Model Lesson Plan
Lesson: Contracts – Promissory Estoppel
Source(s): Leonard v. Pepsico, 88 F.Supp.2d 116 (1999);
http://www.youtube.com/watch?v=ZdackF2H7Qc; Robert E. Scott and Jody S. Kraus,
Contract Law and Theory, 4th Ed. (2007);
Date: May 16, 2012
Length: ~50 minutes
Number of Students: designed for ~30
Materials Required: Leonard v. Pepsico handout and worksheet (included below), access to
1. Provide students with a very basic introduction to contract law.
2. Have students look at arguments on both sides of a case.
1. Knowledge: students will have a better understanding about:
a. How a contract is formed;
b. What defenses may be raised in a contract case;
c. How a lawyer analyzes problems.
2. Skill/Application: Students will better know how to:
a. Analyze a legal problem;
b. Think objectively about a problem.
3. Attitude: Students will better be able to feel:
a. like they can discuss things with each other;
b. like they can think like an attorney when they analyze a problem.
III. Classroom Methods.
1. Hook: Show the students this video: http://www.youtube.com/watch?v=ZdackF2H7Qc
a. The video is a Pepsi commercial from the mid-90s. The commercial shows a
variety of products that can be purchased with “Pepsi Points”. The Pepsi
points are acquired after purchasing Pepsi products. The commercial shows
that you can purchase a Harrier Jet for 7,000,000 Pepsi Points.
i. This relates to the activity later on in the class period.
2. Overview of Contract Law: Give the students information about basic contract
terms and law:
a. Formation: A contract is not formed unless the following elements are in
place between the parties to the contract.
i. Offer: a proposal to another person to enter into an agreement to
perform some action. Must be pretty specific. Person making offer is
1. Example: I’ll sell you my laptop for 500 dollars.
2. NOTE: generally advertisements don’t constitute offers.
Exceptions if specifically targeted at an audience perhaps.
ii. Acceptance: The person to whom the offer is made must assent to
enter into the terms of the offer in order create a contract.
1. Example: Sure, I’ll buy your laptop for 500 dollars OR in the
alternative, the offeree (person to whom an offer is made) could
just give the person 500 dollars and by performing, accepts the
iii. Consideration: a fancy term for what the parties (offeror and offeree)
are exchanging between each other.
1. Ask: What would be the consideration in the above example? in
the example above, 500 dollars and the laptop.
b. Defenses: if you have elements above, consider whether you have a defense
to the formation of the contract. I.e., something that voids the existence of the
i. Statute of Frauds: Generally, contracts over 500 dollars must be in
ii. Minor: Children (kids under the age of 18) cannot enter into binding
iii. Duress: You can’t be forced into entering a contract. Entering into a
contract must be voluntary. No one can put a gun to your head and tell
you to do something.
iv. Fraud: You can’t be deceived into entering a contract.
v. Unconscionability: If the terms are super unfair, then the contract may
be voidable. Example: promise to pay 5 million dollars in exchange for
a laptop computer.
vi. Public Policy????: sometimes courts may void a contract if it is against
public policy. Example: contract to kill someone.
c. Breach: if one of the parties doesn’t perform, then they have breached the
contract and may be able to seek “damages.”
3. Distribute: Handout and worksheets (included below)
a. Tell the students the handout contains a version of the facts from Leonard v.
Pepsico. The case involves Leonard suing Pepsi because of an alleged
contract that was formed after Leonard saw the commercial viewed at the
beginning of class.
b. Students also receive a second handout. On this handout, they will have to
answer some questions and provide some arguments about who should win
i. There are handouts for people who will represent the plaintiff and
people who will represent the defendant.
ii. Distribute an equal amount of handouts for both plaintiffs and
defendants to the class because they will have to pair up later with
someone from the other side.
c. Tell students they will be graded on their answers to the questions in the
handout. Especially on how thoughtful and creative they are and whether they
used the information that we provided earlier in class about contracts.
d. Give the students about 15 minutes to read the facts and answer the
a. Have the students divide up into groups of two.
i. Each group should have a person with a plaintiff handout and a person
with a defendant handout.
ii. Have them discuss with each other the arguments that they came up
for their side.
iii. Also have them discuss which side they think should win. Tell them to
try to come to an agreement.
iv. Monitor the students discussion to make sure that they are on topic.
v. Give the students about 10-15 minutes on this portion.
b. Pick 4 plaintiffs and 4 defendants (one for each question) who will provide an
answer to one of the questions on the handout excluding the last question
about which side should win.
i. One person per question.
ii. Ask the class if any plaintiffs came up with other reasons for the
iii. Ask the class if any defendants came up with other reasons for the
c. Go around the room and have each pair of plaintiffs and defendants report
which side they thought should win and why. If they couldn’t come to an
agreement, have them explain why.
i. Have the students stand up when they present to the class.
a. Provide students with the actual information concerning the case.
b. The facts are taken from an actual case called “Leonard v. Pepsi” (decided in
c. The court ultimately decided in favor of Pepsi. The court gave several
reasons for its decision:
i. A reasonable person would not consider the commercial as an offer
for the sale of a jet.
1. “An obvious joke would not give rise to a contract.”
ii. The contract was not in writing, so it didn’t satisfy the statute of frauds.
1. “A contract for the sale of goods for the price of $500 or more is
not enforceable by way of action or defense unless there is some
writing sufficient to indicate that a contract for sale has been made
between the parties and signed by the party against whom
iii. Perhaps an underlying public policy reason?
1. Selling a Harrier Jet to a member of the public seems crazy.
d. Leonard appealed to the circuit court.
i. The third circuit simply agreed with the District Court’s opinion.
1. Filling out the worksheet.
2. Participation in the activity with other students.
Leonard v. Pepsico: Cold Hard Facts
Inspired by th[e commercial shown at the beginning of class], Leonard set out to obtain a
Harrier Jet. Leonard explains that he is "typical of the `Pepsi Generation' ... he is young, has an
adventurous spirit, and the notion of obtaining a Harrier Jet appealed to him enormously"….
Although Leonard initially set out to collect 7,000,000 Pepsi Points by consuming Pepsi
products, it soon became clear to him that he "would not be able to buy (let alone drink) enough
Pepsi to collect the necessary Pepsi Points fast enough." Reevaluating his strategy, Leonard
"focused for the first time on the packaging materials in the Pepsi Stuff promotion," and realized
that buying Pepsi Points would be a more promising option. Through acquaintances, Leonard
ultimately raised about $700,000.
On or about March 27, 1996, Leonard submitted a Pepsi Points Order Form, fifteen
original Pepsi Points, and a check for $700,008.50. At the bottom of the Order Form, Leonard
wrote in "1 Harrier Jet" in the "Item" column and "7,000,000" in the "Total Points" column. In a
letter accompanying his submission, Leonard stated that the check was to purchase additional
Pepsi Points "expressly for obtaining a new Harrier jet as advertised in your Pepsi Stuff
Pepsi rejected Leonard's submission and returned the check. Pepsi explained that: “The
item that you have requested is not part of the Pepsi Stuff collection. It is not included in the
catalogue or on the order form, and only catalogue merchandise can be redeemed under this
program. The Harrier jet in the Pepsi commercial is fanciful and is simply included to create a
humorous and entertaining ad. We apologize for any misunderstanding or confusion that you
may have experienced and are enclosing some free product coupons for your use.”
Leonard’s lawyer responded to Pepsi by writing: “Your letter is totally unacceptable. We
have reviewed the video tape of the Pepsi Stuff commercial ... and it clearly offers the new
Harrier jet for 7,000,000 Pepsi Points. Our client followed your rules explicitly....This is a formal
demand that you honor your commitment and make immediate arrangements to transfer the new
Harrier jet to our client. If we do not receive transfer instructions within ten (10) business days of
the date of this letter you will leave us no choice but to file an appropriate action against
Pepsi refused to honor the letter and Leonard filed suit against them to force them to give
him a Harrier jet.
Instructions: Pretend that you are an attorney representing Leonard in the case. Answer the
following questions and present arguments for why Leonard should win. Remember: if there
is an offer, acceptance, and consideration, then a legally enforceable contract was formed.
As a representative of Leonard, you will want to argue that all these things were present.
1. Why should the commercial constitute an offer? Argue that it did.
2. Did Leonard accept the offer? Explain how he accepted the offer.
3. Did both Leonard and Pepsi give consideration? If yes, what consideration did
Leonard give? What consideration did Pepsi give?
4. Does Pepsi have any viable defenses (e.g., fraud, duress, violation of public
policy) against the creation of a contract? What are arguments against these
defenses? Remember, as Leonard’s representative you don’t want Pepsi to
present any viable defenses.
5. After consulting with a person from the Defendant’s side, who do you think
should win the case?
Instructions: Pretend that you are an attorney representing Pepsi in the case. Answer the
following questions and present arguments for why Pepsi should win. Remember: if there is
an offer, acceptance, and consideration, then a legally enforceable contract was formed. As
a representative of Pepsi, you will want to argue that all these things were present.
Furthermore, you will want to present affirmative defenses.
1. Why did the commercial not constitute an offer? Argue that it wasn’t an offer.
2. Why did Leonard’s submission of the check, 15 Pepsi points, and the Order
Form not constitute an acceptance? Argue that it wasn’t an acceptance.
3. Was there consideration given by Pepsi and Leonard? If yes, what was it? Why
shouldn’t it be consideration?
4. What affirmative defenses (e.g., duress, fraud, public policy) will you present?
5. After consulting with someone from the plaintiff’s side, which side do you
think should win the case?