Case Scenario: Big Time Toymaker

Case Scenario: Big Time Toymaker

1. Did the parties have a contract or contracts? At what point?

In this scenario, the parties involved made a verbal agreement which is the same as an oral contract. It happens during a meeting where BTT and Chou agreed verbally on a distribution agreement. According to the UCC, this type of contract can be enforcing before a judge in the court of law. Also, both parties exchanged emails which explained specific details included on the verbal agreement.

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

The fact that may weigh in favor of Chou in terms of the parties objective intent to contract was that both made an oral contract which can be valid. Also he received the amount of $25,000 because of the negotiation, which can mean that the contract is valid. There are some factors that are against Chou. One of the factors is the fact that the negotiation agreement requires the contract to be in writing in order to be valid. Also, he misunderstood the email and sent out the draft a month after the fact.

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

Yes, the communication by e-mail between both parties had an impact on my previous analysis. The email was a reminder of the agreement both parties had, though the word "contract" was never included. In my understanding, it proved that the agreement was real. But also, emails can lead to miscommunication because in this case Chou understood after receiving the emails that BTT were in charge of the draft but it was not like that, leading to the draft to be sent out by Chou later than expected.

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

According to BTT, the agreement between both parties had to be in writing in order to be legal. It did not happen and the emails received did not have the word "contract" on it. At the same time, Chou received a payment of $25,000 for a 90-day period, which under the UCC the statute of frauds will apply because the negotiation was never completed.

5. Could BTT avoid this contract under the doctrine of mistake? Explain. Would either party have any other defenses that would allow the contract to be avoided?

Yes, BTT can avoid this contract under the doctrine of mistake because the contract was not in writing, as it was stipulated. Also, both parties have problems communicating the massage of the email. Chou understood that BTT created a draft, when in fact he was the person to be in charge of doing the draft.

6. Assuming, arguendo, that this e-mail does constitute an agreement, what legal consideration supports this