Abstract
This paper examines the elements of a legal contract and how advertisements are not viewed as legal contracts in most cases. It will review the case of Leonard vs. Pepsico to determine what happens when an advertisement is viewed as a valid offer and responded to with such view. How rewards and auctions are viewed in legal terms. Finally, how this applies to the creative idea to boost tourism by auctioning Bigtown on eBay.
Elements of a Legal Contract
In order to have a contract that is legally binding, it must be valid and involves at least two parties. They are the offeror, the party making the offer, and the offeree, the party accepting the offer. A contract exists only if the offer is made and accepted. It must be clear and specific. They can be unilateral, meaning the offer's offer is accepted only by the performance of a requested act by the offeree, or bilateral where the offeror's offer can be answered either agreeing or rejecting the offer. The bilateral contract is binding as a promise for a promise. Additionally, there are four elements of a valid contract: Agreement, Consideration, Contractual Capacity, and Lawful Object (Cheeseman, 2006).
The first element of a legally binding contract is agreement. Agreement deals with a clear understanding on all parties involved as to what the offer is and the resulting acceptance. This is called mutual assent (Cheeseman, 2006).
The second element covers consideration. Consideration is a benefit or right, something of legal value, bargained for and agreed upon in exchange for another benefit or right. This could be something as simple as mowing the lawn for $10 per week or something as complicated as building a house. The consideration is money in exchange for a service. Both are of value to ...