88 F. Supp. 2d 116 (1999)
PepsiCo conducted a test of its Pepsi Stuff promotion in the Pacific Northwest from October 1995 to March 1996.1 A Pepsi Stuff catalog was distributed to consumers in the test market, including Washington State.2 Plaintiff John Leonard, a resident of Seattle, Washington, viewed the Pepsi Stuff television commercial while living in Seattle.3
The commercial opened with a suburban morning scene featuring a teenager in Pepsi-branded clothing.4 It displayed subtitles listing point values for items such as a T-shirt for 75 points and a leather jacket for 1,450 points.5 The commercial showed a Harrier Jet landing at a school.6 It concluded with the text “HARRIER FIGHTER 7,000,000 PEPSI POINTS” followed by “Drink Pepsi — Get Stuff.”7
Leonard consulted the Pepsi Stuff Catalog.8 The catalog listed fifty-three items redeemable for points ranging from 15 to 3,300.9 It contained no entry or description of a Harrier Jet on the Order Form.10
Unable to collect 7,000,000 points by consuming Pepsi products, Leonard raised approximately $700,000 through acquaintances.11 On or about March 27, 1996, he submitted an Order Form with “1 Harrier Jet” and “7,000,000” points written in, fifteen original Pepsi Points, and a check for $700,008.50 drawn on his attorneys’ account.
PepsiCo’s fulfillment house rejected the submission on or about May 7, 1996.12 It returned the check and stated that the item was not part of the Pepsi Stuff collection, was not included in the catalog, and that the Harrier Jet in the commercial was fanciful and included only to create a humorous ad.13 Leonard’s counsel responded with a demand letter on or about May 14, 1996.14 BBDO, the advertising agency, replied on May 30, 1996, that no reasonable person would view the commercial as offering a Harrier Jet.15
PepsiCo filed a declaratory judgment action in the Southern District of New York on July 18, 1996.16 Leonard filed suit in Florida state court on August 6, 1996, which was removed to federal court and transferred to New York.17 After transfers, motions to dismiss for lack of personal jurisdiction, voluntary dismissal without prejudice conditioned on payment of $88,162 in attorneys’ fees, and stipulations resolving jurisdiction and fee enforcement, PepsiCo moved for summary judgment on February 22, 1999.18
Whether the Pepsi Stuff television commercial constituted an offer?19
Under contract law principles, an advertisement generally constitutes an invitation to negotiate rather than a definite offer unless it is clear, definite, and explicit and leaves nothing open for further negotiation.20
No. The commercial reserved details of any promotion to the catalog.21 The catalog omitted the jet entirely.22 The presentation was exaggerated and humorous rather than with words of commitment.23 An objective reasonable person would recognize the scenario as zany fantasy rather than a serious proposal to exchange millions of points for military equipment.24
Because the advertisement lacked the definiteness and commitment required to form an offer, Leonard’s order form amounted only to an offer that PepsiCo was free to reject.25
The Pepsi Stuff television commercial did not constitute an offer.26
Whether summary judgment is appropriate in this case?27
Summary judgment is proper when the words and actions that allegedly formed a contract are so clear themselves that reasonable people could not differ over their meaning. The court may decide the issue as a matter of law.28
Yes. The commercial’s content, the catalog’s omission of the jet, and the objective reasonable-person standard present no genuine issue of material fact.29 The parties’ submissions established the precise language of the commercial and catalog without dispute.30 Because reasonable viewers could reach only one conclusion about the commercial’s non-offer character, the court could resolve the contract-formation question without trial.31
Summary judgment is appropriate in this case.32
Whether the alleged contract satisfies the statute of frauds?33
Under the New York Statute of Frauds, a contract for the sale of goods priced at five hundred dollars or more is unenforceable unless a writing signed by the party to be charged evidences the agreement.34
No. No signed writing between Leonard and PepsiCo evidenced any agreement for a Harrier Jet.35 The commercial itself is not a writing.36 Leonard’s order form bore no PepsiCo signature.37 Any contracts between PepsiCo and its advertisers were not made for Leonard’s benefit.38 The absence of a qualifying memorandum therefore bars enforcement of the alleged contract.39
The alleged contract does not satisfy the statute of frauds.40
Whether plaintiff has a viable fraud claim?41
A fraud claim requires a material misrepresentation or omission that is collateral to any contract and that induces separate detrimental action. Allegations that a party merely entered a contract without intent to perform are insufficient.42
No. Leonard alleged only that PepsiCo never intended to honor the supposed offer of a Harrier Jet.43 He identified no collateral misrepresentation that induced him to take action apart from attempting to accept the commercial.44 The claim therefore reduces to an assertion of contractual non-performance and cannot stand as an independent fraud action.45
Plaintiff does not have a viable fraud claim.46