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Case Scenario: Big Time Toymaker

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1. At what point, if ever, did the parties have a contract?

After reading the scenario, Big Time Toymaker (BTT) and Chou did partake in an oral contract. During a meeting between BTT and Chou an oral distribution agreement was reached, also an e-mail sent by BTT to Chou confirmed the key terms of the agreement reached during the meeting.

2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract?

The facts in favor for Chou would oral agreement and email he received from BTT. The facts against Chou would be that there is never an actual written agreement drafted by Chou or the fact that Chou entered into an exclusive negotiation rights agreement for 90 days specifically stating, “No contract exists unless it is in writing.” Finally, no written agreement was turned in within the original 90-day period stipulated in the exclusive negotiation right.

3. Does the fact that the parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)?

Yes, because the email represents the acknowledgment by both parties of the distribution agreement made in the meeting despite the e-mail failing to mention the word “contract.”

4. What role does the statute of frauds play in this contract?

The role of fraud applies to this scenario. “Under the Uniform Commercial Code, 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, 2010). Chou received a payment of $25,000 in exchange for exclusive negotiation rights for a 90-day period, in which was not met.

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, BTT cannot void this because of a mistake. BTT

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