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Rights and Obligations for Hervier Jet Advertisting of a contract

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In 1999, a Seattle man took a popular soft-drink company seriously when one of its commercials made an offer of a Harrier jet, the famous high-tech jump jet used by the U.S. Marines. In a TV commercial that aired in 1995, the company jokingly included the Harrier as one of the prizes that could be received with a mere 7 million company points. Although that sounds like a lot of points to get from drinking the soft drink company's products (roughly 190 drinks a day for 100 years), the company also allowed customers to purchase points for 10 cents each.

The man did the math and discovered that the cost of the 7 million points needed for the jet was $700,000. He then put together a business plan, raised the $700,000 from friends and family, and submitted 15 points, the check, and an official order form along with a demand for the Harrier jet.

The company wrote back, stating that the Harrier jet in the commercial was simply used to create a humorous and entertaining advertisement. They apologized for any misunderstanding or confusion people may have experienced and enclosed some free product coupons.

The free coupons did not satisfy the man, who then took the soft drink company to court. Finally, a federal judge for the Southern District of New York held that the company was only joking when it implied in its ad that it was giving away fighter jets. The judge noted that because the jets sell for approximately $23 million, no one could have concluded that the commercial actually offered consumers a Harrier jet. Instead, this was a classic example of a deal that was too good to be true.

Write a paper that answers the following questions:

* What are the four elements of a valid contract?
* What is the objective theory of contracts?
* How does the objective theory of contracts apply to this case?
* In your own words, why do you think the court held that there was not a valid agreement here?
* Are advertisements generally considered offers? Explain.
* How does this case differ from a reward situation in which a unilateral contract is formed upon completion of the requested act?

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This explanation provides you a comprehensive argument relating to Rights and Obligations of a contract

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* What are the four elements of a valid contract?
There are two separate parsons entering into an agreement (offer and acceptance). The parties must be qualified to enter into an agreement. There is consideration that is being received by both the parties. The purpose of the contract is legal. In this case even if one person is a soft drinks company it is still a valid contract. In this case the consideration is the $700,000 the person is giving and the 'goods' that he wants is the Harrier aircraft. Since the Seattle man is of legal age he is qualified to agree to terms and considerations in the contract. Similarly, the soft-drinks company is also qualified to enter into a valid contract.

* What is the objective theory of contracts?
The objective theory of contracts says that a binding agreement exists between two or more parties if a reasonable person would judge the objective acts of the parties and the associated circumstances that an offer has been made and accepted. It is believed that the common law had long applied an ...

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  • MBA, Eastern Institute for Integrated Learning in Management
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