Legal factors are the external issues and laws that are passed by various administrations or authorities that would determine how businesses would be run and the way customers will behave. The critical legal factors that are present in the scenario include the consumer law which is also known as the consumer protection law. Notably, this legitimate factor is aimed at protecting the customers from deceitful companies and also plays a role in maintaining the buyer’s rights in the market. Consumer law ensures that the companies commit adequate quantities of their resources to make sure that it provides its customers with comprehensive information about its products and policies. Therefore, the soft-drink company in the scenario abused customer law by giving false information to the buyer about its products and the commercial.
Fraud law is among the vital legal factors that are present in the scenario. Fraud law is designed to protect consumers from a deceptive illustration of specific products through misleading statements to promote the business. In the scenario, the soft-drink company failed to obey this law because it made a false advertisement with the aim of attracting more customers. A valid contract is a legal agreement between two or more individuals. The elements of a valid contract include an offer which the main reason why a person or an entity agrees. Offer is the most significant element that ensures that a contract is considered legally valid. When making an offer two or more parties should be involved to make it possible to enter into a contract legally. When an offer is being made, the other party needs to know what is being offered and what the person making a bid is expecting in return. Proposals can be made between advertisements. For instance, in the scenario, the soft-drink company in its commercial made an offer of a Harrier jet, which is used by the U.S Marines for anyone who would attain the seven million company’s points.
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The elements of a valid contract involves acceptance, which shows an evident approval of the terms and conditions of the deal. After the offer is made and the other party is clear with it and agrees with the rules and regulations, there would be acceptable. When the parties involved have not accepted the offer and negotiations are still being made then there is no contract because it only becomes a deal when all the participants agree. This element of acceptance relates to the scenario because when the soft-drink company made an offer, the Seattle man accepted the offer by agreeing to the terms and conditions thus raising the $ 700,000 which was the cost of 7 million company’s points that the company expected in return when it made the offer.
Also, consideration is an element of a valid contract. Consideration is vital because it means that an individual will be offering something in return. It is considered as an exchange that is made between both the person making the offer and other individual taking it. Without consideration, then the contract will not be considered legally valid. For instance, in the scenario when the Seattle man accepted the offer of the Harrier jet, he was ready to raise the 7 million points as consideration.
Lastly, an intention to create a legal relationship is an element of a valid contract. This type of element plays a critical role in a deal when an agreement is not made in a strict sense. The Contracts Act 1950 does not have a say with having an intention to create a legal relationship as an element of a valid contract. A contract can be a matter to the court case when there is no intent to create a legal relation. For instance, in the scenario, the contract that the soft-drink company had with the consumers of the drink such as the Seattle man was subject to a lawsuit because it had no intention of creating a legal relationship.
The objective theory of contracts is the legal concept that argues that an agreement between two or more parties occurs if a sensible individual would judge that a bargain has been made and agreed on. The objective theory plays a vital role in stopping the interpretations of any law of contract from imposing unreasonably huge claims in commercials as a contract offer. The objective theory of contracts applies to this case, especially in the scenario when the judge overruled the Seattle man’s claim by laying out the objective theory of contracts in a few words. The judge argued that the law of business contract had not been abused because according to him no objective person could have believed that the commercial is giving out the Harrier jet as an offer was true as this was a deal that was too sweet to be real. The judge gave this verdict when the Seattle man went to the court to report the soft-drink company claiming that it had violated business contract law. He argued that by being able to raise the 7 million points the soft-drink company needed, he had accepted the offer they had given. According to him, the 7 million points he had raised were his consideration while the Harrier jet was the company’s consideration.
The court held that there was not a valid agreement in the scenario’s case because according to the judge the law of contract was not violated. According to him, the business contract law was not abused because of the shocking nature of the commercial. He argued that an objective individual would have noticed that the deal was too good to be true, as the company was offering a Harrier jet which is used by U.S Marines for any consumer who could raise 7 million company points. The company further claimed that it only included the offer in the commercial to create humor and entertainment in the advertisement. Hence, making the federal judge; of the Southern District of the New York to lay out the objective theory of contracts holding that the company was only joking when it implied that it was giving away the Harrier jet worth approximately $ 23 million.
Advertisements are not generally considered offers but instead are seen as requests to begin a negation and make the deal. The reason behind this is that if a deal was made, then no one would do a commercial without fearing that he or she is being used. Even though an advertisement is not considered as an offer, it must be true or should at least have a realistic foundation on facts. Most courts argue that ads are not considered offers because they lack the legal factors binding them such as the absence of another component. An advertisement can only be regarded as a valid offer if it embraces certain elements such as being able to provide adequately fixed terms which include quality, quantity, price, and enough description. Moreover, an advertisement can be considered an offer if it is only communicated to a small group of individuals. Also, if the conditions surrounding the commercial indicate that the advertiser had the intentions of arriving at a contract, then it can be considered as an offer and not an advertisement.
A unilateral contract is a legal term where the compensation situation is made when the other party fulfilled the wished act. The case in the scenario differ from the reward situation in which a unilateral contract is based upon completion of the requested action because even though, it was essential to take the offer of the reward and complete the bargain with the soft-drink company, which was supposed to make the 7 million company points in exchange for the Harrier jet. Nevertheless, in the case in the scenario, the soft-drink company did not keep its promise upon the completion of the requested action because it denied the Seattle man his right to own the Harrier jet which used by the company as a consideration in the deal. The company instead offered the Seattle man three coupons which did not satisfy him hence forcing him to take the company to a court of law. The judge in the court supported the company claiming that no reasonable individual would have thought that for 7 million company points he could acquire a Harrier jet as part of the soft drink promotion.
A recommendation that would be made to a company considering an aggressive marketing campaign with giveaways of high-value items include encouraging them to pay for the prize indemnity insurance. This cover is guaranteed protection for a business promotion in which the partakers are offered the chance to win prizes. This insurance is vital because it helps the company to pay for the awards won by the participants. The company only needs to pay a premium to the cover company instead of keeping cash reserves to cover for the large prizes they promise their consumers.
One of the recommendations that should be made to a company considering an aggressive marketing campaign with giveaways of high-value items is picking a prize that is relevant to the brand being promoted. The company should be able to prioritize the quality of the offer instead of the quantity when it comes to items. Selecting a prize that is related to the items being promoted will help to attract more people to purchase the product with the aim of winning the reward that is given; hence the company should contemplate on making its service the award. Also, a company considering an aggressive marketing campaign with giveaways of high-value items should contemplate on diversifying its prizes. Providing a large variety of rewards is important because it helps to attract more people to the contest. The company should offer more than one award in the promotion for only the prizes that are different. Besides, it is recommended that a company considering an aggressive marketing campaign should embrace the reward user-generated content. The company should use the products that need great participation of persons so that the company may be able to find something in return. The company should ensure that it makes a campaign that utilizes the user-generated content and only gives rewards to individuals who win by making maximum engagements. This type of campaign is important because it changes those partakers who are inactive into active ones, thus making individuals work for the prizes that will be given to them if they qualify to be winners.
Additionally, a recommendation that can be made to a company considering an aggressive marketing campaign with giveaways of high–value items should consider using seasonally timed prizes because they are an excellent way to link in an advertising theme as well as be able to attract more customers. For instance, a company may consider giving out promotional prizes during holidays and known festive occasions which occur during certain periods of the year. For example, a company may consider giving away a piece of jewelry or gift card for dinner for two people in the first two weeks of February as this will attract more people because of the seasonal significance.
A company considering an aggressive marketing campaign should contemplate on creating an impressive user experience. For instance, an organization should consider concentrating more on making the giveaway prize as attractive and pleasant to the user as possible. The company should make sure that it assesses the campaign thoroughly before launching it to ensure that most people will get to know about it. It should also ensure that the promotion is not difficult to take part in it because no matter how good the prize is, users won’t want to participate if it is tough. Also, it is vital for the company to do an investigation on whether the award is legal or not and what the company will benefit from the winning brand and what being the best means for the winner.
