Commercial Transactions Contracts - Case Study Example

PepsiCo only gave a humorous advert. John did not get into the advert to prove whether it was true or not. Further, according to this theory, the third party (Jury.) will only determine where the contract arises.

In John's case, the contract does not arise, as all valid essentials to constitute a contract were not taken into consideration. The court held that there was no valid contract simply because this case was a mere advert that did not consist of the requisites of a valid contract like offer and acceptance. There is also no agreement as well as an object to contract for. Advertisements are generally not considered as advertisements. This is because an offer it must be made to a specific person and not public.

Therefore advertisements, which are made to the public, in general, cannot be an offer. In a reward situation, the offer is made to only one person who performs that task. The task to be performed in a reward situation is to be done by one person. For instance, if 'A' offers a reward to anyone who will recover his lost property, no one is bound to recover the lost property but 'A' is bound to give the promised reward to anyone who may recover the property. Thus in Leonard's case, the company was not bound to reward anybody on completion or on fulfilling their requirement.

Therefore Pepsico only aired an advert to encourage its consumers to consume more. In this case, advertisements do not fall under unilateral contracts, as an advertisement is not an offer itself.