Techcrunch looks like it made an offer to work with someone to build a device, and Fusion looks like it accepted in some capacity by announcing they were working with them, tentatively branding it the Crunchpad, etc.
After that, the question is - did Techcrunch provide "consideration" to Fusion? That is, did they work to fulfill the agreement the two companies had?
Here, it looks pretty clear that TC did provide some consideration. Courts will look at what was agreed, and whether the parties provided that. Techcrunch might be exaggerating their role in the project, but they did clearly bring some consideration to the table - they put time, effort, money into the project because they believed they had a deal. Fusion accepted this consideration.
Importantly, consideration doesn't look at abstract value. It looks at whether you delivered on the contract. This is important, here's Wik on the subject:
"Consideration must be "sufficient" (i.e., recognizable by the law), but need not be "adequate" (i.e., the consideration need not be a fair and reasonable exchange for the benefit of the promise). For instance, agreeing to buy a car for a penny may constitute a binding contract."
The car for a penny example is extreme, and it might not be a binding contract, but it might too - there's been some famous cases of pranksters getting sued. But the key is, even if what TC provided wasn't important, if Fusion agreed to partner/pay royalties/give them a percent/something in exchange for what TC brought to the table, then they had a deal and TC delivered on their end of it.
Also from Wik -
"Contrary to common wisdom, an exchange of promises can still be binding and legally as valid as a written contract."
A clear, well written contract goes a long way. In absence of one, though, if you can still show there was an offer, acceptance, and consideration, then you've got a contract. I'm still going through the lawsuit reading, I'll come back when I see what TC is asking for because that's an interesting detail.
Edit: On page 10 of the lawsuit. TC is saying they paid vendors and paid Fusion's debts. That'd be pretty clear consideration if true. Still reading.
Edit2: Alright, page 21 has what TC is asking for. They're asking for all profits from sale of the product to be put into a trust and that Fusion is permanently forbidden from selling or distributing the Joojoo product, and must destroy it. Earlier in the suit they mentioned TC and Fusion are now permanently competitors, which implied TC is going to build their own pad. It'll be interesting to see if they have their own set of IP and specs to do that, or if it's just bluffing for leverage.
Yes oral contracts can be enforceable, but (i) there are limits to the types of oral contracts that are enforceable (see statute of frauds) and (ii) even for an oral contract the parties have to show that both sides clearly intended to be bound by a contract (there are some exceptions to this, but they do not apply here).
From what I read it seems that neither party treated the relationship as if they are bound by a contract. On the contrary it seemed like they proceeded under the assumption that they will negotiate some type of a deal in the future, but currently did not want to bind themselves.
Always? I don't know anything about US law, but German law doesn't require contracts to be written by default. If you buy something the contract between you and the shop owner doesn't have to be written down. You don't even have to say anything, just show what you want to buy and hand over the money. Unpolite but legal. There are requirements for certain kinds of contracts, but not for all of them.
> A "statute of frauds" requires that certain contracts be in writing, and that they be signed by all parties to be bound by the contract.
Contracts under statute of frauds include land sales and transfers, guaranteeing another person's debts, and contracts that can't be completed in a year.
It can be hard to prove an oral contract, but if you can prove it has all the elements of a contract, it's a contract, legal, and enforceable at least under the standard United States common law.
Some contracts, though, fall under what's called the "statute of frauds" - that means they must be written to become contracts.
From the link you provide, it explains that the statue of frauds makes a contract voidable (either party can break it) but it's still a contract.
Also: 'Sometimes, a party to a contract that would otherwise be invalid under a "statute of frauds" will nonetheless be able to enforce it, on the basis of "partial performance" or "promissory estoppel".'
Seems TechCrunch can reasonably claim partial performance.
This is a misconception - a contract does not need to be written to be enforceable. A contract consists of an "offer" and "acceptance"
http://en.wikipedia.org/wiki/Contract#Offer_and_acceptance
Techcrunch looks like it made an offer to work with someone to build a device, and Fusion looks like it accepted in some capacity by announcing they were working with them, tentatively branding it the Crunchpad, etc.
After that, the question is - did Techcrunch provide "consideration" to Fusion? That is, did they work to fulfill the agreement the two companies had?
Here, it looks pretty clear that TC did provide some consideration. Courts will look at what was agreed, and whether the parties provided that. Techcrunch might be exaggerating their role in the project, but they did clearly bring some consideration to the table - they put time, effort, money into the project because they believed they had a deal. Fusion accepted this consideration.
Importantly, consideration doesn't look at abstract value. It looks at whether you delivered on the contract. This is important, here's Wik on the subject:
"Consideration must be "sufficient" (i.e., recognizable by the law), but need not be "adequate" (i.e., the consideration need not be a fair and reasonable exchange for the benefit of the promise). For instance, agreeing to buy a car for a penny may constitute a binding contract."
The car for a penny example is extreme, and it might not be a binding contract, but it might too - there's been some famous cases of pranksters getting sued. But the key is, even if what TC provided wasn't important, if Fusion agreed to partner/pay royalties/give them a percent/something in exchange for what TC brought to the table, then they had a deal and TC delivered on their end of it.
Also from Wik -
"Contrary to common wisdom, an exchange of promises can still be binding and legally as valid as a written contract."
A clear, well written contract goes a long way. In absence of one, though, if you can still show there was an offer, acceptance, and consideration, then you've got a contract. I'm still going through the lawsuit reading, I'll come back when I see what TC is asking for because that's an interesting detail.
Edit: On page 10 of the lawsuit. TC is saying they paid vendors and paid Fusion's debts. That'd be pretty clear consideration if true. Still reading.
Edit2: Alright, page 21 has what TC is asking for. They're asking for all profits from sale of the product to be put into a trust and that Fusion is permanently forbidden from selling or distributing the Joojoo product, and must destroy it. Earlier in the suit they mentioned TC and Fusion are now permanently competitors, which implied TC is going to build their own pad. It'll be interesting to see if they have their own set of IP and specs to do that, or if it's just bluffing for leverage.