South-Western Legal Studies in Business

Email Describing Terms of Agreement Can Satisfy Statute of Frauds
Description Appeals court held that oral discussions that were summarized in an email could satisfy the statute of frauds requirement that key terms of an agreement must be in writing to be enforceable. If plaintiff can show at trial that such was the case, then there was an enforceable contract.
Topic Contracts
Key Words Agreement; Writing; Statute of Frauds; Email
C A S E   S U M M A R Y
Facts Lamle owned a game, Farook. Mattel was interested in distribution rights. They signed an agreement that Mattel had exclusive rights to negotiate with Lamle from March 18 until June 15 for $25,000, but there was no distribution contract unless it was in writing. On June 11 the parties reached an agreement. Mattel asked Lamle to draft a formal contract to memorialize 'The Deal.' On June 26, Mattel employee Bucher sent Lamle an email entitled "Farook Deal" that repeated the key terms of the June 11 meeting. It stated that the terms had been agreed to and ended "Best regards Mike Bucher." August 13, Mattel sent Lamle a fax saying it was "waiting for a draft licensing agreement." Lamle sent it on August 19. Mattel then decided it was not interested and told Lamle so in October. He sued for breach of contract. The district court dismissed the suit. Lamle appealed.
Decision

Vacated in part and remanded. Whether a contract is formed depends on the mutual assent of the parties as determined by the objective expressions of the parties. There is a question of fact here whether or not the parties entered into a contract. The initial written agreement may have been replaced by a later oral agreement, if they mutually intended. If that was the case, then the issue is if the parties reached a new written agreement for distribution rights. Under the statute of frauds, there must be a writing that contains the material terms of the agreement. The email sent by Bucher is a valid writing and signature that satisfies California's statute of frauds. The question to be determined at trial is if there was a binding oral agreement that was memorialized sufficiently in the email sent by Bucher.

Citation Lamle v. Mattel, Inc., 394 F.3d 1355 (Fed. Cir., 2005)

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