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Flying High on False Advertising

In the annals of American advertising law, few cases are as legendary—or as downright entertaining—as Leonard v. Pepsico, Inc., 88 F. Supp. 2d 116. Famously dubbed the “Harrier Jet case,” this lawsuit arose when John Leonard, a college student from Seattle, attempted to cash in on what he believed was an offer from PepsiCo for a fighter jet in exchange for 7 million “Pepsi Points.” What ensued was a legal odyssey that blended contract law, humor, and a crash course in how far “zany marketing” can fly before it stalls.

This blog explores the legal issues at play in Leonard v. Pepsico, its implications for contract law, and the lessons businesses can learn about advertising, humor, and the limits of consumer expectations.

The Ad That Started the Case

In 1995, Pepsi rolled out its “Pepsi Stuff” promotion, a marketing campaign designed to encourage soda drinkers to rack up Pepsi Points, which could be redeemed for branded merchandise. The campaign featured a television commercial showing various prizes, from T-shirts (75 points) to leather jackets (1,450 points). But the top price came at the end of the commercial: a Harrier Jet, shown landing dramatically at a high school as a teenager quipped, “Sure beats the bus.” The required price? 7 million Pepsi Points.

While most viewers recognized this as hyperbolic humor—a classic example of “zany advertising”—John Leonard saw an opportunity. Realizing he couldn’t drink his way to 7 million Pepsi Points (even with the most aggressive of soda habits), Leonard exploited a clause in Pepsi’s promotional materials allowing points to be purchased for $0.10 each. He sent Pepsi a check for $700,008.50 (covering the cost of 7 million points plus the 15 actual points he had collected) along with an order form requesting a Harrier Jet.

Pepsi’s response? They rejected Leonard’s order, explaining that the jet was not part of the actual Pepsi Stuff catalog and that the commercial was “clearly a joke.” Leonard, undeterred, filed a lawsuit seeking specific performance: the delivery of a Harrier Jet.

The Legal Turbulence: Was It an Offer?

The central question in Leonard v. Pepsico was whether PepsiCo’s commercial constituted a binding offer. Leonard argued that it did. He contended the ad presented clear terms—7 million points for a Harrier Jet—and that he had unequivocally accepted by tendering payment.

The court, however, saw things differently. Drawing on well-established principles of contract law, Judge Kimba M. Wood ruled in Pepsi’s favor, finding that the commercial was not an enforceable offer. Why? Let’s break it down:

1. Advertisements Are Generally Not Offers: Under contract law, advertisements are typically considered invitations to negotiate rather than offers. The Restatement (Second) of Contracts explains that ads usually lack the specificity and intent required to constitute a binding offer. Instead, they invite customers to make offers by, for example, submitting an order form or entering a store to make a purchase.
2. Objective Reasonableness: For a contract to be formed, an offer must be one that a reasonable person would interpret as serious. The court concluded that no objective person could believe Pepsi was seriously offering a multi-million-dollar military-grade jet—normally priced at around $23 million—for $700,000 worth of Pepsi Points. The ad’s humor, coupled with the absurdity of a Harrier Jet being used as a “school bus,” made the commercial an obvious joke.
3. The Statute of Frauds: Even if the commercial had constituted an offer, the alleged contract would have been unenforceable under the Statute of Frauds, which requires certain contracts—like those for the sale of goods over $500—to be in writing and signed by the party to be charged. Pepsi had never signed anything indicating it intended to transfer a Harrier Jet.

Lessons in Law and Marketing

The Harrier Jet case may seem like a quirky footnote in legal history, but it offers critical lessons for businesses, particularly in the age of viral marketing and social media.

1. Clarity in Advertising

While humor can be an effective marketing tool, companies must be cautious about how their promotions might be interpreted. Pepsi likely never imagined someone would take its Harrier Jet ad literally, but Leonard did—and he wasn’t alone. The court noted that Pepsi later revised the ad to increase the required points to 700 million and added the phrase “Just Kidding” for good measure. Ensuring promotions are clear, even when humorous, can prevent costly misunderstandings.

2. The Limits of Puffery

Courts have long recognized that advertisements often engage in “puffery”—exaggerated claims meant to entertain or entice, not to be taken literally. For example, no one expects to “find happiness” in a bottle of soda or actually “become a legend” by wearing a certain brand of shoes. But there’s a fine line between puffery and potential liability. Companies should ensure their humor doesn’t stray into promises that could be misconstrued as genuine offers.

3. The Reasonable Consumer Standard

The ruling in Leonard v. Pepsico hinged on what a “reasonable person” would understand. This standard is a cornerstone of advertising law. Businesses must consider whether their messaging could mislead an average consumer. The Federal Trade Commission (FTC) frequently uses this standard when assessing claims of false advertising.

4. Avoiding Frivolous Litigation

Pepsi’s decision to modify its commercial after Leonard’s demand underscores the importance of proactive risk management. While Pepsi ultimately prevailed, the case dragged on for years, consuming resources and attracting media attention. Clear disclaimers and thoughtful legal vetting of promotional materials can help companies avoid becoming the next cautionary tale.

Why the Case Still Matters

Leonard v. Pepsico remains a favorite topic in law schools, where it is used to teach foundational principles of contract law. Beyond the classroom, it serves as a reminder of how legal disputes can arise from even the most outlandish scenarios—and how humor in advertising, while powerful, can sometimes backfire.

In the modern era, where viral marketing campaigns often blur the lines between reality and satire, the lessons of the Harrier Jet case are more relevant than ever. Businesses must strike a balance between creativity and clarity, ensuring their campaigns delight without confusing or misleading their audience.

As for John Leonard? While he didn’t get his Harrier Jet, he earned a place in legal history—and perhaps a lifetime supply of Pepsi anecdotes.

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