Contracts are crucial in major business transactions. However, it is a recommendation to remain careful when entering into any agreement in the name of a contract. People must ensure that the agreements meet the definition of contracts (Melvin, 2011).
We will write a custom Essay on Big Time Toymaker and Chou Companies Contract specifically for you
301 certified writers online
A contract is a written document that is legally binding and involves more than one party. In view of the agreements between BTT and Chou, there were no contracts between them. The oral agreement does not meet the definition of a contract because a contract must be in writing. There was nothing to show that they signed a contract (Melvin, 2011).
However, Chou could prove that he was in the process of signing a contract with BTT. He could use the fax message from BTT against it to show that it had initiated a process of signing a contract with him. He could claim that he left another deal because he expected to sign one with BTT, only for BTT to cancel in the last minute (Melvin, 2011).
Email communications between BTT and Chuo have not contributed to the above analysis. The fact that there was email communications between Chou and BTT cannot prove that there was a contract between them, or they were about to sign a contract. Email accounts can be victims of hackers. There could be a possibility that their email accounts were under attacks by cyber criminals, which led to communications between the two emails accounts (Melvin, 2011).
The statute of frauds plays major roles in the case involving BBT and Chou. The statute is very clear that every contract must be in writing, signed, and must have adequate proof that shows the legality of the contract. BTT and Chou got in agreements that did not have sufficient proof to show that they were contracts. In the preliminary agreement, there was no any proof that it was a contract because the details of the agreement remained with the two parties exclusively. The second agreement was oral, which the statute of frauds does not recognize (Melvin, 2011).
There was no way BTT could avoid the contract with reasons defendable by the doctrine of mistakes. Doctrine of mistakes could only apply when there was a misunderstanding of a contract by one or all the parties involved in the contract. The fax message that BTT sent to Chou was categorical that there was a different management, which was no longer interested in signing the contract. Despite BTT having no legal reason for avoiding the distribution, it could defend itself against the accusation of breaching an agreement. Both statutes of frauds and doctrine of mistakes recognize a written and signed document as a contract (Melvin, 2011).
Assuming that the email from BTT contained an agreement, there was nothing to show it was a contract. Contracts require signing in the presence of all the parties involved. The handlers of the case should consider the qualifications of a contract, and decide if emails can be contracts (Melvin, 2011).
If BTT and Chou had a contract, then compensatory damages remedy would apply. BTT would provide Chou with the benefits he would have enjoyed after signing the contract. Consequential damages, restitution, liquidated damages, specific performance, and injunctive relief remedies would not apply (Melvin, 2011).
In conclusion, people planning to sign contracts should ensure that the contracts meet the requirements of the law. They should also ensure that they respect the conditions in the contracts. It should remain in their minds that breach of contract has legal consequences.
Melvin, S. P. (2011). The legal environment of business: A managerial approach: Theory to practice. New York: McGraw-Hill/Irwin.