Advertisements: when is a public statement an offer?

Minneapolis, April of nineteen fifty six. A store puts an advertisement in the Saturday paper. Nine in the morning, sharp. Three brand new fur coats, worth up to a hundred dollars. First come, first served. One dollar each. A man named Lefkowitz reads it, and on Saturday morning he is the first person at the counter, with his dollar.
The store will not sell to him. A house rule, they say. The offer was meant for women. A week later the store runs another advertisement. Two mink scarfs, and one black lapin stole, beautiful, worth a hundred and thirty nine dollars and fifty cents. One dollar. First come, first served. Lefkowitz is first again. The store refuses him again, and tells him he knows the house rules.
So here is the question. A store puts a price in the newspaper. A customer shows up and says yes. Is there a contract? Think before you answer, because you already know the two rules that collide here, and the whole lecture is about which one wins.
The question I keep asking. What exactly did these people promise each other? The store printed words in a newspaper addressed to everyone in Minneapolis. Did it promise anything to anyone? Or did it invite people to come and make offers, which it could accept or refuse as it liked?
First line for the board. The general rule is that an advertisement is not an offer. It is an invitation to deal. Last time we saw why. An offer hands the recipient the power to close the bargain by saying yes. A newspaper advertisement goes to thousands of people, usually names no quantity, and leaves terms open. A reasonable reader understands it as an invitation to come in and make an offer, which the seller may accept or refuse.
Second line. That is a general rule, not an absolute one. An advertisement becomes an offer when it is clear, definite and explicit, and leaves nothing open for negotiation. Three fur coats. One stole. One dollar. First come, first served. Quantity, price, who may accept, and how. There is nothing left to bargain about. A reasonable reader understands that being first, with a dollar, closes the deal.
Third line, and it is the reason the general rule exists. If every advertisement were an offer, a store with ten items and a thousand readers would be bound to a thousand contracts. The law protects sellers from that by treating public advertisements as invitations, unless the seller has written them so tightly that the risk is contained. First come, first served does exactly that. It limits the promise to one person.
Now the case. Lefkowitz against Great Minneapolis Surplus Store, decided by the Supreme Court of Minnesota in nineteen fifty seven. The trial court had awarded Lefkowitz a hundred and thirty eight dollars and fifty cents, the value of the stole less his dollar. On the coats he got nothing, because worth up to a hundred dollars was too vague a value to measure. The store appealed on the stole.
The store's first argument was the general rule. An advertisement is an invitation, not an offer. The court agreed that this is usually so, and then said this. Where the offer is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract.
And it applied that test.  We are of the view on the facts before us that the offer by the defendant of the sale of the lapin fur was clear, definite, and explicit, and left nothing open for negotiation.  Lefkowitz had accepted by doing what the advertisement asked.  Listen to the court on that.
The plaintiff having successfully managed to be the first one to appear at the seller's place of business to be served, as requested by the advertisement, and having offered the stated purchase price of the article, he was entitled to performance on the part of the defendant.
The store's second argument was the house rule. Women only. The court dealt with it in one sentence, and it is a sentence to keep. While an advertiser has the right at any time before acceptance to modify his offer, he does not have the right, after acceptance, to impose new or arbitrary conditions not contained in the published offer. The rule was not in the advertisement. Lefkowitz had already accepted. Too late.
Now the other side of the line, forty years later, with a much bigger prize.  Pepsi ran a promotion in which you collected points from its products and traded them for merchandise from a catalog.  The television commercial ended with a teenager landing a military jet at his school, and the words, Harrier fighter, seven million Pepsi points.  A young man named Leonard read that as an offer.
He raised the money, sent Pepsi a check for seven hundred thousand and eight dollars and fifty cents, and asked for his jet.
The federal court in New York gave Pepsi judgment.  The advertisement was not an offer, and the catalog with its order form was where the real offers lived.  But the court went further, because Leonard insisted the commercial looked serious.  Here is the court.  No objective person could reasonably have concluded that the commercial actually offered consumers a Harrier jet.  And the court quoted the old rule that excludes acts evidently done in jest or without intent to create legal relations.
A joke, however expensive, is not an offer.
Put the two cases side by side. Lefkowitz. One stole, one dollar, first come first served, and a man at the counter at nine sharp. Offer. Leonard. A jet in a television commercial, no quantity, no mechanism except a catalog that did not list it, and a price that no reasonable viewer would take seriously. Invitation, and a joke. Same rule. The words and the circumstances decide which side of the line you are on.
Now let's change one fact. The advertisement says, men's suits, two hundred dollars, while they last. You are first in the store on Saturday. Is there an offer? Choose an answer before I go on.
Most people say yes, and the reason is a good one. The store put a price in the newspaper. But look at what is missing. Which suits? How many? Who may accept, and how? While they last is not first come, first served. It tells you the stock is limited. It does not hand you the power to close a deal by walking in. This is an invitation. You make the offer at the counter, and the store may say no.
Change one fact again. One used sedan, twenty thousand miles, twelve thousand dollars, call between nine and five. Is there an offer? Choose.
Most people say yes, because there is one car and one price. But read the last words. Call between nine and five. The advertisement tells you how to start a conversation, not how to close a deal. Calling is not accepting. Now change it to, first caller takes it, and the answer flips. Quantity, price, and a mechanism that makes one person's act the end of the bargain. That is Lefkowitz.
Change one fact a third time. The store advertises ten tablets at three hundred dollars each to the first ten customers on Saturday. The seventh customer is a reseller, and the store refuses him because the sale was meant for individuals. Is there a contract with the seventh customer? Choose.
Most people say no, because the store clearly did not want resellers. But that is the house rule again. The advertisement was clear, definite and explicit, and it said the first ten customers, not the first ten individuals. The reseller was one of the first ten and offered the price. The store could have written its condition into the advertisement. Having left it out, it cannot impose it after acceptance. That is the sentence from Lefkowitz, applied.
Here is what people get wrong here, and why it is tempting.  The first mistake is treating every sale advertisement as an offer, because it names a price.  Most name a price and are still invitations.  The second mistake is the opposite, stretching Lefkowitz to any advertisement with a low price, forgetting that what made it an offer was the limit and the mechanism.  First come, first served.  The third mistake is forgetting the house rule sentence.  A seller can change an offer before acceptance.
Afterward, it is bound by what it published.
Here is the rule, in one breath. An advertisement is an invitation to deal unless it is clear, definite and explicit and leaves nothing open to negotiate, in which case the person who does what it asks has accepted, and the seller may not add conditions afterward. Now, five questions.