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''Pepsi, where's my jet?'' and English Contract Law

Gemma Shepherd-Etchells

13th January 2023

The Netflix show “Pepsi, Where’s My Jet?” has had audiences captured with its retelling of the US case of Leonard v Pepsico Inc. But how would this be decided under English Contract Law?

This case concerned a promotion Pepsi was running where Pepsi points found on their products could be exchanged for merchandise such as Pepsi branded sunglasses, hats or jackets. As part of the TV advertisement for this campaign they purported to offer a US military grade Harrier II jump jet for 7,000,000 Pepsi points. This caught the attention of student John Leonard who found a loophole in the promotion where points could be purchased for 10 cents, in order to add to existing points consumers had accumulated and the promotional merchandise bought. He therefore convinced investors to lend him the $700,000 to obtain the jump jet from Pepsi and sent them a cheque for the full amount, plus some promotional points.

Pepsi failed to send him the jet and initially offered him a voucher for some free drinks, however they did start negotiations with him, resulting in him launching an action in the US courts for breach of contract. This claim ultimately failed as the court found that Pepsis never meant to intend to form a contractual offer with its advert for a Harrier jet in exchange for its promotional Pepsi points. They saw that no reasonable person would believe that Pepsi was doing this, offering a jet worth over $37,000,000 for $700,000 which had not been decommissioned by the US military and therefore was not available for sale. Furthermore, the court saw that the advert was obviously in jest, as they pointed to the fact that it showed a college student arriving to college with a parking space being provided for him which would not be allowed.

Watch the original advert here:

Question Time

Applying your knowledge of contract law, how would this case be decided in under English Law?

Let’s take some elements needed to form a binding contract and assess it in turn.

Offer and acceptance - Did Pepsi make a unilateral offer? This case could be likened to Carlill v Carbolic Smokeball Co where the Carbolic Smoke Ball Company advertised their product with precise instruction and when Mrs Carlill bought the product and used it in accordance with the instructions she was accepting the offer. Did Mr Leonard do the same?

Consideration -This is essential for a valid contract as the law requires a bargain and not a gift, meaning that both parties to the contract must give something to each other in exchange. Consideration can include items in a promotion such as the Pepsi points in this case as can be seen from the Chappell v Nestlé case. Here a dispute arose over Nestlé’s running of a promotional offer swapping chocolate bar wrappers from vinyl records. Looking at consideration in this matter this was seen to be valid, as the chocolate bar wrappers were said to be adequate consideration in exchange for a vinyl record, despite them having no monetary worth. Therefore, would this mean that Pepsi points could form the basis of a contract and be regarded as adequate consideration?

Intention to create legal relations - Business agreements are presumed to be legally binding, but was this a business agreement between Pepsi and Mr Leonard?

Pepsi obviously tried to argue that it wasn’t, and they had the burden of proving this. Offers of a free gift can still be legally binding if they are made to promote a business as was seen in Esso v Commissioners of Customs and Excise. Here Esso gave a World Cup coin with every four gallons of petrol purchased and for tax purposes this was deemed to be legally binding.

Would it really be held that Pepsi actually intended for their offer to be legally binding? Was the offer from Pepsi definite in its terms?

What are your thoughts? This would form the basis of a fantastic discussion in class.

Gemma Shepherd-Etchells

Gemma is an experienced Law teacher and examiner.

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