Objective Theory of Contracts
A contract is a legal agreement between two parties with terms and conditions that express the agreement. For it to be valid and to be considered as legal, it requires four elements. The first element is the demonstration of two parties that they agree and understand what the contract entails and the essential elements in it. The second element is a consideration of the contract; this means that something of value has to be exchanged by each of the parties. This includes goods or services, money or a pledge to do an impressive thing that has value (Laurence, 2005).
The two parties have to sign the agreement signifying that they agree to its terms and condition and are ready to enter into the contract. This does not mean that oral contracts are not valid; they can become valid only under certain situations. The last element is a consideration of the legal competence of both parties. Minors are not allowed to enter into the contract but can do so in the consent of their parents. Also, persons of unsound mind and those who lack authority have limited chances of entering into the contract.
The use of contract law is based on the objectivity of the contract. The objective theory of a contract states that, if the jury supposes that the parties are determined to form a contract, then the contract should be formed (Laurence, 2005). In the case of the Pepsi Co. and Leonard, there was no contract formed because the jury could not find any intention of the two parties to enter into an agreement. It is true that Pepsi offered a harrier jet to anyone with a mere seven million Pepsi points but that was meant for entertainment. I think the judge did not find any valid agreement because, from the advertisement, it was clear that, it was almost impossible to collect seven million points of Pepsi considering the price of each. Also, a harrier jet goes for a price of about 23 million dollars and would it would be absurd to give it away at seven million.
General advertisements are not considered as offers because a contract requires an offeror to direct his/her offer to a particular offeree who can be one person or a group of persons. This case differs from a reward situation because there was no reward that was offered by Pepsi Co. at any given time. It was just a simple advertisement which can not be said to be a unilateral contract because reward (which was lacking) forms the basis of this kind of a contract.