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Contracts The Seattle Man Who In 1999 Essay

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Contracts The Seattle man who in 1999 attempted to cash in points from a soft drink maker for a Harrier jet had his court case rejected because the advertisement concerning the jet was not considered to be a valid contract to which the company was bound. This calls into question the nature of contracts and advertisements. This paper will discuss contract law both in general terms and in terms of how it pertains to advertisements.

Nature of Contracts & Objective Theory of Contract

There are four elements of a valid contract: mutual consent ("meeting of the minds"), offer and acceptance, consideration, and good faith. In addition, the contract must be legal in order to be enforceable (Larson, 2003). The Harrier jet case fell apart on the issue of offer and acceptance as pertains to advertising, but there are other legal issues at work as well. One of these other issues is the objective theory of contract. The theory is a principle in law that "the existence of a contract is determined by the legal significance of the external acts of a party to a purported agreement, rather by the actual intent of the parties" (Farlex, 2011). The objective theory of a contract, therefore, relies on the believability of a purported offer for its legal worth. With respect to the Harrier jet, the soda company's claim that no valid offer was tendered rests on the objective theory of a contract....

Since the advertisement's claims about the cost of the jet resulted in a theoretical purchase price around $700,000. It was ruled that this was clearly not a serious offer because the actual price of a Harrier jet was $23 million. The plaintiff should have reasonably known that the advertisement was not serious.
Opinion

I believe that the court upheld that there was not a valid agreement here because the court understood that the soda company had no intent of offering a Harrier jet for the equivalent of $700,000. This would result in a staggering loss for the company. While companies do occasionally take losses on sales, this would not be a reasonable loss, to sell a fighter jet at far less than cost. Additionally, the soda company is not in the business of selling fighter jets, a fact of which the plaintiff must have been aware. Under either the objective or subjective theory of a contract, there was no evidence of a bona fide contract in this situation.

Additionally, it must be considered whether the advertisement and subsequent agreement to purchase the jet by the plaintiff constitutes a valid contract. Typically, an advertisement does not constitute an offer, but is rather an "invitation to treat." The normal interpretation of a sale contract is that the customer makes the offer to purchase the product and then the company agrees to sell the product…

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Works Cited:

Farlex. (2011). Objective theory of a contract. Free Dictionary. Retrieved April 8, 2011 from http://legal-dictionary.thefreedictionary.com/Objective+Theory+of+Contract

Larson, A. (2003). Contract law -- an introduction. ExpertLaw. Retrieved April 8, 2011 from http://www.expertlaw.com/library/business/contract_law.html
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