1. At what point, if ever, did the parties have a contract?
Our textbook defines a contract as “a promise or a set of promises enforceable by law” (). A contract does not necessarily has to be in writing. A contract can be oral and enforceable. Big Time Toymaker and Chou took part in an oral contract. Big Time Toy Maker and Chou held a meeting where an oral distribution agreement was reached. In addition, Big Time Toy sent an email to Chou confirming the agreement.
2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract?
The facts that may weigh in favor of Chow are the exclusive negotiation rights for a 90-day period, the oral agreement that was reached at the meeting and the email he received from Big Time Toy. The facts against Chou would be that there is never an actual written agreement drafted by Chou. In addition, the exclusive negotiation rights agreement stipulated that no distribution contract existed unless it was in writing. Finally, no written agreement was turned in within the original 90-day period stipulated in the exclusive negotiation right agreement.
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.” In addition, the subject line of the email read “Strat Deal” and it explained in detail the price, time frames, and obligations. Also, as soon as Big Time Toy sent a fax to Chow requesting the draft of the contract, he faxed it to them immediately.
4. What role does the statute of frauds play in this contract?
“The statute of fraud is the law governing which contracts must be in writing in order to be enforceable” (Melvin, 2010). The role of fraud applies to this scenario. The statute of frauds refers to the requirement that certain kinds of contracts be memorialized in a signed writing with sufficient content to evidence the contract. Traditionally, the statute of frauds requires a signed writing in the following circumstances. A defendant in a statute of frauds case who wishes to use the Statute as a defense must raise it in a timely manner. The burden of proving that a written contract exists only comes into play when a Statute of Frauds defense is raised by the defendant. A defendant who admits the existence of the contract in his pleadings, under oath in a deposition or affidavit, or at trial, may not use the defense under the Uniform Commercial Code (UCC), however under common law they may still use it.