Because our business law class meets only once per week, we are combining Lessons 3 & 4 into a single lecture. As it happens, both business law lessons have something important in common: contracts. In the film “The Social Network” (the movie version of our assigned book “Accidental Billionaires”), after the Winklevoss twins (pictured below) introduce themselves to fellow classmate Mark Zuckerberg and pitch him their idea for a social network website, Mark tells them “I’m in” without hesitation, and then, in the very next scene(!), we see Mark and his best friend Eduardo Saverin negotiate an informal partnership agreement with the purpose of launching a new rival website (which Mark would eventually christen “thefacebook”). Assuming the veracity of the movie version of these critical events, here is the key question for today’s class: are either of these oral agreements legally binding?
Postscript: In preparation for today’s class (Feb. 1st), we have asked our students to write up a sample contract or “agreement in principle” between Zuckerberg and the Winklevoss twins before coming to class. Our goal in creating this assignment (and in making it due before today’s contracts class), is to put our students in the same position that Mark Zuckerberg, Eduardo Saverin, and the Winklevoss twins found themselves in the fall of 2003.