Kim V. Son Case Study free essay sample

Kim v. Son To summarize the case of Kim v. Son, Jinsoo Kim invested in two of Stephen Son’s corporations, which eventually failed, and Kim lost his money. Son felt bad, he and Kim got together and became very intoxicated and signed a â€Å"contract† in blood, stating that Son promised to pay Kim the money he lost and Kim agreed not to sue him. As it turned out, when Son sobered up he refused to keep his promise to pay Kim, so Kim filed a lawsuit based on this bloody contract. The judge declared the contract void due to lack of consideration (Beatty, Samuelson, Bredeson, 2013). We will write a custom essay sample on Kim V. Son Case Study or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Was there valid consideration? First, let’s look at what consideration means. To qualify as consideration, three rules apply: 1) Both parties must receive something of value; 2) If someone makes a promise to give something of value, this signifies a consideration; and 3) The two parties involved must come to an agreement of terms in regard to what items of value are exchanged in the deal (Beatty, Samuelson, Bredeson, 2013). Based on these rules, I agree with the judge that there was no consideration in this case. Kim did make a promise not to sue, but this forbearance did not carry any merit because there was no way Kim would have won the lawsuit. This makes it a one sided proposal because only one party would receive something of value, and that would be Kim. Son would receive nothing of value in return, therefore, no consideration exists. Kim made an investment in a corporation that failed. Son is not liable for his loss. If this was the case, investors would be suing everyone anytime they lost money. Investments carry risks that are often times unforeseeable. If Kim knew that Son’s corporations would fail, he obviously wouldn’t have invested his money. But this does not place the blame on Son nor make him accountable for Kim’s loss. If investing worked this way there would be no risk and you could sue a company every time their stock went down. Common law consists of principles established by judges that encompass all the decisions made by courts over hundreds of years and countless lawsuits (Beatty, Samuelson, Bredeson, 2013). These laws are based on common sense, and â€Å"set a precedent for all courts to follow in similar cases, and are recognized, affirmed, and enforced by subsequent court decisions, thus continually expanding the common law† (businessdictionary. com, 2013). The Uniform Commercial Code (UCC), in contrast, falls under civil law, â€Å"which is based on a rigid code of rules† (businessdictionary. com, 2013). It was established to create a uniform set of laws for business transactions, since common law can vary from state to state (Beatty, Samuelson, Bredeson, 2013). As far as contracts are concerned, Article 2 of the UCC is of most significance. This part of the code deals with the sale of goods. Goods are defined in terms of contracts as anything that is moveable, other than money, investment securities and certain legal rights (Beatty, Samuelson, Bredeson, 2013). Common law, on the other hand, is used for contracts involving the sale of services or anything else other than goods (Beatty, Samuelson, Bredeson, 2013). In the case of Kim v. Son, I believe common law is the applicable source of law. The idea of consideration in regard to contract law is a result of common law principles. The UCC would not apply because there were no goods involved, only money. Furthermore, since the judge ruled that there was no valid contract to begin with, due to the absence of consideration, there were no goods, services, or anything else involved. References Beatty, J. , Samuelson, S. , Bredeson, D. (2013). Introduction to Business Law. (4th  ed. ). Mason, OH: South-Western, Cengage Learning. Businessdictionary. com, (2013). Common Law, Retrieved from: http://www. businessdictionary. com/definition/common-law. html