CrunchPad Federal Lawsuit Filed; Some Additional Thoughts

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.

Plaintiffs

INTERSERVE, INC. dba TECHCRUNCH, a Delaware Corporation, and CRUNCHPAD, INC., a Delaware Corp.

Seems like they are incorporated

as in "i wanted to grow organically; he wanted a big marketing push: it ended in a total crunchpad". or "someone didn't tighten the nuts; front driverside wheel came off on a mountain road: complete crunchpad". or "flock of birds triggered a false alarm; first strike; automated response: crunchpad".

it happened with cuil, i'm sensing the same promise here....