1. At what point, if ever, did the parties have a contract? “One generally accepted definition of a contract is a promise or a set of promises enforceable by law” (Melvin, 2011, p. 194). In this scenario, Big Time Toymaker entered into an option contract with Chou. “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” (Melvin, 2011, p. 155).
The negotiation agreement stated exclusively that no distribution agreement was in place, unless in writing, therefore there was no official agreement between the parties. Furthermore, a Big Time Toy manager sent an e-mail to Chou stating the “Strat Deal” restating details of the oral agreement that included time frames, price, and commitments of parties involved (Melvin, 2011). There was intent to create a business deal, and the e-mail was evidence of the negotiations. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? A factor benefitting Chou is BTT paid him 25K for negotiation rights for a 90-day period.
I believe that Big Time Toymaker (BTT) and Chou had a contract when they had a meeting after the original agreement expired. When the meeting took place the parties reached an oral agreement to distribute the game. Then later on an e-mail was sent from a BTT manager labeled “Strat deal”. The facts can be that both parties had an agreement that BTT would pay Chou $25,000 for the exclusive rights of the game for a 90 day period. Another fact can be the oral agreement that was discussed in the meeting the two parties had along with the e-mail that was sent from a BTT manager stating the agreement in the e-mail.
The e-mail never mentioned the word “contract,” it did not have too because the four elements of contract formation were not present. The exclusive negotiation agreement stipulated that no distribution contract will exist unless it was in writing. Because of this clause no contract could be established unless in writing. What Facts may Weight in Favor of or against Chou The following facts may weight against Chou in terms of the parties objective intent to contract. The exclusive negotiation agreement stipulated that no distribution contract existed unless it was in writing.
This is a fact that would weigh in support of Chou; however, both parties only made a verbal offer and not a written agreement to demonstrate this fact. The agreement didn’t get drawn up during the initial 90-day term so the new administration would not be responsible to distribute the board game and had a valid reason to move Chou away rather than honor the verbal agreement. Does the fact that the parties were communicating by e-mail have any impact on your analysis in Questions 1 and 2 (above)? The basis that both parties were interacting by email had no effect on the analysis of the case. E-mail represents a form of electronic communication and not considered signed agreement.
In addition contract law defines certain circumstances that may excuse one or both parties from performing their obligation in the agreement. In the scenario Big Time Toymaker both parties never initiated a blinding distribution contract even though both parties had an oral distribution agreement, three days before the 90-day deadline. It is clearly stated in the original negotiating contract no distribution agreement will be engaged unless the contract is in writing. After both parties had a meeting, Chou was in the process in drafting the distribution contract which formalized their final agreement. Before he could finish draft, BTT managers send out an e-mail with the subject “Strat Deal” projecting the outline of the key points of the distribution agreement focusing on time frames, price and obligations of both parties.
When Chou received an email with the details of what they were going to agree upon, he presumed the email was the contract and did not proceed in drawing up a contract himself. Months passed, and when BTT changed management, BTT notified Chou that BTT was not going to peruse a distribution agreement for Chou's new strategy game, (Strat). In the Case Scenario, the two parties, BTT, which is the offeror and Chou which is the offeree were engaging in a goods or products type contract. State statutory law governs contracts that involved goods or products such as the strategy game that BTT was distributing for Chou. With the exception of Louisiana state statutory law.
| The accident not happened on the 30th of September 2003 | The recognition has no effect to Biovail’s financial statement. (revenue has been recognized before the accident happened) | The recognition has no effect to Biovail’s financial statement. (revenue not recognized yet because the delivery still not occurred) | 3) The revenue recognition requirements in accordance with U.S GAAP. i) Persuasive evidence of an arrangement exists; It seems clear that there is an ongoing relationship between Biovail and the Distributor and that certainly there was a bill, purchase order and/or invoice in order to support this sale. ii) Delivery has occurred or services have been rendered; The delivery was never realized due to the truck accident happened on the 30th of September 2003. iii) The seller’s price to the buyer is fixed or determinable;
Begin the sale of plastic rings in the competitor’s market, but continue selling steel rings in non-competitive markets till all manufactured steel rings are exhausted. Assuming a selling price of $1350 per hundred rings, the remaining 15100 steel rings could continue selling for another 5.5 months, which meant that for the full 49,600 steel rings sold PWI would get a net income of $61.7 million from steel rings alone. If PWI introduced the plastic rings in mid-September,
First, they say that it was no intention that brings to the legally binding agreement. But the court held that there was legal intention because it was a commercial transaction and intention was presumed. Another argue by the company said that the ad was just an invitation to treat (not a contract). But the court held that a newspaper advertisement was generally offers to treat, which in other word could be said specifically as an offer. Then, the company also argue that Mrs. Carlill did not make an acceptance or agreement to the offer, as one of a contract element.