Theory to Practice: Big Time Toymaker
At what point, if ever, did the parties have a contract?
I believe that Chou and Big Time Toymaker (BTT) didn’t have a legal binging distribution contract. A contract is an agreement between two parties that is enforceable by law and will be accepted in a court of law. There are times that contract law may exclude one or both parties due to certain conditions. In the BTT case scenario, BTT and Chou never finalized an enforceable and binding contract. Both parties entered into a verbal agreement of expectations, but never solidified the negotiations via a written contract within the 90-day deadline.
What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract?
Big Time Toymaker is an Original Equipment Manufacturer (OEM) and provides Supply Chain Management (SCM) for board games and other toys. BTT was interested in updating their distribution models and started negotiations with Chou for a distribution agreement. Chou would be paid$25,000.00 to distribute Strat, a new strategy game that Chou invented, however both parties made only an oral agreement. When the oral agreement passed the preliminary 90-day interim, no contract was generated to distribute the new strategy board game.
When the verbal agreement passed the initial 90-day deadline, no contract was formally created to distribute the new strategy board game. This caused Chou to move away from the agreement rather than proceeding with the verbal agreement. The emails that BTT’s management team sent to Chou did not constitute or replace the written contract that both parties verbally agreed upon. Some may argue that the email could be immiscible, if there was a signature at the end. Even if that were true, Chou would’ve had to respond to that email, agreeing to the context and terms and the signature at the end must be present.
Below provides a diagram of the positivesand negative intent of a contract within the BTT case scenrio from Chou’s point-of-view:
Does the fact that the parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)?
Yes. Communication vehicles have changed due to the digital world we currently live in. There are different methods that companies use to conduct their operations. Among those methods, emails and texting have increased in popularity. The court of law finds facts embedded in these methods admissible. In this case, the email sent by BTT to Chou did provide the specifications of their verbal agreement. In my opinion, this act could be used against BTT in Chou’s defense as intent, but cannot be a binding contract due to the mutually agreed upon oral negotiations of a written binging contract.