Big Toy Maker

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

The parties did have a contract for exclusivity for 90 days of which BTT paid Chou 25,000 dollars. The terms of this contract prevented Chou from seeking or accepting offers from other companies for the rights to manufacture and distribute the game. This contract also stated that there is no agreement to actually manufacture and distribute the game by BTT unless one is placed in writing. This portion of the contract clarifies that while they are interested to the point that they want to ensure Chou does not give the rights to someone else and pay him to do so until an agreement is made that this contract does not guarantee that BTT will actually manufacture and distribute the game.

There is potential in confusion on this matter because before the 90 day period expired there was a meeting and an oral agreement was made and an e-mail was sent from BTT repeating the terms of the agreement for distribution and all the key terms such as price. This could give the illusion of a contract however it is actually still in the form of an offer as Chou did not provide a written agreement and nothing was signed. This e-mail was still just part of the negotiation process not the actual agreement.

The use of e-mail has created problems when it comes to contracts and this is an issue that is continuing to be worked out. Due to the fact that there was the exclusivity contract, the e-mail came from a manager, it covered the terms as required under the statues of fraud, and it states the terms are agreed by both parties you could say they had also created a contract for the distribution as well. One factor in determining if this is true or not that is not offered in the information provider is if the e-mail had a typed signature at the bottom, I would say it is safe to assume yes as this is a standard business practice. This is because under the statues of fraud the signature required is that of whom the contract is enforced against and in this case Chou is looking to make BTT uphold their end of the deal and distribute the game.

Ultimately I believe they have a contract for distribution.

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

BY entering into the exclusivity contract and paying Chou 25,000 dollars BTT sent the message that they had serious intentions of following through on creating a formal distribution contract. This would be a factor that helps Chou's case. The other factor that weighs heavily in Chou's favor is that BTT sent a detailed e-mail covering the specific terms of the oral agreement for distribution including the price, time frame, and both parties obligation and that all the terms where agreed too and this was done in writing and labeled "Strat Deal". A month after the 90 days the BTT requested a draft suggesting the deal was still good. It is unclear if this e-mail was sent in the 90-day time frame; it was that would be another factor in Chou's favor. Also, once again, under the statues of fraud the signature required is that of whom the contract is enforced against and in this case Chou is looking to make BTT uphold their end of the deal and distribute the game.

.

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 fact it was