{"id":2906,"date":"2023-02-19T16:11:06","date_gmt":"2023-02-19T16:11:06","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/apply-it-5-4-what-is-a-contract\/"},"modified":"2025-05-12T18:13:36","modified_gmt":"2025-05-12T18:13:36","slug":"apply-it-5-4-what-is-a-contract","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/apply-it-5-4-what-is-a-contract\/","title":{"raw":"Apply It 5.4: What Is a Contract?","rendered":"Apply It 5.4: What Is a Contract?"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand what a contract is&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand what a contract is<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the four parts of a contract&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the four parts of a contract<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand when a contract is breached and what you can do about it&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand when a contract is breached and what you can do about it<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand warranties&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand warranties<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<h2>Contracts<\/h2>\r\n<section class=\"textbox connectIt\">\r\n<h2>Pepsi Points<\/h2>\r\n<p><iframe src=\"\/\/plugin.3playmedia.com\/show?mf=9475152&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=ZdackF2H7Qc&amp;video_target=tpm-plugin-rfwblx63-ZdackF2H7Qc\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><\/p>\r\n<p class=\"p1\">You can view the <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/Pepsi+Harrier+Jet+Commercial+1.txt\" target=\"_blank\" rel=\"noopener\"><span class=\"s1\">transcript for \u201cPepsi Harrier Jet Commercial 1\u201d here (opens in new window).<\/span><\/a><\/p>\r\n<p class=\"p1\">Suppose you are a Pepsi drinker. After seeing the commercial, you start collecting Pepsi Points. You also get a copy of the catalog that is briefly shown in the ad. In the catalog, it says that the cash value of each point is 10 cents. You do the math and figure out that the cash value of the 7,000,000 points for the jet is $700,000. You already collected 15 points from drinking Pepsi. The catalog said that you can buy additional Pepsi Points to claim a prize with a $10 shipping and handling fee. You send Pepsi your 15 points plus a check for $700,008.50 to claim the jet.<\/p>\r\n<p class=\"p1\">Explain whether Pepsi is obligated to give you the jet.<\/p>\r\n<p>[reveal-answer q=\"516236\"]Click to Show Sample Answer[\/reveal-answer]<br \/>\r\n[hidden-answer a=\"516236\"]Very often commercials use exaggeration to draw consumers' attention. The exaggeration is not meant to be taken seriously. In the commercial, it's very unlikely that a high school student would be able to fly a jet and park it in front of his school. Pepsi isn't seriously offering the jet as a prize. They are just making the commercial entertaining.<\/p>\r\n<p>This example is based on a real lawsuit that Netflix turned into a documentary. See the <a href=\"https:\/\/youtu.be\/lzS8BQBcAu4\">trailer for \"Pepsi, Where's My Jet?\"<\/a>[\/hidden-answer]<\/p>\r\n<\/section>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand what a contract is&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand what a contract is<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the four parts of a contract&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the four parts of a contract<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand when a contract is breached and what you can do about it&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand when a contract is breached and what you can do about it<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand warranties&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand warranties<\/span><\/li>\n<\/ul>\n<\/section>\n<h2>Contracts<\/h2>\n<section class=\"textbox connectIt\">\n<h2>Pepsi Points<\/h2>\n<p><iframe loading=\"lazy\" src=\"\/\/plugin.3playmedia.com\/show?mf=9475152&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=ZdackF2H7Qc&amp;video_target=tpm-plugin-rfwblx63-ZdackF2H7Qc\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><\/p>\n<p class=\"p1\">You can view the <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/Pepsi+Harrier+Jet+Commercial+1.txt\" target=\"_blank\" rel=\"noopener\"><span class=\"s1\">transcript for \u201cPepsi Harrier Jet Commercial 1\u201d here (opens in new window).<\/span><\/a><\/p>\n<p class=\"p1\">Suppose you are a Pepsi drinker. After seeing the commercial, you start collecting Pepsi Points. You also get a copy of the catalog that is briefly shown in the ad. In the catalog, it says that the cash value of each point is 10 cents. You do the math and figure out that the cash value of the 7,000,000 points for the jet is $700,000. You already collected 15 points from drinking Pepsi. The catalog said that you can buy additional Pepsi Points to claim a prize with a $10 shipping and handling fee. You send Pepsi your 15 points plus a check for $700,008.50 to claim the jet.<\/p>\n<p class=\"p1\">Explain whether Pepsi is obligated to give you the jet.<\/p>\n<p><div class=\"qa-wrapper\" style=\"display: block\"><button class=\"show-answer show-answer-button collapsed\" data-target=\"q516236\">Click to Show Sample Answer<\/button><\/p>\n<div id=\"q516236\" class=\"hidden-answer\" style=\"display: none\">Very often commercials use exaggeration to draw consumers&#8217; attention. The exaggeration is not meant to be taken seriously. In the commercial, it&#8217;s very unlikely that a high school student would be able to fly a jet and park it in front of his school. Pepsi isn&#8217;t seriously offering the jet as a prize. They are just making the commercial entertaining.<\/p>\n<p>This example is based on a real lawsuit that Netflix turned into a documentary. See the <a href=\"https:\/\/youtu.be\/lzS8BQBcAu4\">trailer for &#8220;Pepsi, Where&#8217;s My Jet?&#8221;<\/a><\/div>\n<\/div>\n<\/section>\n","protected":false},"author":21,"menu_order":25,"template":"","meta":{"_candela_citation":"[{\"type\":\"copyrighted_video\",\"description\":\"Pepsi Harrier Jet Commercial 1\",\"author\":\"\",\"organization\":\" nonfps\",\"url\":\"https:\/\/www.youtube.com\/watch?v=ZdackF2H7Qc\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":2878,"module-header":"apply_it","content_attributions":[{"type":"copyrighted_video","description":"Pepsi Harrier Jet Commercial 1","author":"","organization":" nonfps","url":"https:\/\/www.youtube.com\/watch?v=ZdackF2H7Qc","project":"","license":"arr","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2906"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":9,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2906\/revisions"}],"predecessor-version":[{"id":9184,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2906\/revisions\/9184"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/2878"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2906\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=2906"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=2906"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=2906"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=2906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}