What does Daniel need to show to prove there is a valid contract between him and Night Owl? This requires a discussion of contract principles.

What does Daniel need to show to prove there is a valid contract between him and Night Owl? This requires a discussion of contract principles.

Question:

Discussion Overview:  Night Owl manufactures high energy drinks. Last year, Night Owl ran a promotional campaign in which consumers acquired “Party Points” by purchasing high energy drinks.  Consumers could exchange the party points for Night Owl merchandise.  Consumers could also purchase party points to meet the requried number of points needed for any specific merchandise.  The merchandise was featured in a merchandise catalog.  Merchandise included clothing, electronics, appliances, and sporting goods.  Night Owl also ran television commercials showing the merchandise available through the promotion.  The television commercial and printed advertisement showed a Learjet in the background.

Daniel is a regular consumer of Night Owl high energy drinks.  He saw the commercials and printed advertisements.  When Daniel saw the Learjet in the background, he determined the Learjet could be purchased with Party Points.  The merchandise catalog did not list a Learjet as among the items that could be purchased with Party Points.  Daniel searched the Internet to locate prices for a new Learjet.  Then, he mailed a completed order form to Night Owl with a check for $500,000 and 500,000 Party Points.  The form noted, “(1) Learjet” at the bottom of the form. Daniel attached a copy of the advertisement featuring the Learjet to his order form.

Night Owl rejected Daniel’s order form and returned the check and Party Points to Daniel.  Night Owl informed Daniel the Learjet was not among the items that could be purchased with Party Points.  Daniel was angry when he received the letter.  He decided to sue Night Owl for breach of contract.

Discussion Question:  Incorporating what you learned about contract law, discuss the following:

  • Was there a valid offer and acceptance?  Support your answer with information from the learning materials.
  • What does Daniel need to show to prove there is a valid contract between him and Night Owl? This requires a discussion of contract principles.
  • Was it reasonable for Daniel to believe the Learjet was among the Party Point prizes? Why or why not?
  • What do you think the likely court outcome will be?  Support your answer.
  • What are the social and ethical issues involved?
  • What is your opinion of Daniel and Night Owl’s responses.