Case Scenario: Big Time Toymaker
1. At what point, if ever, did the parties have a contract? While both parties did have an oral agreement they did not have a contract in place. In the case scenario they also agreed to have Chou memorialize their agreement. In the original negotiating contract it stated that a distribution agreement or contract must be in writing. Although Chou received an email from a BTT manager he assumed that BTT wanted to draft the agreement. Chou waited too long to follow up with BTT and exceeded the 90 day time frame.
2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? - Even though there were terms and agreements reached and an agreement was drafted there was never anything signed. As stated in the original negotiating terms a distribution agreement must be in writing. If Choa would have replied back to the email and agreed to the terms in writing that could possibly work against him.
3. Does the fact that the parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)? – No because the negotiating agreement precedes the email and Choa never responded to the email agreeing to it.
4. What role does the statute of frauds play in this contract? – The statute of frauds is a legal requirement that certain contracts be in writing. The email sent by BTT would be a common law contract but it was not signed by both parties. If Choa would have signed it then the contract could have possibly been enforced.
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? - No the doctrine of mistake would not help BTT because this was never a contract. If this was a contract there are statutes that impose strict liability.
6. Assuming, arguendo, that this e-mail does constitute an agreement, what consideration...