action without further communication the court stated that there is a limited exception to the rule that advertisements do not create any power of acceptance in potential offerees this exception applies where the advertisement is clear definite and explicit and leaves nothing open for negotiation in this case however the court found that pepsi's commercial was not specific enough to constitute an offer the details of the pepsi points program were in a separate catalog and the commercial itself failed to clarify the details of how the purchase of the jet would work and what the conditions were was it reasonable for leonard to think that there was an offer for a jet again this has to be judged using an objective reasonable person standard applying such a standard it was likely not reasonable to assume that there was an offer of this kind was the commercial also evidently done in jest as the court found according to the court a reasonable viewer would understand such advertisements as mere puffery not as statements of facts seven hundred thousand dollars would be far too cheap to get a hairier jet which was valued at 23 million dollars at the time as a final point the court also noted that the applicable new york law and its statute of fraud's provision required that any contracts for the sale of goods that are worth more than 500 must be in writing this requirement had not been met here as the alleged offer had not been made in writing but rather in the form of a tv commercial based on all these grounds therefore leonard's claim failed nevertheless just to be on the safe side pepsico changed its advertisement following the lawsuit and changed the number of points required for the jet from 7 million to 700 million