Big Time Toymaker Scenario

Topics: Contract, Contract law, Damages Pages: 3 (937 words) Published: November 2, 2013


Big Time Toymaker Scenario
LAW/421

Big Time Toymaker Scenario
In chapter six of The Legal Environment of Business: A Managerial Approach: Theory to Practice, Melvin presents the case scenario of Big Time Toymaker (BTT) and Chou the game inventor. In the scenario, Chou invents a strategy game titled Strat. The scenario follows the events as BTT and Chou negotiate the potential distribution of Strat, ending with BTT declining to distribute the game. The legal issues presented are as follows: At what point, if ever, did the parties have a contract?

BTT and Chou must exhibit mutual assent to determine when a contract was reached. The contract is determined to be valid if shown that an offer was made (by BTT), and there was acceptance by Chou. Initially, BTT and Chou entered a 90-day agreement for exclusive negotiation rights to Strat in exchange for $25,000. Once payment is accepted, Chou’s right to solicit distribution from an outside party is restricted. This shows mutual assent as the promisee, Chou, gave up a legal right and the promisor, BTT, made its promised based on a mutual exchange. Additionally, Chou and BTT reached an oral agreement for distribution on day 87 of the 90-day exclusive negotiation agreement with an understanding that Chou would generate a written contract to memorialize the agreement. Prior to generating the contract, Chou received an email from a BTT manager titled “Strat Deal.” This email served the purpose of memorializing the agreement because it detailed the terms that Chou and BTT reached. This caused Chou to reasonably believe that the email constituted the agreement in writing, regardless of the use of the word “contract” in the communication. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? Several actions on the part of BTT weigh in favour of Chou in terms of the parties’ objective to contract. The exclusive negotiation agreement shows the...


References: Melvin, S. P. (2011). The Legal Environment of Business: A Managerial Approach: Theory to
Practice. . New York, NY: McGraw-Hill/Irwin.
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