Genuine Issues of Material Fact Prevent Summary Judgment That There Was No Contract

Lamle v. Mattel, Inc., 04-1151 (Fed. Cir. 2005). The Federal Circuit reversed summary judgment in favor of Mattel that there was no contract between Mattel and Lamle. The Federal Circuit said that to prove the contract Lamle must prove that the parties objectively intended to be immediately bound by an oral contract, that an email from Mattel contained all of the material terms of the oral contract to satisfy the Statute of Frauds, and that the sender had authority to bind Mattel. The Federal Circuit found that Lamle had presented sufficient evidence to create genuine issues of material fact on these points. In dissent, Judge Newman pointed out that Lamle had twice signed agreements with Mattel that stated that no obligation was assumed by Mattel "until a formal written contract is entered into, and then the obligation shall be only that which is expressed in the formal, written contract." Judge Newman argued that when the parties agree that their relationship shall take a certain form, that form is binding, and thus the undisputed absence of a "formal written contract" was fatal. Judge Newman also noted that an email that the majority said might be a writing memorandum of the agreement satisfying the Statute of Frauds, expressly stated that it "was subject to contract" indicating that it was not evidence that a final agreement had been reached.
COMMENT: This case is another example of the difficulties that businesses encounter when negotiating with individuals over intellectual property rights. Even an express statement that no obligations were created and no terms were enforceable unless there was a formal written agreement did not protect Mattel. The Federal Circuit may have given Mr. Lamle his day in court, but they may have made businesses even more reluctant to negotiate with individuals.