Case Scenario

3 March 2017

After the meeting, Chou volunteered to draft the distribution contract that would formalize their agreement. However, before Chou could finish the draft, he received an e-mail from the BTT manager. The e-mail with the subject line “Strat Deal,” focused on the key points of the distribution agreement between both parties, including the price, time frames, and obligations of both parties. After receiving this e-mail, Chou incorrectly assumed that BTT wanted to draft the contract. Thus Chou stopped working on the draft and a month passed by. This passage of time voided any previous agreement because of the 90-day clause to finalize the contract.

What BTT and Chou had was not a binding or enforceable contract. 2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? The facts that prove there was no binding distribution contract are: (1) There was no written distribution agreement as stated as a requirement in the original terms of the negotiating contract, (2) No signatures were used to bind the agreement and the word “contract” was never used in the e-mail sent by the BTT manager to Chou, and (3) The 90-day deadline agreed upon in the original negotiating contract passed without a written agreement.

Case Scenario Essay Example

All other contingencies became void once this deadline passed without a signed written agreement. 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 both parties were communicating by e-mail does not change my analysis for either questions one or two. The Uniform Electronic Transactions Act (UETA) states that as long as the involved parties agree to use electronic commerce for their transactions, certain forms of electronic media is recognized as a legal form of correspondence (Melvin, 2011).

The UETA equates electronic signatures and records to the same legal status when compared to traditional signatures and paper records, providing the following requirements are met: (1) a record or signature may not be denied legal effector enforceability solely because it is in electronic form, (2) a contract may not be denied legal effect or enforceability solely because an electronic record was used in its information, (3) if a law requires a record to be in writing, an electronic record satisfies the law, and (4) if a law requires a signature, an electronic signature satisfies the law (Melvin, 2011).

Currently, 47 states have adopted the UETA in some form (Melvin, 2011). Although BTT and Chou were communicating by e-mail, their stipulation of their original negotiating contract was for the distribution contract to be in writing. 4. What role does the statute of frauds play in this contract? The statute of frauds is the law governing which contracts must be in writing in order to be enforceable (Melvin, 2011). Under the UCC (Uniform Commercial Code), the statute of frauds applies to any contract for the sales of goods in excess of $500.

The negotiations between BTT and Chou were certainly in excess of $500, so the statute of frauds would apply here. For common law contracts the statute of frauds applies to: (1) contracts that involve the sale of an interest of land, (2) contracts that cannot be performed under one year, (3) contracts to pay the debt of another, and (4) contracts made in consideration of marriage. The role this statute plays in this contract is to stipulate that it must be in writing. This is according to the original negotiating contract between BTT and Chou. . 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? A mistake is defined in contract law as a belief that is not in accord with the facts. The law recognizes certain mistakes and provides a solution intended to make the parties whole again (Melvin, 2011). However, a mutual mistake may be the basis for canceling a contract (also called avoiding the contract) when both parties hold an erroneous belief.

The mistake in this case focusses on assumption made by Chou. After the oral agreement was reached, Chou offered to draft a written version of the contract. During this process, Chou received an e-mail from the BTT manager who simply restated the key terms of the agreement. After receiving this e-mail, Chou mistakenly assumed the BTT manager wanted to draft the contract. This erroneous belief by Chou caused the 90-day deadline to pass without a written contract. This 90-day deadline was a binding stipulation of the original negotiating contract. . Assuming, arguendo, that this e-mail does constitute an agreement, what consideration supports this agreement? Assuming the e-mail between BTT and Chou does constitute an agreement, the facts from the e-mail may support this argument. The subject line of the e-mail was stated as the “strat deal. ” The e-mail repeated the key terms of the distribution agreement: price, 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 previously agreed upon.

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