Videos: Part 2: Keeping Contracts: Video 1: Red Bull gives you wings

Introduction

Virtually everyone will have come across Red Bull’s slogan ‘Red Bull gives you wings’.In 2013, this slogan led to a lawsuit. Benjamin Careathers, a regular consumer of Red Bull, filed a claim in the Federal District Court for the Southern District of New York (the same court in which Leonard v Pepsico Inc (1999) 88 F Supp 2d 116 was filed) arguing that Red Bull’s claim was false.  The dispute never went to trial, and was settled out of court.  Nevertheless, the lawsuit is often cited online as an example of the silliness of class actions in the US.  Surely it is obvious to any reasonable person that Red Bull isn’t actually claiming that people drinking it will magically sprout feathery appendages? 

In fact, the complaint is more nuanced than that, raising issues that go to the heart of the distinction between representations, terms, and puff; as well as the question of when and how a pre-contractual statement can create binding legal obligations.  Careathers argued that Red Bull’s advertisement strongly implied that it was a superior source of energy in comparison with other drinks.  In point of fact, however, it contained far less than half the amount of caffeine that a cup of coffee would.  Red Bull, the argument went, was marketing its products as providing a benefit that it was not.

Watch the ad and analyse whether it could be held to have any legal effect in English contract law.  The points under comment 1 will help you to do this if you find yourself struggling.  

Commentary

1.The key issue here is the distinction between statements that are ‘mere puff’ and those that have legal effect because they are either representations or terms.  To decide into which of these categories a given statement falls, you will need to work through the points that the courts take into account in order to determine whether a statement was puff, or something that had legal effect. 

  1. A statement is mere puff if it is not a literal statement of fact, and is not something that the person making them promises.  Courts have tended to speak in terms of ‘extravagant phrasing which would naturally be discounted by sensible persons’.  Hyperbolic claims in advertisements are usually mere puff.
  2. On the other hand, statements which might seem to be puff can also be held to convey some assurance as to the quality of goods being sold.  An example is Osborn v Hart (1871) 23 LT 851, where the statement ‘superior old port’ was held to contain a term as to drinkability.  

2. The issue, ultimately, is one of balance.  Given the nature of the statement, and the context in which it was made, was it intended to be taken seriously or literally?

  1. In general, English courts are unlikely to hold that an ad of this type contains any concrete representations or terms.  Its contents will almost certainly be held to be mere puff, on the basis that no sensible person body would have taken Red Bull’s advertisements as serious statements of fact or serious promises as to Red Bull’s effects.  The fantastical nature of the advertisement’s storyline is a key factor.
  2. The situation would be different were the ad to be articulated in less fantastical or more concrete terms.  An advertisement which included a line like ‘perkier than espresso’, or included a comparative shot of a person drinking coffee and one of a person drinking Red Bull, may well have been taken to be making representations in relation to the comparative benefits of drinking Red Bull and coffee.

3. A broader point is that modern courts have less reason to try and find concrete representations in advertisements than they did in the days of Osborn v Hart.  Two things have changed. 

  1. Firstly, the outcome that was reached in Osborn v Hart could today be more easily reached through the route of statutory implied terms—in relation to consumers, the terms contained in the Consumer Rights Act 2015 and in relation to businesses the terms contained in the Sale of Goods Act 1979.  There is no need to rely on the ad being a representation rather than puff, because the statutory term provides you with a basis for your action that is easier to establish.
  2. Secondly, there is also less need for the common law to play a role in regulating advertisements.  The industry is now largely self-regulated, through bodies such as the Advertising Standards Authority.  The ASA’s code of conduct, amongst other things, requires advertisers to make sure their ads do not mislead consumers, ‘by inaccuracy, ambiguity, exaggeration, omission or otherwise.’  Whilst the ASA does not have the power to enforce its decisions, it has the power to refer cases to the Competition and Markets Authority, which can take enforcement action against misleading advertisements.