In 1995 the Republican National Committee (RNC) ran a newspaper ad featur- ing a

Question

In 1995 the Republican National Committee (RNC) ran a newspaper ad featur- ing a photo of Haley Barbour, the chair of the RNC, holding an oversized check for $1 million, payable to “your name here.” Below the picture was this message: “Heard the one about Republicans ‘cutting’ Medicare? The fact is Republicans are increasing Medicare spending by more than half. I’m Haley Barbour, and I’m so sure of that fact I’m willing to give you this check for a million dollars if you can prove me wrong.” The ad also stated that under the Republican plan, the government would increase Medicare spending over the next seven fiscal years, culminating in a 2002 expenditure 62 percent higher than that in 1995. At the bottom of the ad was a clip-out coupon inviting readers who disagreed to check a box labeled, “I don’t believe you, Haley” and return it with their analysis of “why you are wrong” to the RNC. Approximately 80 people mailed in claims for the prize. The RNC sent a form letter to them rejecting the claim. When sued, the RNC said the ad was a parody and not a legitimate offer. Is it correct? Why?

Explanation / Answer

In general, advertisements/marketing collaterals shared with the public are not considered specific offers to form a valid binding contract. Advertisements are usually considered an invitation to negotiate. Further, the advertisement cannot be considered a valid offer because:

1. Terms of the offer made in the advertisement are vague.

2. An offer is in general limited to people or a group of people

3. RNC has no intent to enter into a contract, not mentioned in advertisment

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