Case Scenario: Big Time Toymaker

Case Scenario: Big Time Toymaker
In a business environment contracts are used on a day to day basis and they are an important area of focus for owners and managers. According to (Melvin, 2011)”A contract is formed when two or more parties agree to a particular set of terms.” Contracts are essential to businesses because it helps companies to do business with other companies without posing too much of a risk on their end, as long as the contract will stand up in a court of law. Some contracts are written agreements and others are oral agreements and as long as they meet the requirements they are considered a binding contract.
In the case of the company Big Time Toymaker or BTT and Chou entered into a contract three days before the 90-day period expired. The text states that the parties reached an oral distribution agreement in a meeting. In respect to contract formation the parties had an oral agreement which to my understanding means the parties met a mutual assent agreement using a combination of offer and acceptance. (Melvin, 2011) The parties not only reached an oral agreement but there was also an email sent from BTT manager describing the key terms of the agreement and the subject line of the email stated “ Strat Deal”.
The facts that that may weigh in favor for Chou in this situation are that there was a meeting between the two parties and an oral agreement was reached, there was an email sent from BTT manager to Chou repeating the key terms of the agreement; which included price, time frames, and obligations of both parties and BTT sent a fax requesting a draft for a distribution agreement. In this case Chou has all the necessary elements of contract formation which are agreement, mutual assent, consideration, capacity, and legality to have a legally binding contract. The fact that the parties were communicating via email does not affect my analysis of the situation, if anything it makes the case stronger for Chou because they were not only communicating...