The crux was that it was clearly ridiculous for the company to offer an award for $700k when the value was in excess of $23 million.
Yes, that's the essence of reasonable reliance as typically constructed. But it's a many splendored thing, especially from state to state. Without a detailed discussion with your lawyer friend I would have a hard time disputing him. I can only speak with some understanding of Utah law, which construes fraud according to nine elements, of which elements 6 through 8 describe our doctrine of reasonable reliance. An abbreviated construction of it resides in all our jury instructions that pertain to misrepresentation.
Element 6 requires the plaintiff to act reasonably and in ignorance of the falsity of the claim. The half-dozen or so cases that shape our doctrine, as well as our federal circuit, require due diligence from the plaintiff if a reasonable person would find the offer suspicious on its face; the ignorance in that case can't be reckless or willful. But our founding ruling is
Jardine v. Brunswick (yes, the bowling people):
The one who complains of being injured by such a false representation cannot heedlessly accept as true whatever is told him, but has the duty of exercising such degree of care to protect his own interests as would be exercised by an ordinary, reasonable and prudent person under the circumstances; and if he fails to do so, is precluded from holding someone else to account for the consequences of his own neglect.
In the Pepsico case, in addition to the disparity of buy-in cost and the value of the prize, a reasonable person would also have questioned giving a military jet to a civilian. This should have led the plaintiff to research the purported contract further before committing a substantial sum of money. He had the duty to do so, at least in Utah.
In Heiwa's case, the amount of money offered and the relative obscurity of the claimant should have led a reasonable person to inquire further about the legitimacy of the offer. And the record shows that his critics did indeed undertake such an inquiry, and that the results would be objectively unsatisfactory: Heiwa offered no evidence that he was capable of producing such a sum. The enforceability of the contract and other elements of its validity would also be subject.
So, now I'm a bit conflicted - is Heiwa's offer frivolous, as PepsiCo 's was, or would it be considered boa ride?
As my law teachers point out, that would be for a jury to decide. But most of it would be moot for other reasons, since the award becomes payable only if the terms of the contract are met. The terms (amended) say Heiwa is the sole judge of whether he has been proven wrong. That precludes any sort of "natural meaning" argument. His actions becomes fraud only if Heiwa agrees he has been proven wrong and then subsequently fails to pay. If the terms are not accepted, or he doesn't agree he has been proven wrong, then no award is payable.
I can go into Utah case law for the other elements of fraud, but -- as I say -- it's probably moot.
...the plaintiff did write a check for $700k to buy the face value of the reward points Pepsi said were needed to get the plane.
That satisfies elements 7 and 8 under our law, which requires the plaintiff actually to have done something to demonstrate reliance upon the promise. That may be what your lawyer friend means when he says belief is irrelevant.
