1. Why isn’t the relationship between Leslie and Augstein considered a bilateral contract?
2. What was Leslie’s defense to the allegation that he had made a unilateral contract offer? Why did the court reject it? Do you agree?
3. What could have Leslie done to prevent his YouTube video from forming a unilateral offer? Would some type of disclaimer have worked? If there was evidence that Augstein had stolen the laptop instead of found it, would he still have been able to collect the reward money? Why or why not?
Ryan Leslie (Leslie) is an American recording artist and NextSelection is a company that owns the trademark to Leslie’s name and performances. While on tour in Germany, Leslie’s laptop computer, external hard drive, and certain other belongings were stolen. The laptop contained valuable and confidential intellectual property, including music and videos related to Leslie’s records and performances. In videos, news articles, and online postings, Leslie stated that he would pay a reward to anyone who returned his property. Specifically, Leslie mentioned a $20,000 reward for the return of his property in a YouTube video, saying, “I am offering a reward of $20,000.” On November 6, 2010, a video was posted increasing the reward to $1,000,000. At the end of the video, a message reads:
In the interest of retrieving the invaluable intellectual property contained on his laptop & hard drive, Mr. Leslie has increased the reward offer from $20,000 to $1,000,000 USD.
The increase of the reward was publicized on Leslie’s Facebook and Twitter accounts, including a post on Twitter which read, “I’m absolutely continuing my Euro tour + I raised the reward for my intellectual property to $1mm,” and which included a link to the video on YouTube. News organizations also published reports on Leslie’s reward offer, both in print and online. Finally, Leslie was interviewed on MTV in November 2010, at which time he reiterated the $1,000,000 reward, saying, “I got a mil-lion dollar reward for anybody that can return all my intellectual property to me.”
Approximately one month later, Armin Augstein (Augstein) found the laptop in a plastic garbage bag while walking his dog in a German city. He returned the laptop and hard drive to the local police and eventually the laptop was returned to Leslie in New York. When Augstein contacted Leslie, however, Leslie refused to pay the reward. Leslie alleged that the intellectual property for which he valued the laptop was not present on the hard drive when it was returned. Augstein filed suit and asked the court to grant summary judgment on whether Leslie’s various promises constituted a unilateral offer of a reward for the return of his property—an offer that Augstein accepted and fully performed when he presented the property to the police in Germany. Leslie responded that no offer existed because a reasonable person would not have understood the mention of the reward to be an offer of a unilateral contract, but instead would have under-stood it to be an invitation to negotiate. Moreover, Leslie argued, even assuming that it was an offer, Augstein did not perform because he did not return the intellectual property, only the physical property.
The U.S. District Court for the Southern District of New York ruled in favor of Augstein holding that Leslie’s various reward videos and statements constituted a unilateral offer to contract. The court reasoned that Leslie’s attempts to publicize the reward through social and public media were sufficiently detailed to create an objective belief that anyone who performed by returning the laptop would be paid the promised reward money. The court rejected Leslie’s contention that the videos were merely an advertisement because Leslie was not seeking a promise from an individual who would return his belongings. Rather he was seeking performance—the actual return of his property. In addition, the court pointed out that his videos and other commentary cannot be reasonably understood as an invitation to negotiate because, similarly, Leslie was not soliciting help in finding his property, but the actual return itself.
“Leslie’s videos and other activities together are best characterized as an offer for a reward. Leslie ‘sought to induce performance, unlike an invitation to negotiate [often an advertisement], which seeks a reciprocal promise.’ . . . A reasonable person viewing the video would understand that Les-lie was seeking the return of his property and that by returning it, the bargain would be concluded. The increase of the reward from $20,000 to $1,000,000, the value of the property lost (in particular the unreleased album) and the news reports regarding the reward offer would lead a reasonable person to believe that Leslie was making an offer. As such, the video constitutes a valid offer and summary judgment is granted as to that issue. ‘[I]f a person chooses to make extravagant promises . . . he probably does so because it pays him to make them, and, if he has made them, the extravagance of the promises is no reason in law why he should not be bound by them.’”
