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Kearney v. Equilon Enters., LLC - 65 F. Supp. 3d 1033 (D. Or. 2014)

Rule:

Overall, the general rule is that an advertisement does not constitute an offer. This is because advertisements are understood to be mere requests to consider and examine and negotiate; and no one can reasonably regard them as otherwise unless the circumstances are exceptional and the words used are very plain and clear. Additionally, advertisements do not generally constitute offers due to the incompleteness of terms. However, there are exceptions to this general rule. For instance, if an advertisement is clear, definite, and explicit, and leaves nothing open for negotiation, then the advertisement constitutes an offer, acceptance of which will complete the contract. Additionally, there is another exception to the general rule for an offer of a reward. 

Facts:

A class action was filed for a nationwide breach of contract claim based on state unlawful trade practice statutes. The company made an advertisement allegedly displayed by Defendant at Shell-brand service stations. Under this promotion, after individuals purchased ten gallons of fuel and requested a voucher for a free lift ticket, they received a voucher with their purchase receipt. This voucher could not be exchanged directly for a free lift ticket, but rather was a "two for one" coupon that allowed the individual to obtain a free lift ticket only after purchasing a lift ticket at full price at a participating ski resort. Plaintiffs asserted that Defendant's advertisement created a contract, the terms of which entitled Plaintiffs to a free ski resort lift ticket in exchange for buying ten gallons of gas at a participating Shell station. Plaintiffs argued that Defendant breached the terms of the contract, and also violated state unlawful trade practices, when Defendant failed to provide a voucher that could be directly exchanged for a free lift ticket at a participating resort, but instead provided a "two for one" voucher that required the purchase of a second lift ticket in order to receive a "free" lift ticket. Defendant filed a motion to dismiss.

Issue:

Should the court dismiss the claims?

Answer:

No, as to breach of contract claims

Conclusion:

The court denied the motion to dismiss based on the breach of contract claims but granted the motion for state law claims. The Court held that the clear offer in the advertisement established a unilateral contract, and plaintiffs accepted the offer through performance by purchasing ten gallons of fuel at a gas station participating in the "Ski Free" promotion. The Court further held that Plaintiffs sufficiently alleged consideration when they stated that they purchased ten gallons of fuel at a participating gas station with the intention of participating in the "Ski Free" promotion. The Court, however, noted that Plaintiffs failed to plead with particularity the who, when, and where of their state statutory claims because although plaintiffs alleged that the incidents took place at gas stations within the relevant states, there were hundreds of potential locations. 

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