Essay on "Big Time Toymaker and Chou"

Essay 4 pages (1330 words) Sources: 3

[EXCERPT] . . . .

However, in Case 6.3 of the text (Stevens v. Publicis), the court focused on the name at the end of the e-mail messages. The exact words of the court being, "the e-mails constitute 'signed writings' within the meaning of the statute of frauds, since the name at the end of the e-mail signified the intent to authenticate the contents," (Stevens v. Publicis, Melvin, 2011, p. 152). It is uncertain in this scenario if there were any names at the ends of the e-mails because the text doesn't mention anything pertaining to this.

Doctrine of Mistake and other Defenses

A mistake according to Melvin (2011) and defined in contract law is "a belief that is not in accord with the facts," (Melvin, 2011, p. 140). That being stated, BTT would not be able to avoid the contract under the doctrine of mistake. The e-mail that was sent by BTT stated the terms of the "Strat deal" and was agreed by both parties with no mention of a mistake anywhere. If any mistake, it would be considered a mutual mistake, with both parties having an erroneous belief, (Melvin, 2011). The only defense that BTT would have is that there was no "written" contract. It would be up to the courts to determine if the e-mail would be considered written and if there was a signature at the end of the e-mail. Another defense could be that the 90-day period had expired and there was no draft sent by Chou until after that period.

Considerations Supporting the Agreement

For arguments sake, if the e-mail did constitute an agreement, there are a couple considerations that support the agreement. One of the considerations would be mutual assent. More specifically, the $25,000 that BTT paid C

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hou for the exclusive negotiation rights for the 90-day period. Another consideration was the email that BTT sent to Chou which stated the terms and conditions. The email repeated the key terms of the distribution agreement that was discussed and agreed upon from the meeting between the two parties.

Remedies

If there existed an enforceable contract between BTT and Chou there would be a couple different remedies that would apply to the situation. Chou could request compensatory damages for the out-of-pocket costs and also the potential profits that Chou lost because of BTT not acting in good faith (Melvin, 2011). Chou could also seek specific performance which is "a remedy whereby a court orders the breaching party to render the promised performance by ordering the party to take a specific action," (Melvin, 2011, p. 172). Another remedy would be for BTT to delegate the distribution of the game. If a problem was to arise with the third party distributing the game, BTT would still be held liable for the failed action (Melvin, 2011). Another remedy that Chou should seek, if the decision is to not have BTT distribute his game would be injunctive relief. This would mean that BTT cannot create and/or distribute a game that is similar or make money off a game that is similar to Strat (Melvin, 2011).

Conclusion

In reviewing all of the facts, stipulations and information from the text, it is abundant that there are actions that can be taken in this scenario. This is to say that the two parties had a valid contract that was enforceable by law. The court would have to decide if the e-mails were deemed valid under the UCC statute of frauds. If so, Chou has several remedies that could benefit him in this case. Ultimately, in this scenario it is up to the courts to decide if the contract even existed and what defenses each party has against the other.

References

Melvin, S.P. (2011). The legal environment of business: A managerial approach: Theory to… READ MORE

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Quoted Instructions for "Big Time Toymaker and Chou" Assignment:

“

LAW 421 Contemporary Business Law

Case Scenario:

Big Time Toymaker

Answer Questions 1 through 6 based on the scenario in the “Theory to Practice” section, and complete the following in your response:

At the end of the scenario, BTT states that it is not interested in distributing Chou’s new strategy game, Strat. Assuming BTT and Chou have a contract, and BTT has breached the contract by not distributing the game, discuss what remedies might or might not apply.

Big Time Toymaker (BTT) develops, manufactures, and distributes board games and other toys to the United States, Mexico, and Canada. Chou is the inventor of a new strategy game he named Strat. BTT was interested in distributing Strat and entered into an agreement with Chou whereby BTT paid him $25,000 in exchange for exclusive negotiation rights for a 90-day period. The exclusive negotiation agreement stipulated that no distribution contract existed unless it was in writing. Just three days before the expiration of the 90-day period, the parties reached an oral distribution agreement at a meeting. Chou offered to draft the contract that would memorialize their agreement. Before Chou drafted the agreement, a BTT manager sent Chou an e-mail with the subject line “Strat Deal” that repeated the key terms of the distribution agreement including price, time frames, and obligations of both parties. Although the e-mail never used the word contract, it stated that all of the terms had been agreed upon. Chou believed that this e-mail was meant to replace the earlier notion that he should draft a contract, and one month passed. BTT then sent Chou a fax requesting that he send a draft for a distribution agreement contract. Despite the fact that Chou did so immediately after receiving the BTT fax, several more months passed without response from BTT. BTT had a change in management and informed Chou they were not interested in distributing Strat.

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

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

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

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

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?

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

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