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CASE STUDY- Big Time Toymaker (BTT)

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Question;Big Time Toymaker (BTT) develops, manufactures, and distributes board games and other toys to the United States, Mexico, and Canada. Chou is the inventor of a new strategy game he named Strat. BTT was interested in distributing Strat and entered into an agreement with Chou whereby BTT paid him $25,000 in exchange for exclusive negotiation rights for a 90-day period. The exclusive negotiation agreement stipulated that no distribution contract existed unless it was in writing. Just three days before the expiration of the 90-day period, the parties reached an oral distribution agreement at a meeting. Chou offered to draft the contract that would memorialize their agreement. Before Chou drafted the agreement, 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. Although the e-mail never used the word contract, it stated that all of the terms had been agreed upon. Chou believed that this e-mail was meant to replace the earlier notion that he should draft a contract, and one month passed. BTT then sent Chou a fax requesting that he send a draft for a distribution agreement contract. Despite the fact that Chou did so immediately after receiving the BTT fax, several more months passed without response from BTT. BTT had a change in management and informed Chou they were not interested in distributing Strat.;1. At what point, if ever, did the parties have a contract?;2. What facts may weigh in favor of or against Chou in terms of the parties? objective intent to contract?;3. Does the fact that the parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)?;4. What role does the statute of frauds play in this contract?;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?;6. Assuming, arguendo, that this e-mail does constitute an agreement, what consideration supports this agreement?

 

Paper#36112 | Written in 18-Jul-2015

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