At what point, if ever, did the parties have a contract?
A simple explanation of a contract would be, an agreement which is enforced and recognized by a court of law. In the case of Big Time Toymaker (BTT) and Chou (inventor of a new strategy game, Strat), there are various different types of contracts. One of the contracts was an oral agreement, within which BTT made an exchange of $25, 000 for the exclusive rights for the negotiation period of 90 days. Melvin, S. (2011) states that ‘any agreement, whether it is written or oral, can eventually result in a binding contract, as long as it meets certain requirements’. The contract was formed after both parties reached an agreement, using a combination of offerings and acceptances, and both parties gave mutual consent. The offers were solely for negotiation rights, not for distribution. This oral agreement also stipulated that there was no contract which covered the distribution, until it was in writing. This agreements was mainly based on the service provided and not the goods, therefore, the Statute of Frauds law did not apply due to the Commercial Code stating that this law only applies to a contract for the sale of any goods over the value of $500.
What facts may weigh in favour of or against Chou in terms of the parties’ objective intent to contract?
When it comes to Chou, there are a few different facts which work in his favour, but at the same time they could also be used against him. For example, three days before the 90-day agreed negotiation period was up, BTT and Chou made an oral agreement on a distribution contract. The issue here is that the contract was now primarily based on the goods and it was also certain to exceed the amount of $500. This then brings the contract under the Statutes of Fraud law and so it is a mandatory requirement for these contracts to be in writing before they can be enforceable