Case Scenario

Topics: Contract, Contract law, Common law Pages: 4 (1227 words) Published: February 11, 2012
Case Scenario: Big Time Toymaker
Jason Andrew Ross
January 16th, 2012
Tiffany Brady

Case Scenario: Big Time Toymaker
1. At what point, if ever, did the parties have a contract?
After reading the case scenario, I do not believe either of the two parties involved ever established a binding distribution contract. It is true an oral distribution agreement was achieved just three days prior to the 90-day deadline, which was a condition established in the original negotiating contract. However, as clearly stated in the original negotiating contract, there is not to be a distribution agreement, or contract, unless it is in writing. After the meeting, Chou volunteered to draft the distribution contract that would formalize their agreement. However, before Chou could finish the draft, he received an e-mail from the BTT manager. The e-mail with the subject line “Strat Deal,” focused on the key points of the distribution agreement between both parties, including the price, time frames, and obligations of both parties. After receiving this e-mail, Chou incorrectly assumed that BTT wanted to draft the contract. Thus Chou stopped working on the draft and a month passed by. This passage of time voided any previous agreement because of the 90-day clause to finalize the contract. What BTT and Chou had was not a binding or enforceable contract. 2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? The facts that prove there was no binding distribution contract are: (1) There was no written distribution agreement as stated as a requirement in the original terms of the negotiating contract, (2) No signatures were used to bind the agreement and the word “contract” was never used in the e-mail sent by the BTT manager to Chou, and (3) The 90-day deadline agreed upon in the original negotiating contract passed without a written agreement. All other contingencies became void once this deadline...

References: Melvin, S. P. (2011). The legal environment of business: A managerial approach: Theory to practice. New York, NY: McGraw-Hill/Irwin. Chapter 6
Melvin, S. P. (2011). The legal environment of business: A managerial approach: Theory to practice. New York, NY: McGraw-Hill/Irwin. Chapter 7
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