Introduction
The following case study provides an analysis of central idea of consideration and when the contract is enforceable because the agreement lacks consideration. In addition, discussion of multiple sources of law such as common law and the Uniform Commercial Code will summarize the difference between those sources and help to determine which one is applicable in the reviewed case study. Case Study
As a recap of the facts, Jinsoo Kim invested about $170,000 into two companies part-owned and operated by Stephen Son who was not personally liable for the debts of the companies because of their corporate status. The companies eventually went out of business causing Kim to lose his investment. This fact made Son feel guilty who signed a contract in blood in Kim’s presence stating that all debts would be repaid back to Kim in exchange for Kim’s agreement not to sue Son for the money owed. At a later time, Son refused to pay Kim back and Kim sued Son to enforce the contract. The outcome of the lawsuit was that the contract was not endorsable because there had been no consideration (Beatty, Samuelson & Bredeson, 2008).
To determine a presence of consideration, we need to remember that “contracts must be a two-way street” (Beatty, Samuelson & Bredeson, 2008, p. 163). Therefore, we need to review the following three rules of consideration: 1) Both parties must gain something valuable from the contract; 2) there should be a promise to give something valuable; 3) both parties must come up with arrangement of what one party is exchanging with another party (Beatty, Samuelson & Bredeson, 2008).
Taking above rules into consideration, I concur with the judge that the contract lacks consideration in this case and therefore it is not enforceable. My reasoning behind it is: 1) since Son was not responsible for the companies’ debts in the first place, Kim’s promise not