Access over 20 million homework & study documents


Law 421 Big Time Toymaker




Showing Page:
Law 421 Big Time Toymaker
Big Time Toymaker
Big Time Toymaker (BTT) agreement with Cho for extension of exclusive
distribution rights is being challenged due to a lack of written agreement.
BTT reached an oral agreement which is not binding due to the
stipulations in their original agreement, which states that all contracts
must be in writing. Both parties have communicated the terms of the
distribution agreements via email and fax, after a change in
management at BTT, Cho’s verbal agreement fax, and email
communications are being challenged and are not recognized as a
binding contract by BTT.
Case Scenario Big Time Toymaker
Determining the legitimacy or the point where both parties entered into
an agreement will determine if the contract is valid or unenforceable. In
this scenario both parties have an oral agreement, which took place
before the 90 day expiration period. According to Uniform Commercial
Code (UCC) a contract can be enforced based on a larger picture that
consists of (1) past commercial conduct, (2) correspondence or verbal
exchanges between the parties, and (3) industry standards and norms
(MELVIN, 2012, p. 182). The question is, are the agreements
enforceable since both a verbal and a written agreement exists.
Contract established
Big Time Toymaker sent Chou a drafted agreement, the email displayed
the terms of the contract, and the title of the email read ”Strat Deal”; to a
reasonable person this can be construed as an agreement. Chou
reasonably believes that BTT email was a contract and because the
email states that the terms were agreed upon. One argument could be
that BTT did not sign the agreement but according to Marin Samson a
New York attorney Samson (2012) “Court holds that an e-mail sent by
one merchant to another purporting to confirm an agreement to
purchase goods is sufficient to satisfy the requirements for a writing
contained in the Statute of Frauds, as set forth in NY UCC § 2-201(2),
known as the merchant's exception” (para. 1). the challenge Chou may
face is enforceability of the contract. Melvin states “A contract is of little

Sign up to view the full document!

lock_open Sign Up
use if it is not enforceable in a court of law and business owners and
managers can reduce risk and unnecessarily exposing their company to
liability by ensuring that contracts are not only properly formed, but
legally enforceable” (MELVIN, 2012, p. 126). BTT can say that the email
is not enforceable because there is no signature and that all proposals
are sent out in the same manner.
Intent of Contract
The facts that Chou had a previous agreement with BTT, along with
emails and fax can show Chou had an offer and may pass as evidences
of agreement. His disadvantage is that he does not have a signed
contract, and his original contract clearly states that a written contract is
the only binding contract. Chou also has intent according to Melvin
“When applying the law, courts look to the intent of parties involved and
adhere to a standard of good faith and fair play instead of applying the
letter of the law in a way that would violate fundamental principles of
fairness and consistency” (MELVIN, 2012, p. 131). Because Chou had a
detailed email outlining intent a court may determine that the email was
indeed a contract but the lack of signature is a hard hurdle to escape
because BTT could show that all their potential clients receive similar
emails as an outline and not an official agreement; Chou can also ask for
proof of such behavior to solidify his argument.
The fact that both parties were communicating via email will just show
that both parties were in negotiations. Neither party can use the mistake
doctrine because there are no disagreements on the terms of the
agreement. The argument is rather the email communication counts as
an offer, and because there was no conclusion with a signature by both
parties’ emails can be looked at as just a negotiation. BTT advantage is
that that the email was merely a draft and not a final proposal, the
statute of fraud is important and is the key to BTT’s defense. The Statute
of fraud states that “The one element that is uniformly required is a
signature of the party against whom enforcement of the contract is
sought” (MELVIN, 2012, p. 126). Because the company did not sign an
agreement with Chou, as required by UCC, it leave the burden of proof
on Chou.
Big Time Toymaker had a verbal agreement with Chou, because BTT
stipulated that all contracts must be written, the verbal agreement was

Sign up to view the full document!

lock_open Sign Up
not enforceable. Chou’s only line of defense was through the
communications healed via email with BTT, which reinforced his verbal
agreements. UCC protects BTT because no singe agreements were
produced by either party, therefore Chou has no contract.
MELVIN, S. P. (2012). The Legal Environment of Business: A Managerial
Approach: Theory to Practice, 1e. Retrieved from
Samson, M. (2012). Statute of Frauds. Retrieved from

Sign up to view the full document!

lock_open Sign Up

This is great! Exactly what I wanted.