Case scenario: Big Time Toymaker Read the “Theory to Practice” section at the end of Ch. 6 of the text.
Answer Questions 1 through 6 based on the scenario in the “Theory to Practice” section, and complete the following in your response:
At the end of the scenario, BTT states that it is not interested in distributing Chou’s new strategy game, Strat. Assuming BTT and Chou have a contract, and BTT has breached the contract by not distributing the game, discuss what remedies might or might not apply. Explain your answers and refer to Section 7-6 in Ch. 7 for support.
1. At what point, if ever, did the parties have a contract? According the scenario and section according to § 2-206 contract existed verbally only. Establishing the terms should have followed the verbal agreement but it did not happen. § 2-206 said that either or party should follow up on the obligations of agreement or contract and none did so now under new management contract never existed do to not following up properly.
2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? On §2-106 talks about cancellation of contract. BTT is cancelling the contract because management has change but BTT can be liable for the $25000 for the 90 days that Chou was to provide strat to BTT. It is on Chou’s favor that now BTT is terminating contract, and the previous management did not object to not getting the Strat on accorded time. But Chou can be taken to court for not filling his obligation to the verbal 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)? Of course, yes, because the contract was primarily verbal and the emails were the way both parties choose to follow up on agreement. But there was not actual contract word in the emails. So, this is a good clue to find a remedy.
4. What role does the statute of frauds play in this contract? § 2-201 Formal requirement; Statute of Frauds. Chou has a verbal contract with BTT for over the $500 stipulated in the section of the commercial code on § 2-201, plus the problem was that BTT did not object to not getting the strats on the accorded time. Aside according to point two of same section, either party gave no objections. Last, agreed and accepted payment was received, but failed to fulfill his part of the 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? Yes, because when both parties failed to follow up and if either party would have object then verbal agreement would have easily been dissolve. But BTT was negligent therefore they just lost to Chou $25000
6. Assuming, arguendo, that this e-mail does constitute an agreement, what consideration supports this agreement? If BTT decides the emails are the contract in order to get the $25000 back from Chou for failing to deliver the service he promise to BTT then arguendo or validity of the emails would come to count but it actually does not after analyzing sections § 2-206 to §2-301.