Big Time Toymaker Case Study
Big Time Toymaker Scenario
Angela Brinnen
LAW 421
August 4, 2014
Barry Preston
Big Time Toymaker Scenario
At what point, if ever, did the parties have a contract?
After carefully reviewing all of the information about the case of Big Time Toymaker (BTT) and Chou, I have found that there were two different contracts in place. In the text it describes a contract as “a promise or set of promises enforceable by law” (Melvin, 2014), these contracts can be oral or written. The first contract in place is a bilateral contract, this contract is clearly defined in the practice theory when Big Time Toymakers offers Chou $25,000 in exchange for “exclusive negation for a 90-day period" (Melvin, 2014, p.155) to which Chou accepted. The second part …show more content…
of this contract is when Big Time Toymakers pays Chou $25,000 for this agreement, and he accepts the cash. The second contract that was agreed on at a meeting between Big Time Toymaker and Chou toward the 90-day agreement was a verbal agreement approved by both parties, but wasn’t complete as there was a clause in the original agreement that stated that a written agreement would be the only way that a distribution contract was in place. The verbal turned into a written agreement due to the Mailbox rule, which by the text states “that the acceptance of an offer is effective upon dispatch and not when the acceptance is received by the offeree” (Melvin, 2014). When Chou received the email and accepted their offer there was a binding contract in place thanks to technology.
What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? There are two factors that weigh in Chou’s favor the original agreement that allowed them BTT the 90-day period for negotiation and the e-mail stating the terms that were reached in a meeting a few days prior to the expiration of that agreement. This information shows that Big Time Toymakers had every intention of distributing his game. There is one major factor that works against Chou, and that is there is not a genuine signature on the agreement that means that he would have to prove its authenticity. This gives the new owners enough of an argument to fight Chou in court to get the contract voided.
Does the fact that the two parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)? No as there is a clear definition on how contracts can be honored, even with the use of technology.
Just because the business world moves faster doesn 't mean that laws haven 't changed to conform to honor the ability of technology or those that utilize it to make business transactions faster. It just goes to show that even big businesses are accountable for deals that are made with the use of it. In this case, Big Time Toymakers and Chou have a binding and enforceable contract.
What role does the statute of frauds play in this contract? The statue of frauds plays a key role this case as it relates to more than $500 worth of the sale of Chou 's game "Strat". "Under the Uniform Commercial Code 's "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, 2014). This case is very similar to another that I read in the text that validates a contract that was sent via e-mail. The amount of games is unclear, but looking at the size of Big Time Toymaker 's operation it is clear that the statute of frauds is one avenue of enforceability.
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 Big Time Toymakers could not avoid this contract under the doctrine of mistake as both parties agreed on the terms in a meeting and then when communicating via e-mail. The definition of mistake is stated in the text as “an erroneous belief that is not in accord with the existing facts” (Melvin, 2014).
Assuming, arguendo, that this e-mail does constitute an agreement, what consideration supports this agreement? As there was an enforceable contract in place Chou could sue Big Time Toymakers for breach of contract, entitling him to damages. These damages would consist of both compensatory and consequential damages to cover the loss of income by the injured party. The losses that may be recovered can be anything from out of pocket expenses to loss of income due to a breach in contract.
References
Melvin, S. P. (2011). The legal environment of business: A managerial approach: Theory to Practice. New York, NY: McGraw-Hill/Irwin.
Angela Brinnen
LAW 421
August 4, 2014
Barry Preston
Big Time Toymaker Scenario
At what point, if ever, did the parties have a contract?
After carefully reviewing all of the information about the case of Big Time Toymaker (BTT) and Chou, I have found that there were two different contracts in place. In the text it describes a contract as “a promise or set of promises enforceable by law” (Melvin, 2014), these contracts can be oral or written. The first contract in place is a bilateral contract, this contract is clearly defined in the practice theory when Big Time Toymakers offers Chou $25,000 in exchange for “exclusive negation for a 90-day period" (Melvin, 2014, p.155) to which Chou accepted. The second part …show more content…
of this contract is when Big Time Toymakers pays Chou $25,000 for this agreement, and he accepts the cash. The second contract that was agreed on at a meeting between Big Time Toymaker and Chou toward the 90-day agreement was a verbal agreement approved by both parties, but wasn’t complete as there was a clause in the original agreement that stated that a written agreement would be the only way that a distribution contract was in place. The verbal turned into a written agreement due to the Mailbox rule, which by the text states “that the acceptance of an offer is effective upon dispatch and not when the acceptance is received by the offeree” (Melvin, 2014). When Chou received the email and accepted their offer there was a binding contract in place thanks to technology.
What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? There are two factors that weigh in Chou’s favor the original agreement that allowed them BTT the 90-day period for negotiation and the e-mail stating the terms that were reached in a meeting a few days prior to the expiration of that agreement. This information shows that Big Time Toymakers had every intention of distributing his game. There is one major factor that works against Chou, and that is there is not a genuine signature on the agreement that means that he would have to prove its authenticity. This gives the new owners enough of an argument to fight Chou in court to get the contract voided.
Does the fact that the two parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)? No as there is a clear definition on how contracts can be honored, even with the use of technology.
Just because the business world moves faster doesn 't mean that laws haven 't changed to conform to honor the ability of technology or those that utilize it to make business transactions faster. It just goes to show that even big businesses are accountable for deals that are made with the use of it. In this case, Big Time Toymakers and Chou have a binding and enforceable contract.
What role does the statute of frauds play in this contract? The statue of frauds plays a key role this case as it relates to more than $500 worth of the sale of Chou 's game "Strat". "Under the Uniform Commercial Code 's "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, 2014). This case is very similar to another that I read in the text that validates a contract that was sent via e-mail. The amount of games is unclear, but looking at the size of Big Time Toymaker 's operation it is clear that the statute of frauds is one avenue of enforceability.
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 Big Time Toymakers could not avoid this contract under the doctrine of mistake as both parties agreed on the terms in a meeting and then when communicating via e-mail. The definition of mistake is stated in the text as “an erroneous belief that is not in accord with the existing facts” (Melvin, 2014).
Assuming, arguendo, that this e-mail does constitute an agreement, what consideration supports this agreement? As there was an enforceable contract in place Chou could sue Big Time Toymakers for breach of contract, entitling him to damages. These damages would consist of both compensatory and consequential damages to cover the loss of income by the injured party. The losses that may be recovered can be anything from out of pocket expenses to loss of income due to a breach in contract.
References
Melvin, S. P. (2011). The legal environment of business: A managerial approach: Theory to Practice. New York, NY: McGraw-Hill/Irwin.