International Legal and Ethical Issues in Business Essay

1274 Words Sep 17th, 2011 6 Pages
Unit 3 Individual Project-Rights and Obligations
Travis Pernell
American InterContinental University
International Legal and Ethical Issues in Business
Instructor Kerri Holloway
April 3, 2011

This paper will discuss the four elements that make up a valid contract and the objective theory surrounding contracts. This paper will discuss how the objective theory applies to the Leonard v. Pepsico, Inc. case. The paper will also discuss how the court reached its decision to claim that there was not a valid agreement made between the two parties, and it will discuss why all advertisements are not considered offers.

Unit 3 Individual Project-Rights and Obligations In order for a contract to be valid, it must meet four
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It is, moreover, an invitation to make an offer or negotiate in selling the property. In the Leonard v. Pepsico, Inc. case, the objective theory of contracts applies because of the offer being made. A reasonable person would not have believed that the offer made by the soft-drink company. Therefore, the validity of the contract was put into question. Furthermore, the company’s true intent to increase its sales by making the offer. The company was hoping that the offer would get more and more people to start buying its products or to raise money. Although the ad may have brought in more customers, Leonard concluded that the offer was real. But just because one person believed the offer was real, it does not make the offer valid in nature. I think that the court did not hold that a valid agreement was made for two reasons. The first reason revolves around the fact that neither Pepsico nor Leonard entered into a verbal or written agreement to ensure the legality or validity of the proposed contract or agreement. Nearly all companies promote their products and services by way of advertisements on television, magazines, newspapers, the Internet or radio (Wild, Wild, & Han, 2010). It does not mean that they are virtually making offers to persuade the public to enter into an agreement or contract with them. The first reason I gave revolves around the legal side of the

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