Toymaker: Contract and Btt Essay

Submitted By JasynC66
Words: 676
Pages: 3

1. At what point, if ever, did the parties have a contract?
After reading the scenario, I believe there was a contract when BTT sent an email to Chau referencing the intimal terms of agreement. Here’s the text from the scenario… “a BTT manager sent Chou an e-mail with the subject line “Strat Deal” that repeated the key terms of the distribution agreement including price, time frames, and obligations of both parties.” This is where the deal became legal binding.
2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract?
Mutual Assent. Both parties had verbally agreed to the deal. A reasonable person would have assumed the deal was going to go through because BTT paid Chau $25,000 for negotiation rights for a 90 day period. At this point there was an enforceable agreement between Chau and BTT.
3. Does the fact that the parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)? 1- No, the communication by email had no impact on my analysis. The fact still remained that there was no signed contract between the two parties. 2- Yes & No, I could see where Chou could think the email sent by the BTT manager showed intent to contract; however, if he paid attention at the very beginning he would have recalled that without a signed contract there was no agreement past the 90 days.
4. What role does the statute of frauds play in this contract? According to Melvin (2011) the statute of frauds is a law governing which contracts must be in writing in order to be enforceable and the UCC requires that the contracts for sales of goods valued at more than $500 be in writing but it does require that only one document contains (1) quantity, (2) signature of party who enforcement is for and (3) the language shows parties intended to form a contract (Melvin, 2011). The payment that Chou received ($25,000) was in exchange for exclusive negotiation rights for a 90 day period but that period ended or expired before the contract was drafted.
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? BTT could not avoid the contract under the doctrine of mistake due to the fact that BTT intended on fulfilling its contractual obligations prior to the change in management at their company. A fax was sent to Chou requesting a draft of distribution agreement after the e-mail was sent about the conversation earlier discussed. There was no unilateral mistake on behalf of BTT but Chou on the other