Case Scenario: Big Time Toymaker
December 10, 2012
This intent of this paper is to go over the scenario between Big Time Toymaker and Chou over an agreement to distribute a new strategy game. Some of the areas covered are whether or not a contract existed between the two parties, objective intent, and how e-mail comes in to play with enforceability. Also we see if the statute of frauds applies to this scenario and the defenses that either party has in the case. Lastly, we look at the different remedies that can be sought out to reimburse the party harmed by the breaching of the contract
Case Scenario: Big Time Toymaker
In the Theory to ...view middle of the document...
In terms of the parties’ objective intent, Chou would be in favor with the oral agreement and also the email that he immediately sent to BTT after their request for a distribution agreement contract. BTT had paid Chou $25,000 for exclusive negotiation rights so obviously BTT was serious about making an agreement on a distribution contract. According to Melvin (2011), “the law requires only that the parties’ acts or words lead the other party to reasonable believe (objective standard) that an agreement has been reached (Melvin, 2011. p.130). The fact that would weigh against Chou is that there is no technical written agreement that was signed by either party. There was only an oral agreement but it was not drafted before the 90-day period that was given in the original agreement. For this reason, the new manager of BTT was not obligated to distribute since there was no valid contract.
Communication through Email
The fact that the two parties were communicating by e-mail does have an impact on my analysis. In today’s world communications and business transactions are done in large part with e-mail. According to section 7 of the Uniform Electronic Transaction Act (UETA), "any law that requires a writing will be satisfied by an electronic record. A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation,” ("Uniform law commission:," 2011, para. 6). Both BTT and Chou communicated their intent and also they both agreed through e-mail.
Statute of Frauds
The statute of fraud applies to this scenario because of the agreement that BTT paid Chou $25,000 in exchange for exclusive negotiation rights for a 90-day period. Not only did the agreement between the two parties state that no distribution contracted existed unless it was in writing but also as stated by Melvin (2011) under the Uniform Commercial Code (UCC), “the the statute of frauds applies to any contract for the sale of goods for $500 or more, and any lease transaction for goods amounting to $1,000 or more,” (Melvin, 2011). Even though the e-mail from BTT stating the terms and specifics of the agreement could be considered an enforceable contract under the stipulations in the above paragraphs, it is missing one important element required by the statute of frauds, which is a signature (Melvin, 2011). 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)...