Differences between advertisement and unilateral contract

The overall difference between a unilateral contract and an advertisement is the manner in which it is accepted.

Under the law of contracts, the general difference between a unilateral contract and an advertisement is that the manner of accepting a unilateral contract is accomplished by the performance of the terms specified in the offer, while an advertisement is treated as merely an opening to negotiate the terms of an offer to a contract.

Mutual Assent

Formation of a valid contract, which is legally enforceable, requires mutual assent to the same terms by the parties and consideration. (“Consideration” is outside the scope of the present discussion.) Mutual assent is generally accomplished by one party making an offer to another and acceptance of that offer by the other party. An offer is created by the communications—words or expressive conduct—of one party (the “offeror”) that objectively express the reasonable intent to be contractually bound by the acceptance of the other party (the “offeree”).

Power of Acceptance

The offer gives the offeree the power to form a contract by an acceptance in the manner indicated by its terms. Communications that do not express the intent to be contractually bound do not constitute offers. Common examples of such communications without the requisite intent include opinions about future results, statements of present or future intent, price estimates, reserve auctions, catalogs, mass mailings, and advertisements.

Advertisements

With respect to advertisements, courts have held that it is unreasonable to believe that the offeror intends to be contractually bound to all recipients or readers of such advertisement, except where the Power of Acceptance is unequivocally limited to the first number of persons who accept. For example, a publication that reads, “HD televisions 50% off” is an advertisement. Whereas “HD televisions 50% off, limited stock of 20 units,” would be an offer giving the power of acceptance to only the first 20 people who accept.

Manner of Acceptance; Generally

The nature of the offer establishes the manner of acceptance whether by a return promise (“bilateral contract”) or by actual performance of the promised act (“unilateral contract”). To understand the unilateral contract it is best to first discuss the bilateral contract. The most common type of contracts is a bilateral contracts, are generally identified by the fact that the performance of offeree’s contractual obligation requires some future act or series of acts, such examples include mortgages, loans, construction contracts. To form a bilateral contract, the terms of the offer gives the offeree the power of acceptance only in the manner of returning the promise requested in the offer, such as by a promise to perform an obligation in the future, such as a promise to make a future payment or to fulfill a future obligation—paint the offeror’s house. The failure to fulfill such promise results in breach.

Unilateral Contracts

However, in the special circumstances of the unilateral contract the terms of the offer gives the offeree the power to accept the contract only by complete performance of the action described. Thus, no contract is formed until the offeree renders full performance. In addition, the offeree’s failure to perform or complete any such performance that he has commenced do not constitute a breach. Furthermore, the modern treatment of such circumstance is once the offeree begins to perform, the offeror must give the offeree a reasonable amount of time or the time specified in the offer in which to complete such performance. For example, an offer that states, “If you fix the car in my driveway, then you can keep it”, is a unilateral contract, where its acceptance is accomplished by the act of fixing the car.

When news broke that MillerCoors was reviewing its team of advertising agencies, one of the biggest in the business, observers might have envisioned all sorts of wild “Mad Men” and “Trust Me” television scenarios. But according to Chief Marketing Officer Andy England, the decisions came down to company knowledge, beer experience and the company’s desire to give similar products to one agency.

He said in a news release that MillerCoors “placed a high value on agencies that had a deep understanding of MillerCoors beer brands and their unique positioning.” England said he considered only agencies that were already working for MillerCoors. “There was no reason to look beyond that pool of agencies. We recognize there is a benefit in developing long term relationships with agencies that already fully understand our business, he added.”

Diverse Family of Brands

Even when company knowledge and product experience are the major factors in selecting agencies, the process has to be especially challenging when the advertiser is a newly merged company with a diverse family of brands. Multimillion accounts were at stake for most of the agencies.

Molson Coors Brewing and SAB Miller merged their North American companies in mid 2008, about the same time that Anheuser-Busch was merging with InBev of Belgium, setting the stage for a gigantic beer marketing war. The merger also almost guaranteed a shakeup of the agency lineups because Miller and Coors had brought in pairs of similar brands that could now be managed by one agency.

MillerCoors entered the new battle with Anheuser-BuschInBev armed with about 30 brands of light, full calorie, premium, imported, craft and microbrewed beers. They included Miller Lite, Miller Genuine Draft, MGD 64, Miller High Life, Miller Chill, Foster’s, Coors Banquet, Icehouse, Mickey’s, Keystone, Milwaukee’s Best, Peroni, Pilsner Urquell, Grolsch, Sparks, Coors Non-Alcoholic, Molson Canadian and Irish Red, as well as craft or microbrewed beers from the Jacob Leinenkugel, Blue Moon Brewing and Blitz-Weinhard Brewing companies.

Most of the brands offer different characteristics and must be marketed to different audiences, often in different geographic areas.

Bartle Boglie Handled Miller Lite

Those brands were split among nine agencies:

Bartle-Bogle Hegarty (BBH) a New York-based agency, which handled Miller Lite.
Young & Rubican (Y&R) of the WPP Group
DraftFCB of the Interpublic Group
Saatchi & Saatchi of the Publicis Groupe
Upshot of Chicago
The Omnicom’s Group’s Integer of Lakewood, Colorado
Jacobson Rost of Chicago
Digitas of the Publicis Groupe
ARC Publicidad, which serves the Hispanic market

DraftFCB Chicago Gets Miller Lite Account

The big winners in the reshuffling were:

DraftFCB, which won the Miller Lite account and retained Coors Light, giving it both of the MillerCoors premium light brands. It also retained Coors Banquet. It handled a series of successful Coors Light campaigns when England was CMO at Coors
Saatchi & Saatchi, which added the Miller Genuine Draft, MGD 64 and Keystone accounts. It already had the Miller High Life advertising. It now handles two of MillerCoors largest below-premium brands.