Read the “You Be The Judge” section of the chapter ( Kim v. Son ). If you were t
ID: 398766 • Letter: R
Question
Read the “You Be The Judge” section of the chapter (Kim v. Son). If you were the judge, how would you rule? Why? Explain.
Kim v. Son
2009 Cal. App. LEXIS 2011, 2009 WL 597232 Court of Appeal of California, 2009
Facts
Stephen Son was a part owner and operator of two corporations. Because the businesses were corporations, Son was not personally liable for the debts of either one.
Jinsoo Kim invested a total of about $170,000 in the companies. Eventually, both of them failed, and Kim lost his investment. Son felt guilty over Kim’s losses.
Later, Son and Kim met in a sushi restaurant and drank heroic quantities of alcohol. At one point, Son pricked his finger with a safety pin and wrote the following in his own blood: “Sir, please forgive me. Because of my deeds, you have suffered financially. I will repay you to the best of my ability.” In return, Kim agreed not to sue him for the money owed.
Son later refused to honor the bloody document and pay Kim the money. Kim filed suit to enforce their contract.
The judge determined that the promise did not create a contract because there had been no consideration.
You Be the Judge
Was there consideration?
Argument for Kim
As a part of the deal made at the sushi restaurant, Kim agreed not to sue Son. What could be more of a forbearance than that? Kim had a right to sue at any time, and he gave the right up. Even if Kim was unlikely to win, Son would still prefer not to be sued.
Besides, the fact that Son signed the agreement in blood indicates how seriously he took the obligation to repay his loyal investor. At a minimum, Son eased his guilty conscience by making the agreement, and surely that is worth something.
Argument for Son
Who among you has not at one point or another become intoxicated, experienced emotions more powerful than usual, and regretted them the next morning? Whether calling an ex-girlfriend and professing endless love or writing out an agreement in your own blood, it is all the same.
A promise not to file a meritless lawsuit has no value at all. It did not matter to Son whether or not Kim filed suit because Kim could not possibly win. If this promise counts as value, then the concept of consideration is meaningless because anyone can promise not to sue anytime. Son had no obligation to pay Kim. And the bloody napkin does not change that fact because it was made without consideration of any kind. It is an ordinary promise, not a contract that creates any legal obligation.
Explanation / Answer
In this case, there was no consideration as Kim and Son did not make a contract, it was only a promise. Being a judge, I cannot ask Son to repay the money as there is no contract. The case file by Kim is baseless. A blooded handkerchief cannot be considered a contract. It needs to be legal. From Kim point of view when he has invested in the corporations and he incurred the loss, he can definitely sue Son for his money but not based on the handkerchief or promise made by Son. It should be based on the investor investing in a corporation which comes under Corporate Laws.
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