Star Wars Toys and Consideration

In 1977, George Lucas granted Kenner Toys the exclusive right to produce Star Wars toys—the action figures and other replicas from the movie—in perpetuity for $100,000 per year. At the time the contract was negotiated, no one understood how valuable the contract rights were.
In 1991, Hasbro Toys purchased Kenner. By this time, the sales of Princess Leia dolls and R2D2 replicas were nonexistent. Because there was no market for the toys, the toys were no longer produced, and an accountant with Kenner decided to save the $100,000 and not send the check to Mr. Lucas.
In 1992, an employee of Mr. Lucas saw a line of Galoob toys at a trade show and asked if Galoob was interested in making theStar Wars toy line. Galoob jumped at the chance and did quite well marketing the toys. Some executives believe that the popularity of the toys motivated Mr. Lucas to rerelease the movies, which turned out to be a moneymaker for Mr. Lucas as well as for the Galoob toy line.
In 1996, Mr. Lucas did grant some rights to Hasbro, but it has lost market share and footing to Galoob.
Was the failure to make the payment a failure of consideration? Has Hasbro lost its rights? How ethical was it for George Lucas to partner with Galoob to produce his toys?

Answer preview for Star Wars Toys and Consideration

APA

312 Words