...business need to be invented and worked. Existence of e-contract in the market is accomplishing the need for innovativeness in the traditional business segments. Businesses, both existing and new are trying to create an online individuality and an e-contract stand keeping in view the needs of the modern times. E-contract is one of the divisions of e-business. It holds a similar meaning of traditional business wherein goods and services are switched for a particular amount of consideration. The only extra element it has is that the contract here takes place through a digital mode of communication like the internet. It provides an opportunity for the sellers to reach the end of consumer directly without the involvement of the middlemen. New models of business demands different organisational charters. E-contract demands an organizational charter which caters to its new marketing needs. This mode of business enables businesses to save time on product design and device products according to the individual customer requirement, track sales and get immediate feedback from the customer. Contracts have become so common in day-to-day life that most of the time we do not even recognize that we have entered into one. Right from buying a vegetable and hiring a Cab or to buying an airline ticket online, uncountable thing in our daily exists is governed by contracts. The Indian Contract Act, 1872 rules the way in which contracts are made and...
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...Topic: Electronic Contracts – Issues and Challenges Electronic Contracts – Issues and Challenges Introduction: Electronic contracts (e-contracts) are governed by the basic principles provided in the Indian Contract Act, 1872 applicable to regular contracts, which mandates that a valid contract should have been entered with a free consent and for a lawful consideration between two adults. Electronic contracts are not paper based but rather in electronic form and are born out of the need for speed of execution, convenience and efficiency. Due to growing competition, organizations are focusing more on their core business activities and moving towards outsourcing of other activities and services. This business model necessitates companies to work with different vendors and partners by mutually arriving at contractual agreements in order to identify roles, responsibilities, obligations and deliverables of specific organizations and individuals. Typically, a legal contract forms the basis to regulate interactions between different parties in businesses and governs legal aspects when there is a breach of contract. The Indian Contract Act, 1872 governs the manner in which contracts are developed and executed in India. The Act governs the method in which the provisions in a contract are implemented and classifies the effect of a breach of contractual provisions. Within the framework of the Act, parties are free to choose the terms of the contract. The Act itself consists of limiting...
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...into picture, e-business has now become an easy way for interaction between firms and their customers. The Internet era has added a lot of value to the supply chain by helping firms to carry out a cost effective business, transfer of information between companies, suppliers and customers. The impact of e-business on supply chain integration can be seen mainly on four key points: information integration, effective Planning, workflow coordination &new business model. A virtual enterprise is formed when various autonomous companies come together and act as a unit by tightly integrating their business processes by the means of IT & ICT. A contract is an agreement built on the fundamentals of mutual commitment for cooperation, between two or more parties that binds those parties. In a B2B, e-business contract is a formal agreement between a buyer and seller for managing negotiations and validate operations. It is signed to address the issues of fraud and working on specific terms and conditions. It should describe both parties involved, definition of specific terms used in the contract, the jurisdiction under which the contract is valid and enforced, duration of the contract and the terms and conditions for each transaction. Therefore this calls for the need of formal norms for process-oriented contracts and specifies a criteria to form basis for synergy between the private view and public view of a contract on the fundamental lines of open nets & ensures a contract implementation...
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...Theory to Practice Normally the contract would have been formed when before the expiration of the 90 day period the parties reached an oral distribution agreement at the meeting. However, the exclusive negotiation agreement stipulated that no distribution contract existed unless it was in writing. The contract was formed when the BTT manager sent the "Strat Deal" to Chou. Since the e-mail contained all the key terms of the distribution agreement including price, time frames, and obligation of both parties, the e-mail complied with the requirement that the contract should be in writing. When the BTT manager sent the e-mail, the contract was formed (Andrews. N, 2011). There is an objective manifestation of intent to contract. The first manifestation of the intent to contract is the payment by BTT of $25,000 in exchange for exclusive negotiation rights for a 90-day period. The second manifestation of the intent to contract is the meeting between BTT managers and Chou where they reached an oral distribution agreement. Third the sending of e-mail drafted by BTT manager shows the intent to contract. Fourth, the stating of all the terms that had been agreed upon in the BTT manager e-mail shows the intent to contract (Barnett. R, 2010). According to the contract law, the offer is a manifestation of intent. During the negotiations an offer was made to Chou. This was the manifestation of intent to contract. The second manifestation was the valid acceptance of the offer during the meeting...
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...1) Had a contract for a 90 contract for exclusive negotiation agreement 2) Factors for Chou a. In favor i. Exclusive negotiation agreement ii. BTT’s email 3 days before that was subjected “Strat Deal” intent to sign iii. Follow up fax after deadline asking for draft b. Not in favor iv. Exclusive negotiation agreement stated that everything had to be in writing, so the negotiations and email could be viewed as part of the negotiation, no the actual contract. v. Draft done after the 90 days. 3) E-mail did impact my analysis as BTT did use terms that could be interpreted differently and put them at risk of entering a legal contract. 4) Statue of fraud is important in this as it requires specific contracts to be in writing. In this case, the statue of fraud provision is met if the writing includes quantity, signature of party, and language that would allow a reasonable person to conclude both parties intend to form a contract. The e-mail that stating the price, the language showing intent to contract, and the e-mail signature could satisfy the statue of fraud. 5) BTT could try to avoid the contract under doctrine of mistake, but they may not have a great case. They could try to state that the terms in the e-mail they sent three days before the 90 days were up were used in error. BTT could also argue that the contract was drafted after the 90 days, however Chou could argue the e-mail was a written...
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...Big Time Toymaker At what point, if ever, did the parties have a contract? BTT paid Chou $25,000.00 to have exclusive rights for negotiations for a 90 day period. Big Time Toymaker and Chou did not have a binding enforceable contract made during this 90 day period. An oral distribution agreement was made three day before the 90 days deadline, but it was in the negotiations. But the negotiations said that there was not supposed to be an agreement unless it was in writing. Three days before the deadline, after the meeting Chou offered to draft the contract that would formalize their agreement. Before Chou could finish the draft, an e-mail was received from a BTT manager. The e-mail repeated the key terms of the distribution agreement including price, time frame, and obligations of both parties. Chou stopped working on the draft for one month, because he believed that BTT was going to draft the contract. During this time the 90 days had passed and it voided any agreement of the 90 days agreement that BTT and Chou had (Melvin, 2011 pg. 136). What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? The facts that weigh against Chou’s in terms of the parties’ objective intent to a contract are that there was no written agreement, which was required in the negotiations. There was also no signatures were used to make the contract official. The word contract was never used in the email sent from BTT. Also the 90 day deadline that was...
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...what point, if ever, did the parties have a contract? After reading “Theory to Practice,” I believe the two parties, although never had a signed written contract, did reach a verbal agreement. The deal between Big Time Toymaker (BTT) and Chou begin when BTT paid Chou $25,000 for exclusive negotiation rights for a 90-day period. Three days before the end, the two parties reach an agreement and Chou volunteered to draft the contract. When a manager from BTT sent an email that outlined all the terms of the agreement, he titles his message as “Strat Deal.” This to me is additional proof that the two had come to an agreement. The error that occurred was when Chou assumed the email was replacing the earlier agreement the he would draft the contract. Again, through a fax, BTT asked for a draft of the distribution contract to be forwarded to them. Chou took care of that immediately but did not hear back from BTT for several months. Obviously BTT has gone through a change in management. New management took over and made the decision to informed Chou that they were no longer interested. 2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? The facts weigh in favor Chou because there was intent to contract. Although an official contract was never signed between the two parties, there was a verbal contract that had been reached. Second, the e-mail, although was not identified as a contract, did included all the contractual details. Third...
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...TIME TOYMAKER Big Time Toymaker Name University Big Time Toymaker Paper A contract is an agreement between two parties that is enforceable in court. In order to have a valid contract, there are several criteria that must be met that will be explained throughout this analysis. A verbal or written agreement may result in a binding contract if the required contract criteria are met (Melvin, 2011). Contracts are put in place to protect both parties on either end of the agreement. A Big Time Toymaker (BTT) was interested in a new game that was invented by Chou. BTT entered into an agreement with Chou for exclusive rights to his inventory for a 90-day period at the cost of $25,000. This paper will discuss some pros and cons of a contract, if and when a contract should apply to a situation, and some remedies for a breach of contract. The Background of the Contract BTT and Chou made an exclusive negotiation agreement for a 90-day period. This agreement had stipulations that a contract had to be in writing within this period. Before the expiration of this period, the parties reached an oral agreement in a meeting followed by an e-mail from BTT to Chou repeating their oral agreement on paper. This electronic document reiterated the key terms of what was agreed upon in the meeting between the parties (Melvin, 2011, p. 155). With areas agreed upon, the parties should be considered under contract. Positive and Negative Facts of Agreement There are several areas in this simulation...
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...the parties have a contract? I do not believe the parties had a contract at any point. Although the e-mail showed the intent to contract, it was not formed as a contract and neither party signed in agreement. 2. What facts may weigh in favor of or against Chou in terms of the parties’ objective intent to contract? The fact that an oral agreement was reached at a meeting and an e-mail stating the intent to contract was sent may weigh in favor for Chou but the fact that a written contract was never drawn nor signed weighs against Chou. 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 the parties were communicating through e-mail does have an effect on my analysis because it showed a written intent to contract however no actual contract was signed and agreed upon by both parties. 4. What role does the statute of frauds play in this contract? The statute of frauds does not play any role in this contract because it requires a signed writing for contracts for the sale of goods totaling $500 or more and no signed contract existed in this case. 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 could avoid this contract under the doctrine of mistake because Chou could have mistaken the e-mail as a contract. In this case, no written signed contract existed, therefore...
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...prepared a written contract. A written contract was supposed to be created for a deal between Big Time Toymaker (BTT) a company, which develops, manufactures, and distributes board games and other toys in North American and Chou who invented a new strategy game Strat. A contract was in process even the details had been identified, however; it fell through the cracks because of the management change at BTT. Initially, BTT paid Chou $25,000 for exclusive negotiation rights for a 90-day period and held meeting where details were discuss and agreed upon. Chou received an e-mail with the details of the contract, however; nowhere on the e-mail did it note that it was a contract. A month a lapsed without any interaction between BTT and Chou than Chou received a fax from BTT requesting a draft for a distribution agreement contract. Chou took care of that immediately and did not hear back from BTT for several months. New management at BTT took over and made the decision to informed Chou that they are no longer interested. The facts weigh against Chou because there was intent to contract. An official contract was never created between the two parties, which was the requirement in the negotiations. Second, the e-mail that included all the contractual details was never identified as contract. Furthermore, it was never made official with signatures. Third, originally Chou had taken the responsibility to create the contract, however; never did so once he received the e-mail from BTT. ...
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...have a contract? After reading the case scenario, I do not believe either of the two parties involved ever established a binding distribution contract. It is true an oral distribution agreement was achieved just three days prior to the 90-day deadline, which was a condition established in the original negotiating contract. However, as clearly stated in the original negotiating contract, there is not to be a distribution agreement, or contract, unless it is in writing. 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...
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...entered into an option contract with Chou whereby they paid him $25,000 for exclusive negotiation rights for distribution of his strategy game for 90 days. This negotiation agreement stated that no contract existed unless it was in writing. Three days before the 90-day period was over, BTT and Chou reached a verbal agreement at a meeting. Chou was to draft the agreement, but a BTT manager sent an e-mail to him entitled “Strat Deal” that included all aspects of the agreed-upon contract. Chou believed this e-mail was to negate his drafting of the contract. A month passed before Chou was asked by BTT to fax a draft of the contract, which he immediately did. Several more months passed before BTT contacted him again to revoke the contract. This paper will attempt to point out why Chou has a case against BTT for contract enforcement. This type of contract is governed by state statutory law based on the Uniform Commercial Code (UCC), Article 2, as it is a contract for the sale of goods. Generally, the contract would be considered unenforceable as it was stipulated by both parties in the original negotiation agreement that no contract existed unless it were in written form. The manager of BTT made a unilateral mistake according to the Doctrine of Mistake. He sent an e-mail outlining the terms of the contract and though it did not specifically contain the word “contract”, it did contain the word “deal” and outlined all of the terms required to make the contract enforceable. Courts are...
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...CHAPTER 18 REVENUE RECOGNITION MULTIPLE CHOICE—Conceptual AnswerNo.Description c1.Revenue recognition principle. b2.Definition of "realized." a3.Definition of "earned." d4.Recognizing revenue at point of sale. d5.Recording sales when right of return exists. c6.Revenue recognition when right of return exists. d7.Revenue recognition when right of return exists. b8.Appropriate accounting method for long-term contracts. c9.Percentage-of-completion method. b10.Percentage-of-completion method. c11.Classification of progress billings and construction in process. b12.Calculation of gross profit using percentage-of-completion. a13.Disclosure of earned but unbilled revenues. c14.Revenue, cost, and gross profit under completed contract. b15.Disadvantage of using percentage-of-completion. a16.Loss recognition on a long-term contract. c17.Accounting for long-term contract losses. d18.Criteria for revenue recognition of completion of production. a19.Completion-of-production basis. c20.Presentation of deferred gross profit. c21.Appropriate use of the installment-sales method. b22.Valuing repossessed assets. b23.Gross profit deferred under the installment-sales method. b24.Income recognition under the cost-recovery method. b25.Income recognition under the cost-recovery method. d26.Cost recovery basis of revenue recognition. d*27.Allocation of initial franchise fee. a*28Recognition...
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...the parties have a contract? Big Time Toymaker (BTT) granted Chou an agreement to a option contract. BTT pays Chou $25K to keep exclusive negotiation rights for a 90-day period. Therefore, BTT purchased the rights to negotiate a distribution agreement for Chou’s invention (a board game). The agreement stipulated that at the end of the 90-day period, if the parties could not come to terms on a distribution deal. Chou would be free to enter into a contract with another distribution company and keeps the $25K. This is a valid enforceable oral contract between BTT and Chou. Upon close study, I do not believe that the parties concerned ever had a distribution agreement contract. The negotiation agreement specified that no distribution contract existed unless it was in writing. The two came to an oral agreement three days before the 90-day deadline. Immediately, following the meeting the BTT manager sent Chou an e-mail with “Strat Deal” in the subject line, reiterating the key terms of the oral distribution agreement in regard to price, time frames, and obligations of both parties (Melvin, 2011). However, there was no evidence to show that Chou ever accepted the offer via e-mail in accordance with the governing common law mailbox rule. Only an oral agreement was reached; with no legally binding draft and the signature of both parties present, no contract exists. 2. What facts may weigh in favor or against Chou in terms of the parties’ objective intent to contract? Facts that weight...
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...rights for 90 days. During that time, Big Time honored the agreement, but three days shy of the expiration date, a Big Time manager forwarded a drafted agreement via e-mail, which covered the terms of the agreement. Chou received and responded to the draft in agreement with the terms; however, Big Time did not respond and months later Big Time was no longer interested( Melvin, 2011). The proposed contract existed immediately following the agreement to exclusive rights. The contract from that point was valid for 90 days following the agreement, which obstructed Chou’s ability to negotiate with other distribution outlets. The elements, which validate a contracts formation consist of an offer, BTT offered $25,000 to Chou for exclusive negotiation rights, acceptance Chou accepted the offer and monetary compensation, and finally the consideration for BTT exclusive negotiation rights to the game and Chou $25,000 (Melvin, 2011). The Big Time Toymaker manager drafted an agreement before Chou took initiative; therefore, based on the manager’s initiative resulting in labeling the e-mail with Strat Deal, insertion of key terms, a distribution agreement with prices, times, and various obligations proved mutual assent ( Melvin, 2011). Even without the formal word contract, the e-mail set the tone for an agreement. No matter what e-mail is a valid source of communication; therefore, the impact of the choice of communication remains relevant because the transfer of communications constituted...
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