Free NPR for Life

I have a deal for you. Anyone who gets the NPR logo tattooed in a visible place on their body can have free radio for life. OK, that is not a serious offer, but Domino’s Pizza in Russia made a similar proposition with the reward of free pizza for life. The response was so overwhelming that the local franchisee withdrew the proposal after what was only four days of a planned two-month promotional campaign. The franchisee is apparently honoring its promotion, at least for those who got a tattoo in the first four days. The promotion, however, raises the question of when does a request to action create a contract? A binding contract requires an offer and an acceptance. If I offer you $25 to mow my lawn, you can say “I accept,” and we have a contract.

Depending on the context, you might instead just go ahead and mow my lawn. Now, you will have accepted by performance. If any of you are driving over to my house at this very moment to mow my lawn, you are not going to get $25. I am not being serious, but how are you to know?

In 1891, the Carbolic Smoke Ball Company claimed it could prevent influenza. In an advertisement, the company said it would pay one hundred pounds to anyone who used the smoke ball and became sick. Money was on deposit at a bank to show the company’s “sincerity in the matter.” Not surprisingly, inhaling carbolic acid from a smoke ball was not a particularly effective way to prevent the flu. The court held the company’s advertisement was an offer to create a contract, and the use of the smoke ball was acceptance of the offer. By the way, if you are thinking that the Carbolic Smoke Ball would be a great name for a law-school gala, our student bar association already has beat you to it. The lesson of the Carbolic Smoke Ball was lost on the manager of a Hooter’s Restaurant who promised his servers a “Toyoda” to whomever sold the most beer in a month. At the end of the month, the manager presented a Star Wars doll – a “Toy Yoda” – to the winning server. The manager said his offer was a joke, but the lawsuit settlement for breach of contract involved enough money to purchase something more substantial with four wheels.

In another case, PepsiCo ran a promotion where customers could redeem Pepsi Points for products like a t-shirt which cost 75 Pepsi Points. One of its advertisement showed a teenager in a Harrier military jump jet, only seven million Pepsi Points the advertisement said. As it turned out, one could just purchase that many points for about $700,000. When a customer tendered a check for $700,000 and no Harrier jet was forthcoming, he sued and lost. The court ruled that no reasonable person could believe Pepsi intended to make an offer to sell a $23 million military-grade jet for that amount of money.

It is not always commercial businesses. In a television interview in a high-profile murder case, a criminal defense lawyer said he would pay $1 million to anyone who could get off a flight in the Atlanta airport and get to a certain hotel within twenty-eight minutes. The impossibility of the task was key to his client’s alibi. An enterprising law student recorded himself doing that what the lawyer said was impossible and demanded payment. The court said the lawyer’s hyperbolic statement was not an offer to make a contract, nor had it been a particularly effective defense strategy as the client had been found guilty.

If an objective listener would understand words to be an offer, the courts will enforce a contract. Secret intentions do not matter. If you have a million-dollar offer, make sure you mean it.