A contract is an agreement between two parties that is enforceable in court. A verbal and/or written becomes valid when there has been a promise, an acceptance, and consideration relating to the terms of the agreement. At any point, a binding contract is breached, “the law provides certain relief for aggrieved parties that suffer losses as a result of another’s party breach of contract” (Melvin, 2011). Therefore, non-breaching party may be awarded with remedies to recover losses and damages.
The following scenario between Big Time Toymaker (BTT) and Chou is about BTT’s interest to the exclusive negotiation right for 90-day period in exchange for $25,000.00 with the provision that no distribution contract existed unless a written contract is reached to Chou’s new invention, Strat game.
1. At what point, if ever, did the parties have a contract?
A contract between BTT and Chou was created when Chou accepted the agreement and received $25,000.00 in exchange for BTT’s 90-day period of exclusive negotiation agreement with the provision of the distribution agreement that must be in writing. The BTT’s e- mail to Chou with the subject line “Strat Deal” recapping the verbal distribution agreement that included the price, time frames, and obligation of both parties constitute a contract. And in addition, BTT also requested Chou to fax a draft agreement to them. Our text states that, “An enforceable contract must have a mutual assent between the parties involved” (Melvin, 2011). Mutual assent meaning that there is an offer and acceptance for the parties involved in which is the case for BTT and Chou that had verbal agreement during their meeting three days before the end of a 90-day period.
2. What facts may weigh in favor or against Chou in terms of the parties’ objective intent to contract? The facts that will weigh in favor of Chou in terms of the intent to contract is that the verbal distribution agreement was concluded during their meeting three days before the 90-day negotiation agreement followed by the e-mail from BTT recapping the key terms that were agreed upon and a request to fax a draft for the contract. The facts that will weigh against Chou is that he did not respond to confirm and agree to BTT’s email, no written agreement signed by both parties to bind the contract which was the requirement on their 90-day negotiation, and the 90-day deadline had passed with only the verbal 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)? The email from BTT to Chou have impact on my analysis because both parties could interpret the e-mail differently and put them at possibility of entering a contract without clear notion. It was definitely harder to decide if the email from BTT cannot be considered a written contract because it shows that there was an acknowledged verbal agreement prior to the email between BTT and Chou. Using the mailbox rule, if this e-mail had a name at the bottom of the page, which is considered a signature in an electronic document (Melvin, 2011, p. 137).
4. What role does the Statue of Frauds play in this contract? The text states “The statue of frauds is the law governing which contracts must be writing in in order to be enforceable” (Melvin, 2011, p. 151). In this case, BTT’s email could