Big Time Toymaker Scenario

Big Time Toymaker Scenario

By

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LAW/421

Johan Johannes

June 23, 2014.

Big Time Toymaker Scenario

At what point, if ever, did the parties have a contract?

A contract is an agreement that can be enforced by law and it could be made in writing or orally. Considering the case of BTT and Chou, I do not think there was a valid contract between both parties for several reasons. First, the exclusive negotiation agreement both parties had clearly stipulated that no distribution contract existed if it was not put into writing. The oral agreement between both parties is not enforceable as there was no explicit agreement judging from events after; Chou offering to draft the agreement and BTT sending an email showed that the agreement was yet to be finalized. Even the exchange of emails between Chou and BTT cannot amount to an enforceable contract as it lacks the signature of both parties.

What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract?

Facts that may work against Chou include a lack of written agreements being made as agreed in the exclusive negotiation with BTT. Also the emails sent with which Chou may want to argue the existence of a written contract did not contain signatures of both parties and is unenforceable. Another fact that may work against Chou is the failure to send the draft which detailed agreements reached and have this signed by both parties. However, the fact that Chou has in his favor is the intent of the parties to enter into a contract. This is evident in the prompt response communicated to BTT by Chou upon receiving the fax from BTT. Also, the initial payment of $25,000 to Chou by BTT to kick start negotiations can be taken as BTT’s intent to enter into contract by Chou.

Does the fact that the parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)?

The fact that both parties were communicating by email did have an impact in my previous analysis. The email exchange that occurred after BTT requested for a draft of a distribution agreement, may be taken by Chou as the finalization of the contract. However, there was no communication from BTT that showed it has become bound to the sent draft contract through acceptance. Moreover, none of the emails exchanged carried the signature of either party, so a contract could not have been said to be in existence despite the exchange of emails.

What role does the statute of frauds play in this contract?

Statue of fraud is a