Law of Contracts (Essay Sample)

Law of Contracts Author Institutional Affiliation COURSE####: Course Title Instructor Name Date Case background The 1999 Harrier Jet Case presented a new legal dimension from which to handle advertisement information. In the case, a Seattle man sued a company for refusing to honor its promise to award a fighter jet to any consumer that would earn7 million points from its sales promotion. What was intended as a light touch became a serious business opportunity to the man who together with his circle of friends raised $700,000 to meet the threshold of points required for the jet. The sales promotion had an option to purchase points. The company refused to honor the deal and the case ended in court. Despite the court shooting down the case, the advertisement had several legal implications revolving around the law of contracts. Legal factors in the scenario The scenario touches on some legal factors. First, this is a contract case where the plaintiff argues the company breached the terms to a contract. The plaintiff argued that the advertisement was an offer from the company to its customers to award a harrier jet subject to attaining the agreed upon number of points. Therefore, the plaintiff fulfilled the term by presenting 15 points and a check. However, the court decided there was no agreement in summary dismissal. The harrier jet did not form part of the catalogue the advertisement was referring to. There was no written agreement between the parties to the case. In addition, no consumer would have reasonably believed that the company wanted to offer a military jet worth $23 million. The case touched also on legal statutes such as Puffery, Statute of Fraud, and Restatement (Second) of Contracts all of which feature in this discussion in details. Elements of a valid contract A valid contract comprises of four valid elements. There must be an offer, acceptance, intent to forge a legally binding relationship, and consideration mostly in monetary form (Schwartz & Sepe, 2021). A valid contract must meet all these elements to be legally binding. In this case, the dispute surrounded the offer. The plaintiff argues that the advertisement made an offer of the fighter jet to the customers. A customer would receive a fighter jet if they accumulated 700,000 points in the sales promotion. However, the company contested this adding that the offer of a jet was meant as a joke to spice up the advertisement. In fact, the jet did not constitute the catalogue. The second element was an acceptance. The other party to a contract must accept the offer made in a contract. In this case, the plaintiff’s action meant the accepted the offer by meeting the threshold required for acquiring the jet. The third element is intent to forge a binding relationship. In this case, the two parties did not enter into a contract. In fact, there was no written agreement between the two. In any case, this was not a verbal contract since the two parties did not deliberate on the matter. Finally, there was a consideration in this case. Ironically, it came in the form of a fighter jet which the plaintiff was claiming from the defendant. Objective theory of contracts The case brings to the fore issues addressed by the theory of contracts. The theory of contracts states that an agreement will be legally binding in cases where a reasonable individual of sound would opine that there was an offer followed by acceptance (Bix, 2018). This theory basically demonstrates the spirit of contract law because in some cases it could be difficult to determine if a contract exist between parties. The theory comes in to erase the gray areas that some individuals might capitalize upon while contracting with others. The objective theory of contracts is applicable in this case. The company made an advert and seemingly made an offer of a fighter jet. In its assertions, it was lightening up the advertisement simply to attract the attention of the viewers and consumers. However, the plaintiff took the matter seriously. There was an offer of a jet since it defined the exact points needed to redeem the jet. Surprisingly, the plaintiff went out of his way to get an equivalent of 700,000 points demanded by the company leading to the court case. A keen analysis of the case reveals that there was no contract in this case. There was no way the company would offer a fighter jet which is an advanced military hardware to the consumers. To make it worse, the company did not have the jet in its possession implying that it would have been impossible to honor such a contract in the first place. A person in his sound mind would not believe that were was an offer and acceptance in this case. The plaintiff went over the top in laying claims for the jet. Research on valid agreement From the onset, the case seems outrageous and one which one would not believe if it did not happen. The plaintiff was seemingly pushing his luck in trying to manipulate legal loopholes to claim the harrier jet. Relying on the Restatement (Second) of Contracts, the advertisement did not constitute an offer to the consumers (Bar-Gill et al, 2019). In fact, it was not even directed towards any party in particular. To prove this, the company did not include it in the catalog and was simply a marketing gimmick to appeal to the consumer base. The Restatement (Second) of Contracts provides legal explanation of the law undertaken by experts. Such explanations are critical in analyzing confusing cases such as this one. The issue also touches on puffery which under law defines unrealistic or subjective as opposed to objective statement (Punjani et al, 2019). Puffery refers to an exaggerated claim that no reasonable individual can believe. Therefore, in this case, the company was simply acting in accordance to the puffery statute. The company could argue along this line that it relied on puffery to pass across the message to the consumers. Honestly, no company would offer a military warplane to customers as a part of a sales promotion. Therefore, why would any customer claim to have been offered such equipment? Finally, the case also elicits elements on the Statute of Frauds. In this case, certain contracts must comprise signed documents to be legally binding. Essentially, this covers goods of substantial worth. In fact, the law demands that contracts for goods worth above $500 must be in writing (Wen, 2020). The essence of this is to eliminate possible cases of perjury in a dispute. Parties in a dispute could make outrageous claims which they cannot prove in case such contracts fail to have written testimonials. Therefore, in this case, the Statute of Frauds is applicable. The value of the harrier jet is estimated at approximately $23 million. Therefore, the contract for such an asset needs to be in writing for it to be legally binding. Perhaps this presents the best defense for the case since there was no written argument. There was simply no way a verbal contract would have sufficed for an asset worth such an amount. Advertisement vs. offers There exists thin line between advertisements and offers. However, from a legal perspective, advertisements do not fit the description of an offer. They are simply an invitation to negotiate. They contain factual information which the consumers have the option to try out. For instance, a marketer advertising sweet oranges to the market cannot be held liable when the customer makes purchases and finds out that the oranges are not sweet. It was just an invitation to try out the offer. In the case of the company’s harrier jet, the company presented the jet in the advertisement. It was upon the defendant to consult the catalog if the plane was actually on offer. However, he went straight to argue that an invitation to bargain constituted an offer. Differences with reward situation A reward situation with a unilateral contract would be very different from this case. In a reward situation, the completion of the requested act would mark the contract legally binding. The party making the offer will have to deliver the reward to the recipient in the agreed format. In this case, there would be a clearly stipulated procedure for attaining the reward. It does not have to be directed to any party in particular. As long as th...