- Big Time Toymaker (BTT) paid inventor Chou $25,000 for exclusive negotiation rights over 90 days to distribute Chou's new strategy game, Strat. - Within the 90 days, BTT and Chou orally agreed to a distribution deal over email, which included terms like pricing and obligations, but no formal contract was signed. - Chou believed the email formalized the deal, but BTT later said it was no longer interested in distributing Strat. This would constitute a breach of contract by BTT if the email formed a valid agreement.

1. Case Scenario: Big Time Toymaker
Antwon Patton
LAW 421
July 06, 2014
Paul W. Lock J.D., L.L.M., C.P.A

2. 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 spreading 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
cost, 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 an agreement, 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?
A contract was created between the two parties, when BTT sent over the e-mail title Strat deal
this has become a contract when Chou accepted the offer and sent it back. I first thought the
contract was made when BTT gave Chou $25,000 in exchange for exclusive rights for 90-days,
and Chou accepted the offer, but it clearly states that no contract will be made unless it is in
writing.
2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent
to contract?
The facts that will weigh in the favor of Chou is that BTT sent Chou an e-mail that was entitled
Strat Deal that contained all of the information from their agreement for distribution which
included time frame, price, and the obligation for both parties. This was all done within the 90
days of the agreement making it a valid offer. As long as Chou accepted the offer with the proper
time frame this will work in favor in the object of purpose to the 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)?
The fact that both parties was communicating through e-mail shows that both party had
knowledge of what was going on through this process and at some point during this deal they
was in agreement with each other continuing to move forward.

3. 4. What role does the statute of frauds play in this contract?
Statue of fraud plays a role in this contract under the Uniform Commercial Code. When it
comes to the statue of fraud it is applies to any good or service that cost up to 500.00 dollars or
more. BTT exchanged 25,000 dollars for exclusive rights for 90-days that was accepted by Chou,
but because the agreement that was discussed was not properly carried out as agreed upon.
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?
BTT cannot avoid this contract under the doctrine of mistake, because there is nothing
showing that there was a mistake on behalf of BTT. All it shows in this scenario is that BTT had
a change of mind with conducting business with Chou that is not a valid reason to avoid the
contract under the doctrine of mistake. There is no defense that either party will have to that will
allow the contract to be avoided because there are no signs of error. The only defense that both
party will have, is if they both come to an agreement to cancel the contract making it legal for
both parties to avoid the contract.
6. Assuming, arguendo, that this e-mail does constitute an agreement, what consideration
supports this agreement?
If the e-mail that was sent does not constitute an agreement between the two parties, the
thing that will help support this agreement will be the 25,000 dollars that was giving by BTT and
accepted by Chou because the exchange of equal value for goods will be supported arguendo
agreement.
7. 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.
If there was an agreement in place and BTT reached the contract, by not distributing
the game, Chou would be able to recover compensation damages. When a contract is in place
and BTT breaches the term of the contract Chou will be able to collect compensation on the loss
of anticipation damages do to the withdraw of contract by BTT that was agreed upon. The
compensation will be determined the lost the will take place do to the lack of ability of BTT not
keeping there in and filling their part. Do to the situation this can also include future losses that
was expected due to the circumstances. The remedy that will be applicable in this scenario is that
Chou can seek the court to a court order BTT perform their end of the contract, forcing them to
distribute Strat these will fall under specific performance, other remedies will consist of
injunction, and delegation. Injunction is a remedy that will be in the favor of Chou securing his
product making sure that BTT do not later try and make a similar game to Strat, backed by court

4. order Prohibiting BTT to do so. Delegation is appropriate meaning that BTT do not have to do
the work they can send the work out to another manu