You are on page 1of 38

 

$UWLFOH
&DXVH&RQVLGHUDWLRQ 3URPLVVRU\ (VWRSSHO DQG
3URPLVHV8QGHU 'HHG:KDWRXU6WXGHQWV
6KRXOG .QRZDERXW(QIRUFHPHQWRI3URPLVHVLQ
$+LVWRULFDO DQG,QWHUQDWLRQDO &RQWH[W
Charles Calleros
$EVWUDFW

7KH FRPPRQ ODZ WKHRU\ RI SURPLVVRU\ HVWRSSHO RIIHUV D


SRVVLEOH DYHQXHIRUFORVLQJ WKHJDSEHWZHHQ WKHFLYLO ODZ
FRQFHSW RI FDXVH DQG WKH FRPPRQ ODZ GRFWULQH RI
FRQVLGHUDWLRQ7KHFLYLOODZFRQFHSWRIFDXVHVXSSRUWVWKH
HQIRUFHPHQWRIJUDWXLWRXVSURPLVHVRUSURPLVHVIRUZKLFK
WKHUH LV QR FRQVLGHUDWLRQ 7KH FRPPRQ ODZ GRFWULQH RI
FRQVLGHUDWLRQ E\ GHILQLWLRQ GRHV QRW VXSSRUW WKH
HQIRUFHPHQWRI VXFKSURPLVHV 6WXGHQWV RI8QLWHG6WDWHV
FRQWUDFWODZKRZHYHUPD\EHVXUSULVHGWROHDUQWKDW±LQ
FRQWUDVWWRSURPLVVRU\HVWRSSHODVDQDIILUPDWLYHFDXVHRI
DFWLRQ LQ WKH 8QLWHG 6WDWHV ± (QJOLVK FRPPRQ ODZ
UHFRJQL]HVSURPLVVRU\HVWRSSHORQO\DVDGHIHQVLYHVKLHOG
H[FHSW LQ WKH OLPLWHG FRQWH[W RI SURPLVHV UHODWLQJ WR
RZQHUVKLSRIODQG

)XUWKHU LQTXLU\ LQWR WKH HQIRUFHPHQW RI SURPLVHV XQGHU


FRPPRQ ODZ UHYHDOVD VHFRQGVXUSULVH WRVWXGHQWV LQ WKH
8QLWHG6WDWHVZKHUHWKHOHJDOHIIHFWRIVHDOHGLQVWUXPHQWV
KDV ODUJHO\ EHHQ DEDQGRQHG  (QJOLVK FRPPRQ ODZ KDV
QHYHUDEDQGRQHGLWVPRGHUQHTXLYDOHQWRIWKHHDUO\DFWLRQ
                                                                                                                                 
&KDUOHV&DOOHURVLVD3URIHVVRURI/DZ6DQGUD'D\2¶&RQQRU&ROOHJHRI/DZDW$UL]RQD6WDWH
8QLYHUVLW\7 KHDXWKRUWKDQNVWKHIROORZLQJIRUWKHLUUHVHDUFKDVVLVWDQFH/DZOLEUDULDQV%HWK'LIHOLFH
:'DYLG*D\&DUULH+HQWHOHII7DUD0RVSDQDQG6HUHQH5RFNDQGODZVWXGHQWV-DPLH*ODVVHU(ULQ
0DXSLQ%UDQGRQ1DJ\DQG1DWDO\D7HU-*ULJRU\DQ7KHDXWKRUHVSHFLDOO\WKDQNV$QGUHZ7HWWHQERUQ
3URIHVVRURI&RPPHUFLDO/DZDW6ZDQVHD8QLYHUVLW\IRUKLVJXLGDQFHRQ(QJOLVKODZWKRXJKDQ\
GHILFLHQFLHVRQWKDWWRSLFDUHVROHO\WKHUHVSRQVLELOLW\RIWKHDXWKRU7KDQNVDOVRWR7KRPDV/XQGPDUN
3URIHVVRUDWWKH8QLYHUVLW\RI0QVWHUIRUKLVHDUO\LQVSLUDWLRQRQWKLVWRSLF
84 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

RIFRYHQDQWZKLFKSURYLGHVIRUHQIRUFHPHQWRIDSURPLVH
HYHQ LI JUDWXLWRXV LI VWDWHG LQ DQ DXWKHQWLFDWHG ZULWLQJ
7KXV D JUDWXLWRXV SURPLVH XQGHU GHHG D SURPLVH LQ D
VLJQHG ZLWQHVVHG DQG GHOLYHUHG ZULWLQJ  LV IXOO\
HQIRUFHDEOH LQ (QJODQG DUJXDEO\ EULQJLQJ (QJOLVK
FRPPRQODZFORVHUWRWKHHQIRUFHPHQWUXOHVRIWKH)UHQFK
&LYLO&RGHWKDQWRWKHFRPPRQODZRIWKH8QLWHG6WDWHV

%\ LQFOXGLQJ VXFKFRPSDULVRQV LQ RXUFRQWUDFWV FRXUVHV


VWXGHQWV FDQ DSSUHFLDWH WKH QRQ-LQHYLWDELOLW\ RI WKHSDWKV
WDNHQ LQ WKHFRPPRQ ODZ $W WKHVDPH WLPHVWXGHQWV FDQ
DSSUHFLDWH WKHGHJUHH WR ZKLFK WKHFRPPRQ ODZDQG FLYLO
ODZ ERWK UHFRJQL]H WKH QHHG WR HQIRUFH SURPLVHV RXWVLGH
WKH FRQWH[W RI DQ H[FKDQJH DOWKRXJK WKH\ KDYH WDNHQ
VOLJKWO\GLIIHUHQWURDGVWRUHDFKWKDWGHVWLQDWLRQ

7DEOHRI&RQWHQWV
Introduction .........................................................................................86
I. Common Law and Civil Law Legal Methodology ...........................87
II. Cause, Consideration, and Reciprocal Inducement...........................90
A. The French Code Civil¶V5HTXLUHPHQWRI&DXVH ..........................91
B. The Common Law Requirement of Consideration .......................92
1. A Brief History......................................................................93
2. Consideration in Modern U.S. Contract Law ...........................95
III. Promissory Estoppel as Shield and Sword ................................. 101
A. Protecting Reliance on Promises as well as Representations of Facts
.............................................................................................. 101
1. Promissory Estoppel in the United States .............................. 102
2. English Estoppel for Reliance on a Promise........................... 104
B. Promissory Estoppel as a Sword, as Well as a Shield ................. 105
1. Estoppel as a Shield in England ............................................ 105
2. Estoppel as a Sword in the United States ............................... 108
No. 2 Cause Consideration Prom issory Estoppel 85

C. Explaining the Divergence Between Promissory Estoppel in


England and the U.S. ...................................................................... 111
1. Sword and Shield More Fully Defined .................................. 111
2. Is the Divergence Narrowed Through Recognition of an Implied
Exchange? .................................................................................. 112
3. Filling the Gap: English Recognition of Promises Under Deed
115
Conclusion......................................................................................... 118
 

 
86 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

&DXVH&RQVLGHUDWLRQ 3URPLVVRU\ (VWRSSHO DQG


3URPLVHV8QGHU 'HHG:KDW RXU6WXGHQWV
6KRXOG .QRZDERXW(QIRUFHPHQWRI3URPLVHVLQ
$+LVWRULFDO DQG,QWHUQDWLRQDO &RQWH[W

Charles Calleros
,QWURGXFWLRQ

Every legal system restricts the class of promises that merit legal
enforcement. Most legal systems will readily enforce a promise that the
promisor had consensually exchanged for another promise. Legal tradi-
tions differ, however, in the extent to which they will enforce a gratuitous
promise ± a promise to make a gift. Compared to the civil law concept of
cause , the common law requirement of consideration is fairly restrictive. A
charitable motivation can provide the cause , or reason, for a promise to
make a gift; however, the consideration requirement excludes such gratui-
tous promises.
7KHFRPPRQODZFRXUWVKDYHIRXQGWKHFRQVLGHUDWLRQGRFWULQHWREH
RYHUO\ UHVWULFWLYH LQ FDVHV LQ ZKLFK D SDUW\ IRUHVHHDEO\ DQG GHWULPHQWDOO\
UHOLHV RQ D JUDWXLWRXV SURPLVH  +RZHYHU UDWKHU WKDQ UHSODFLQJ WKH
FRQVLGHUDWLRQGRFWULQHZLWKWKHPRUHH[SDQVLYH FRQFHSWRIFDXVHFRPPRQ
ODZ FRXUWV LQ (QJODQG DQG WKH 8QLWHG 6WDWHV DGDSWHG ZHOO-HVWDEOLVKHG
HVWRSSHO SULQFLSOHV WR FUHDWH D QHZ VSHFLHV ³SURPLVVRU\ HVWRSSHO´ WR
DGGUHVVLQMXVWLFHV UHVXOWLQJ IURPUHOLDQFHRQDJUDWXLWRXVSURPLVH
'HVSLWH WKLV VLPLODU RULJLQ WKH GRFWULQH RI SURPLVVRU\ HVWRSSHO
HYROYHG GLIIHUHQWO\ RQ HDFKVLGH RI WKH $WODQWLF  ,Q (QJODQG SURPLVVRU\
HVWRSSHO KDV ODUJHO\ UHPDLQHG WUXH WR LWV URRWV OLPLWHG LQ PRVW FDVHV WR
VKLHOGLQJ WKH UHO\LQJ SDUW\ IURP D FODLP ZLHOGHG E\ WKH SURPLVRU  ,Q
FRQWUDVW PRVW MXULVGLFWLRQV LQ WKH 8QLWHG 6WDWHV KDYH UHDGLO\ SHUPLWWHG
SURPLVVRU\HVWRSSHOWRDFWDVD³VZRUG´SURYLGLQJWKHUHO\LQJSDUW\ZLWKDQ
DIILUPDWLYHFODLPIRUGDPDJHVDJDLQVWWKHSURPLVRU 
(PSOR\HGDVDVZRUGSURPLVVRU\HVWRSSHOFDQDFWDVDVXEVWLWXWHIRU
FRQVLGHUDWLRQSURYLGLQJDQDOWHUQDWLYHJURXQGIRUHQIRUFLQJDSURPLVHDQG
WKXV SURWHFWLQJ WKH SURPLVHH¶V H[SHFWDWLRQ LQWHUHVW  0RUHRYHU DV WKH
GRFWULQH KDV IXOO\ HYROYHG LQ WKH 8QLWHG 6WDWHV SURPLVVRU\ HVWRSSHO KDV
JDLQHGDIOH[LELOLW\WKDW LQFUHDVHVWKHUDQJHRILWVRSHUDWLRQ)RUH[DPSOH
WKH GRFWULQH SHUPLWV UHFRYHU\ RI UHOLDQFHFRVWVHYHQ LI WKH SURPLVH LV WRR
No. 2 Cause Consideration Prom issory Estoppel 87

LQGHILQLWH WR HQIRUFH RU LI WKH UHOLDQFH RU LQMXVWLFH LV LQVXIILFLHQWO\
VXEVWDQWLDOWRMXVWLI\ IXOO HQIRUFHPHQWRIWKHSURPLVH
7KLV VWDWH RI DIIDLUV UDLVHV D QXPEHU RI TXHVWLRQV  :LWK LWV PRUH
UREXVW SURPLVVRU\ HVWRSSHO UHPHG\ LV WKH 8QLWHG 6WDWHV FORVHU WKDQ
(QJODQG WR WKH FLYLO ODZ¶V OLEHUDO HQIRUFHPHQW RI SURPLVHV LQFOXGLQJ
JUDWXLWRXVSURPLVHV"2UGRHV(QJOLVKFRPPRQODZHPSOR\RWKHUPHDQVWR
OLEHUDOO\ HQIRUFH SURPLVHV WKXV GHFUHDVLQJ WKH QHHG IRU D VXSSOHPHQWDU\
UHPHG\LQSURPLVVRU\HVWRSSHO"
7KHDQVZHUVPD\EHVXUSULVLQJWR ODZVWXGHQWVLQWKH8QLWHG6WDWHV
ZKHUH WKH HIIHFW RI VHDOHG LQVWUXPHQWV KDV ODUJHO\ EHHQ DEROLVKHG  ,Q
FRQWUDVW(QJOLVKODZKDVUHWDLQHGWKHPRGHUQHTXLYDOHQWWRWKHHDUO\DFWLRQ
RI FRYHQDQW ZKLFK SURYLGHV IRU WKH HQIRUFHPHQW RI D SURPLVH HYHQ LI
JUDWXLWRXV LI VWDWHG LQ DQ DXWKHQWLFDWHG ZULWLQJ  7KXV E\ VXSSOHPHQWLQJ
WKH GRFWULQH RI EDUJDLQHG-IRU-H[FKDQJH ZLWK WKH IRUPDOLW\ RI D ZULWWHQ
ZLWQHVVHG GHHG (QJOLVK FRXUWV SUHVXPDEO\ KDYH IDFHG OHVV SUHVVXUH WR
EURDGO\UHFRJQL]HSURPLVVRU\ HVWRSSHODVDQDIILUPDWLYHFDXVHRIDFWLRQ
7KLVDUWLFOHH[SORUHVWKHVHLVVXHVLQKLVWRULFDOFRQWH[WSDXVLQJDORQJ
WKH ZD\ WR DQDO\]H D IHZ ³FKHVWQXW´$PHULFDQ FDVHV WKDWDUH SRSXODU LQ
&RQWUDFWV FRXUVHV LQ WKH 8QLWHG 6WDWHV  7KH DUWLFOH¶V SULPDU\ JRDO LV WR
H[SDQG WKH VFRSH RI WKH LQTXLU\ WR ZKLFK ILUVW-\HDU VWXGHQWVDUH W\SLFDOO\
H[SRVHG%\EULHIO\H[SORULQJWKHKLVWRU\RIWKHFRQVLGHUDWLRQGRFWULQHDQG
FRPSDULQJFRQVLGHUDWLRQWRWKHFLYLO ODZFRQFHSWRIFDXVHODZVWXGHQWVLQ
WKH 8QLWHG 6WDWHV FDQDSSUHFLDWH WKH QRQ-LQHYLWDELOLW\ RI WKHFRPPRQ ODZ
DSSURDFK
(YHQ PRUHH\H-RSHQLQJ KRZHYHU LV WKH GLYHUJHQFH LQ WKH FRPPRQ
ODZ RQ HQIRUFHPHQW RI SURPLVHV LQ WKH 8QLWHG 6WDWHV DQG (QJODQG  %\
UHDGLQJ DW OHDVW VXPPDULHV RI WKH (QJOLVK ³FKHVWQXW´ FDVHV RQ HVWRSSHO
VWXGHQWVFDQEHWWHUDSSUHFLDWHWKHGLVWLQFWLYH$PHULFDQVWDPSSODFHGRQWKH
FRPPRQ ODZ6WXGHQWVPD\HYHQUHDFKWKHVXUSULVLQJFRQFOXVLRQWKDWWKH
(QJOLVKDSSURDFKWRHQIRUFHPHQWRISURPLVHVPD\EHFORVHUWRWKHFLYLOODZ
FRQFHSW RI FDXVH WKDQ WR WKH FRPELQHG FRPPRQ ODZ DSSURDFK RI
FRQVLGHUDWLRQ DQGSURPLVVRU\HVWRSSHOLQWKH8QLWHG6WDWHV

, &RPPRQ/DZDQG&LYLO/DZ/HJDO0HWKRGRORJ\

7KLV DUWLFOH YLHZV SURPLVVRU\ HVWRSSHO DV D UHPHG\ WKDW EULQJV


FRPPRQ ODZ HQIRUFHPHQW RI SURPLVHV LQ WKH 8QLWHG 6WDWHV FORVHU WR WKH
PRUH H[SDQVLYH FLYLO ODZ FRQFHSW RI FDXVH  $OWKRXJK LW XOWLPDWHO\
FRPSDUHV86DQG(QJOLVKDSSURDFKHVWRHQIRUFHPHQWWKLVDUWLFOHXVHVWKH
FLYLO ODZ FRQFHSW RI FDXVHDV DQ H[WHUQDO EHQFKPDUN IRU WKDWFRPSDULVRQ

 
88 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

7KHUHIRUHDEULHIUHYLHZRIFRPPRQ ODZDQGFLYLO ODZOHJDOPHWKRGZLOO


VHUYHDVDUHPLQGHURIWKHOHJDOFRQWH[WVIURPZKLFKWKHGRFWULQHVVSULQJ
&RPSDUDWLYH OHJDOPHWKRGRORJ\LQWKH86DQG)UDQFHLVVXFKDQ
LQWULJXLQJWRSLFEHFDXVHWKHFLYLOODZDQGFRPPRQODZV\VWHPVKDYHEHJXQ
WR FRQYHUJH WR D PRGHVW H[WHQW ZKLOH VWLOO UHIOHFWLQJ GLIIHUHQFHV WKDWDUH
HQJDJLQJ WR H[SORUH  7KH FRQYHUJHQFH FRPHV IURP ERWK VLGHV RI WKH
$WODQWLF  7KH IHGHUDO DQG VWDWH JRYHUQPHQWV LQ WKH 8QLWHG 6WDWHV KDYH
YDVWO\ H[SDQGHG WKH UROH RI VWDWXWRU\ DQGDGPLQLVWUDWLYH ODZ RYHU WKH ODVW
FHQWXU\ WKXV WDNLQJ VXEVWDQWLDO VWULGHV WRZDUG WKH GRPLQDQW UROH RI
OHJLVODWLRQ WKDW W\SLILHV FLYLO ODZ FRGH V\VWHPV 1  )RU WKHLU SDUW )UHQFK
MXGJHV DQG DFDGHPLFV ZLOO FRQFHGH ± DW OHDVW XQRIILFLDOO\ ± WKDW )UHQFK
FRXUWV QHFHVVDULO\ FUHDWH ODZ RU OHJDO QRUPV ZKHQ WKH\ DSSO\ WKH YHU\
JHQHUDO SURYLVLRQV RI WKH )UHQFK &LYLO &RGH WR SDUWLFXODU FDVHV 2 SDUWO\
PLUURULQJ WKH ODZPDNLQJ IXQFWLRQ RI FRPPRQ ODZ FRXUWV 3  0RUHRYHU
DOWKRXJK )UDQFH GRHV QRW HPEUDFH D IRUPDO GRFWULQH RI VWDUH GHFLVLV4 
FRXUWV DQG OLWLJDQWV ZKLOH UHFRJQL]LQJ WKDW WKH\ DUH QRW ERXQG WR I ROORZ
SUHFHGHQWRIWHQFKRRVHWRIROORZRUUHIHUWRSUHYLRXVGHFLVLRQVRIWKH&RXU
GH FDVVDWLRQ5  7KLV SUDFWLFH LV SDUWLFXODUO\ DSSDUHQW ZKHQ WKH &RXU GH
FDVVDWLRQ KDV UHFRQILUPHG D SULQFLSOH WKURXJK D VHULHV RI FRQVLVWHQW
GHFLVLRQV6
1RQHWKHOHVV GLIIHUHQFHV EHWZHHQ WKH V\VWHPV UHPDLQ VXEVWDQWLDO
-XGLFLDOO\-FUHDWHGFRPPRQ ODZIRUH[DPSOHUHPDLQVDVXEVWDQWLDOSDUWRI
WKHDSSOLFDEOHODZLQWKH8QLWHG6WDWHV SDUWLFXODUO\ LQVWDWHV¶ODZVRIFLYLO
REOLJDWLRQV  (YHQ VWDWHFRGH V\VWHPV WKDW ODUJHO\ RFFXS\ ZKROH ILHOGV RI
ODZ OHDYH URRP IRU FRPPRQ ODZ WR ILOO JDSV  7KH 8QLIRUP &RPPHUFLDO
&RGH FRQWDLQV DQ H[SOLFLW SURYLVLRQ WR WKLV HIIHFW LQ FRPPHUFLDO
WUDQVDFWLRQV SUHVHUYLQJ WKH DSSOLFDWLRQ RI FRPPRQ ODZ SULQFLSOHV WR WKH
                                                                                                                                 
1
6HHHJ6WDQOH\0RVN7KH&RPPRQ/DZDQGWKH-XGLFLDO'HFLVLRQ- 0DNLQJ3URFHVV+$59-/
3 8%32/ ¶<  
2
-2+13'$:6217+(25$&/(62)7+(/$:- *UHHQZRRG3UHVV    WUDFLQJ
WKHGHEDWHDERXWWKHOHJDOIRUFHRI)UHQFKMXULVSUXGHQFH 0,7&+(//$66(5-8',&,$/'(/,%(5$7,21 
$&203$5$7,9($1$/<6,62)-8',&,$/75$163$5(1&<$1'/(*,7,0$&< -  8*20$77(,
&203$5$7,9(/$:$1'(&2120,&6  (9$67(,1(5)5(1&+/(*$/0(7+2'  
0LWFKHO/DVVHU-XGLFLDO 6HOI- 3RUWUDLWV-XGLFLDO'LVFRXUVHLQWKH)UHQFK/HJDO6\VWHP<$/(
/--   GLVFXVVLQJPRGHUQWKHRU\WKDW)UHQFKMXGLFLDOGHFLVLRQVFUHDWH³OHJDO
QRUPV´HYHQLIWKH\GRQRWDPRXQWWRDQRIILFLDOVRXUFHRIODZ 
3
6HHHJ&+$5/(65&$//(526/(*$/0(7+2'$1': 5,7,1*--- WKHG 
4
67(,1(5VXSUDQRWHDW-%XWVHHLGDW DUJXLQJWKDWSV\FKRORJLFDODQGVRFLRORJLFDO
IDFWRUVPD\UHVXOWLQJUHDWHUSUHVVXUHVWRIROORZ)UHQFKMXGLFLDOGHFLVLRQVWKDQGRHVWKHPRUHIRUPDO
(QJOLVKV\VWHPRIVWDUHGHFLVLV 
5
67(,1(5VXSUDQRWHDW-/DVVHU3RUWUDLWVVXSUDQRWHDW-
6
'$:621VXSUDQRWHDW67(,1(5VXSUDQRWHDW± GLVFXVVLQJWKHFRQFHSWRI
³ MXULVSUXGHQFHFRQVWDQWHZKHUHE\DSDUWLFXODULQWHUSUHWDWLRQRUSULQFLSOHLVUHSHDWHGLQDVHULHVRI
GHFLVLRQV´ 
No. 2 Cause Consideration Prom issory Estoppel 89

H[WHQWWKDWWKHVWDWXWRU\ODZRIWKH&RGHGRHVQRWGLVSODFHWKHP7 ,QRWKHU
FDVHV86FRXUWVKDYHLPSRUWHGVXEVWDQWLDOERGLHVRIFRPPRQ ODZLQWRD
VWDWXWRU\ VFKHPH ZLWK OLWWOH RU QR H[SOLFLW OHJLVODWLYH GLUHFWLRQ 8  7KXV
FRPPRQ ODZ UXOHV LQ WKH 8QLWHG 6WDWHV FRQVWLWXWH WKH EXON RI WKH ODZ LQ
VRPH ILHOGV DQG WKHVH UXOHVVWDQG UHDG\ WR ILOO JDSV LQ VWDWXWRU\ VFKHPHV
HYHQLQFRGHV\VWHPVGHVLJQHGWRDGGUHVVDILHOGRIODZLQDIDLUO\WKRURXJK
PDQQHU
7KLV V\VWHP VWDQGV LQ FRQWUDVW WR WKH )UHQFK OHJDO V\VWHP LQ ZKLFK
WKH &RGH &LYLO ZDV FRQFHLYHG WR SURYLGH V\VWHPDWLF DQG FRPSUHKHQVLYH
FRYHUDJH9  5DWKHU WKDQ ILOOLQJ JDSV ZLWK D EDFNGURS RI FRPPRQ ODZ WKH
FLYLO ODZ HPSOR\V D SURFHVV RI ³DPSOLI\LQJ LQGXFWLRQ´ WKURXJK ZKLFK
LQGLYLGXDODUWLFOHVRIWKHFRGHDUHWDNHQWRUHIOHFW³DZLGHUOHJLVODWLYHLQWHQW
ZKLFK FDQ EH DSSOLHG RXWVLGH WKH DUHD FRYHUHG E\ WKH LQGLYLGXDO
HQDFWPHQWV´ 10
0RUHRYHUWKHFRPPRQ ODZGRFWULQHRI VWDUHGHFLVLVUHTXLUHVFRXUWV
LQ WKH 8QLWHG 6WDWHV WRDFFRUG ERWK D IRUPDO DQG DVXEVWDQWLYH UHVSHFW WR
SUHFHGHQWWKDWJRHVZHOOEH\RQGDQ\LQIRUPDOFRQVLGHUDWLRQRISUHFHGHQWLQ
)UDQFH)RUH[DPSOHDFRXUWLQWKH8QLWHG6WDWHVPXVWIROORZWKHVWDQGLQJ
SUHFHGHQWRIDFRXUWWKDWVLWVDERYHLWDQGWKDWUHYLHZVLWVGHFLVLRQV 11 $V
VWDWHGE\WKH866XSUHPH&RXUWZKHQGHWHUPLQLQJZKHWKHUWRDGKHUHWR
LWV UXOLQJ LQ D SUHYLRXV FDVH ³>W@KH &RXUW RI $SSHDOV ZDV FRUUHFW LQ
DSSO\LQJWKDWSULQFLSOHGHVSLWH LWVGLVDJUHHPHQWZLWK $OEUHFKWIRULWLVWKLV
&RXUW¶VSUHURJDWLYHDORQHWRRYHUUXOHRQHRILWVSUHFHGHQWV´ 12
$OWKRXJK DQ\ DSSHOODWH FRXUW FDQ RYHUUXOH LWV RZQ SUHFHGHQW WKDW
FRXUWZLOOGRVRRQO\IRUYHU\JRRGFDXVHDQGRQO\DIWHURIIHULQJDGHWDLOHG
H[SODQDWLRQ IRU LWV FKDQJH LQ FRXUVH  7KH 86 6XSUHPH &RXUW IRU
                                                                                                                                 
7
8&&†- E   
8
6HHHJ&LW\RI1HZSRUWY)DFW&RQFHUWV,QF86  6WDWH2LO&RY.KDQ
86-   IHGHUDODQWL-WUXVWVWDWXWHLQYRNHVDFRPPRQODZWHUPDQGUHIOHFWVFRQJUHVVLRQDO
H[SHFWDWLRQWKDWFRXUWVZRXOGLQWHUSUHWWKHVWDWXWHWKURXJKWKHOHQVRIFRPPRQODZWUDGLWLRQV 
9
6HH'$:621VXSUDQRWHDW- H[SODLQLQJWKHWKFHQWXU\H[HJHWLFDOVFKRRORIWKRXJKWZKLFK
DGYDQFHGWKHYLHZWKDWWKH&RGH&LYLOLVFRPSUHKHQVLYHDQGWKHOHJLVODWXUHLVWKHVROH-ODZPDNLQJ
DXWKRULW\ 67(,1(5VXSUDQRWHDW-
10
)5('(5,&.&+$5/(69216$9,*1<2)7+(92&$7,212)285$*()25/(*,6/$7,21$1'
-85,63 58'(1&( - $EUDKDP+D\ZDUGWUDQVO7KH/HJDO&ODVVLFV/LEUDU\  ³,QHYHU\WULDQJOH
WKHUHDUHFHUWDLQGDWDIURPWKHUHODWLRQVRIZKLFKDOOWKHUHVWDUHQHFHVVDULO\GHGXFLEOHWKXVJLYHQ
WZRVLGHVDQGWKHLQFOXGHGDQJOHWKHZKROHWULDQJOHLVJLYHQ,QOLNHPDQQHUHYHU\SDUWRIRXUODZKDV
SRLQWVE\ZKLFKWKHUHVWPD\EHJLYHQWKHVHPD\EHWHUPHGWKHOHDGLQJD[LRPV´ %XWVHH%$55<
1,&+2/$67+()5(1&+/$:2)&2175$&7 GHG  VWDWLQJWKDWWKH*HUPDQVFKRODU6DYLJQ\
GRXEWHGWKDWDFRGHFRXOGFRPSUHKHQVLYHO\DQWLFLSDWH³HYHU\FDVHWKDWPD\DULVH´EHFDXVH³WKHUHDUH
SRVLWLYHO\QROLPLWVWRWKHYDULHWLHVRIDFWXDOFRPELQDWLRQVRIFLUFXPVWDQFHV´ 
11
6HHHJ&$//(526/(*$/0(7+2'VXSUDQRWHDW-
12
.KDQ86DW
 
90 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

H[DPSOHKDVVWDWHGWKDWLWPD\RYHUUXOHRQHRILWVSUHYLRXVGHFLVLRQVLIWKDW
GHFLVLRQDSSHDUVQRZWREHVRFOHDUO\HUURQHRXVDVWRGHI\HQIRUFHPHQWLI
WKH GHFLVLRQ KDV SURYHG WR EH XQZRUNDEOH DV D SUDFWLFDO PDWWHU RU LI WKH
GHFLVLRQKDVEHHQXQGHUPLQHGE\VXEVHTXHQWFKDQJHVLQUHODWHGSULQFLSOHV
RIODZRU LQUHOHYDQWIDFWV RURXUXQGHUVWDQGLQJRIIDFWV  7KHVHIDFWRUV
KRZHYHU PXVW EH ZHLJKHG DJDLQVW WKH YDOXHV RI FRQVLVWHQF\ DQG
SUHGLFWDELOLW\ LQFOXGLQJWKHH[WHQWWRZKLFKWKHSRSXODFHKDVFRPHWRUHO\
RQWKHSUHFHGHQW13
6WDUHGHFLVLV RSHUDWHV ZLWK VSHFLDO IRUFHZKHQDSSOLHG WR SUHFHGHQW
LQWHUSUHWLQJVWDWXWHVEHFDXVHWKHOHJLVODWXUHFDQHDVLO\FRUUHFWDQ\HUURULQ
WKHFRXUW¶VLQWHUSUHWDWLRQ 14 &RQYHUVHO\VWDUHGHFLVLVDSSOLHVPRUHIOH[LEO\
LQ WKH 6XSUHPH &RXUW¶V LQWHUSUHWDWLRQ RI WKH 86 &RQVWLWXWLRQ15 EHFDXVH
WKH 86 &RQVWLWXWLRQ LV QRW HDVLO\ DPHQGHG WR FRUUHFW DQ RXWGDWHG RU
RWKHUZLVH SUREOHPDWLF SUHFHGHQW 16  1RQHWKHOHVV HYHQ LQ FRQVWLWXWLRQDO
LQWHUSUHWDWLRQVWDUHGHFLVLV³GHPDQGVVSHFLDOMXVWLILFDWLRQ´IRURYHUWXUQLQJ
SUHFHGHQW17 $JDLQVWWKLVEDFNJURXQGRIOHJDOPHWKRGZHFDQFRPSDUHWKH
VXEVWDQFH RI WKH )UHQFK GRFWULQH RI FDXVHZLWK LWV FRXQWHUSDUW LQ $QJOR-
$PHULFDQFRPPRQODZFRQVLGHUDWLRQ

,, &DXVH&RQVLGHUDWLRQDQG5HFLSURFDO,QGXFHPHQW

7KHUHTXLUHPHQWRIFRQVLGHUDWLRQUHSUHVHQWVWKHFRPPRQ ODZV\VWHP
LQ WZR VHQVHV  )LUVW FRPPRQ ODZ V\VWHPV UHTXLUH FRQVLGHUDWLRQ LQ WKH
IRUPDWLRQ RI FRQWUDFWV DV FRQWUDVWHG ZLWK FLYLO ODZ V\VWHPV  6HFRQG
FRQVLGHUDWLRQ LV DOPRVW HQWLUHO\ D SURGXFW RI MXGLFLDO FUHDWLRQ DQG
GHYHORSPHQWXQOLNHWKHHQDFWHGODZWKDWVSULQJVIURPVWDWXWHVUHJXODWLRQV
DQGFRQVWLWXWLRQDO SURYLVLRQV 
7R EH VXUH DEVHQFH RI FRQVLGHUDWLRQ LV VHOGRP UDLVHG LQ OLWLJDWLRQ
EHFDXVH WKH GRFWULQH LV VR URXWLQHO\ VDWLVILHG LQ WKH NLQGV RI FRPPHUFLDO
WUDQVDFWLRQVWKDWPDNHXSWKHEXONRIOLWLJDWHGFDVHV6WLOOFRQVLGHUDWLRQLV
DIXQGDPHQWDOHOHPHQWRIFRQWUDFWIRUPDWLRQ LQWKHFRPPRQ ODZV\VWHP18 
DQG LW FRQWUDVWV LQ DQ LQWHUHVWLQJ ZD\ ZLWK WKH GRFWULQH RI FDXVH LQ WKH
)UHQFK&LYLO &RGH
                                                                                                                                 
13
3ODQQHG3DUHQWKRRGRI6H3DY&DVH\86-  VHHDOVR3D\QHY7HQQHVVHH
86  
14
6HHHJ3HDUVRQY&DOODKDQ86  
15
6HHHJ3D\QH86DW6HPLQROH7ULEHRI)ODY)ORULGD86  
16
6HH86&2167DUW9
17
$UL]RQDY5XPVH\86  VHHDOVR&LWL]HQV8QLWHGY)HG(OHFWLRQ&RPP¶Q
86   SDVVLRQDWHO\GHEDWLQJZKHWKHUWKH&RXUWKDGVXIILFLHQWMXVWLILFDWLRQIRURYHUUXOLQJ
SUHFHGHQW 
18
6HHHJ5(67$7(0(17 6(&21' 2)&2175$&76†  
No. 2 Cause Consideration Prom issory Estoppel 91

%RWK FDXVH DQG FRQVLGHUDWLRQ UHIOHFW D UHOXFWDQFH WR HQIRUFH DOO


SURPLVHV DQG DQ DWWHPSW WR UDWLRQDOO\ GHILQH ZKLFK SURPLVHV GHVHUYH WKH
DWWHQWLRQ RI WKH HQIRUFHPHQW PDFKLQHU\ RI WKH FRXUWV19  ,Q GUDZLQJ WKDW
OLQH KRZHYHUWKHGRFWULQHVGLIIHULQWKHLUWUHDWPHQWRIJUDWXLWRXV SURPLVHV

$ 7KH)UHQFK&RGH&LYLO¶V5HTXLUHPHQWRI&DXVH 20

$UWLFOH  RI WKH )UHQFK &RGH &LYLO SURYLGHV WKDW FRQWUDFW
IRUPDWLRQUHTXLUHVWKHIRXUHOHPHQWVRIFRQVHQWFDSDFLW\DQREMHFWIRUPLQJ
WKHVXEMHFWPDWWHUDQGDODZIXOFDXVH21  7KHIRXUWKUHTXLUHPHQWRI FDXVH
RULJLQDWHGLQ5RPDQWH[WVEXWZDVSULQFLSDOO\GHULYHGIURPWKHFRQFHSWRI
FDXVDGHYHORSHGLQ&DQRQODZ 22
,Q VRPH ZD\V WKH )UHQFK FRQFHSW RI FDXVH DSSHDUV WR EH PRUH
GHPDQGLQJWKDQWKHFRPPRQODZFRQFHSWRIFRQVLGHUDWLRQ +RZHYHUWKLV
LV RQO\ EHFDXVH FDXVH DFWV DV D YHVVHO IRU VHYHUDO UHVWULFWLRQV RQ
HQIRUFHDELOLW\WKDWDUHDGGUHVVHGDVVHSDUDWHGRFWULQHVLQWKHFRPPRQ ODZ
)RUH[DPSOH$UWLFOH¶VH[SUHVVUHTXLUHPHQWWKDWWKH FDXVHEH³OLFLWH´
FRXSOHG ZLWK D FRPSDQLRQ SURYLVLRQ¶V GHILQLWLRQ RI ³LOOLFLWH´ RU LOOLFLW23 
GHPRQVWUDWHVDFLYLO ODZOLPLWDWLRQRQFRQWUDFWIRUPDWLRQWKDWFRUUHVSRQGV
URXJKO\ WR FRPPRQ ODZ GHIHQVHV WR HQIRUFHPHQW EDVHG RQ D YLRODWLRQ RI
ODZ RU SXEOLF SROLF\ 24  7KHHOHPHQW RI FDXVH KDV DOVR EHHQ LQWHUSUHWHG WR

                                                                                                                                 
19
($//$1)$516:257+&2175$&76†DW WKHG VHH-+%$.(5$1,1752'8&7,21
72( 1*/,6+/ (*$/+,6725< WKHG ($//$1)$516:257+ &2175$&76†DW WK
HG  ³1ROHJDOV\VWHPKDVHYHUEHHQUHFNOHVVHQRXJKWRPDNHDOOSURPLVHVHQIRUFHDEOH´ 2/,9(5
: (1'(//+2/0(6-57+(&20021/$: 'RYHUHG'RYHU3XEO 1,&+2/$6VXSUDQRWH
DW UHIHUULQJWRWKHUHFRJQLWLRQLQ)UDQFHWKDW³WKHUHPXVWEHVRPHOLPLW´WRWKHSULQFLSOHWKDW
³DJUHHPHQWVVKRXOGEHREVHUYHG´ 
20
7 KLVVHFWLRQLVDGDSWHGIURPDSDVVDJHIURPDQHDUOLHUDUWLFOH&KDUOHV5&DOOHURV,QWURGXFLQJ&LYLO
/DZ6WXGHQWVWR&RPPRQ/DZ/HJDO0HWKRG7KURXJK6HOHFWHG,VVXHVLQ&RQWUDFW/DZ-/(*$/
('8&-  
21
&2'(&,9,/>&&,9@DUW )U &&,9DUW -RKQ+&UDEEWUDQVUHYHG5RWKPDQ 
>KHUHLQDIWHU&UDEEWUDQV@ UHIHUULQJWR³FRQVHQWFDSDFLW\>D@QREMHFWFHUWDLQZKLFKIRUPVWKH
VXEMHFW-PDWWHURIWKHHQJDJHPHQW>D@OLFLWFDXVD´ 
22
1,&+2/$6VXSUDQRWHDWVHHDOVR&UDEEWUDQV*ORVVDU\DW- HTXDWLQJµFDXVH¶ZLWK
µFDXVD¶DQGGHILQLQJµFDXVH¶DV³DQHOHPHQWHVVHQWLDOWRWKHHQIRUFHDELOLW\RIDFRQWUDFWFRQVLVWLQJRIDQ
DGHTXDWHO\VHULRXVµFDXVH¶RUUHDVRQIRUDSHUVRQWRKDYHREOLJDWHGKLPVHOIFRQWUDFWXDOO\´ 
23
&&,9DUW )U &UDEEWUDQVVXSUDQRWHDUWVHH1LFKRODVVXSUDQRWHDW-
24
6HHHJ+DGQRWY%D\/WG)G Q WK&LU  DUELWUDWLRQDJUHHPHQW VEDU
RQSXQLWLYHGDPDJHVLQDGLVFULPLQDWLRQFDVHZDVXQHQIRUFHDEOHEHFDXVHLWYLRODWHGLPSRUWDQWUHPHGLDO
WHUPVDQGSROLFLHVRID86HPSOR\PHQWGLVFULPLQDWLRQVWDWXWH %RYDUGY$P+RUVH(QWHUSULVHV,QF
&DO$SSG&DO5SWU   GHQ\LQJHQIRUFHPHQWRIDJUHHPHQWWRSXUFKDVH
EXVLQHVVWKDWPDQXIDFWXUHGLWHPVWKDWZHUHQRWWKHPVHOYHVLOOHJDOEXWZKLFKIDFLOLWDWHGLOOHJDOGUXJXVH
DQGZKLFKWKHUHIRUHYLRODWHGSROLFLHVXQGHUO\LQJ&DOLIRUQLDGUXJODZV 
 
92 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

HQFRPSDVVOLPLWDWLRQVRQYDOLGLW\WKDWFRUUHVSRQGURXJKO\WRFRPPRQ ODZ
GHIHQVHVEDVHGRQPLVWDNHRIIDFWRUWKHRSSRVLQJ SDUW\¶VPDWHULDOEUHDFK 25
,QIDFWWKH)UHQFKUHTXLUHPHQWRIFDXVHLVOHVVUHVWULFWLYHRQFRQWUDFW
IRUPDWLRQ WKDQ WKH FRPPRQ ODZ UHTXLUHPHQW RI FRQVLGHUDWLRQ  )RU
H[DPSOH XQOLNH WKHFRQVLGHUDWLRQ GRFWULQH ZKLFK UHTXLUHV DQ H[FKDQJH26 
WKH )UHQFK &LYLO &RGH VSHFLILFDOO\ UHFRJQL]HV JUDWXLWRXV FRQWUDFWV 27 
$GGLWLRQDOO\ WKH )UHQFK &LYLO &RGH DOVR UHFRJQL]HV FRQWUDFWV WKDW
FRQWHPSODWH DQ H[FKDQJH 28 LI H[HFXWHG ZLWK IRUPDOLWLHV VXFK DV
QRWDUL]DWLRQ 29 RU KDQGZULWWHQ WHUPV DV UHTXLUHG IRU VRPH JUDWXLWRXV
FRQWUDFWV30 0RUHRYHULIWKH)UHQFKFRQFHSWRI FDXVHUHIHUVWRD³UHDVRQ´
IRU HQWHULQJ LQWR DFRQWUDFWXDO REOLJDWLRQ 31 WKH UHTXLUHG UHDVRQFDQ EH WKH
³SURPLVRU¶V LQWHQWLRQ OLEpUDOH LH KLV LQWHQWLRQ WR FRQIHU D JUDWXLWRXV
EHQHILWRQWKHSURPLVHH´ 32
7KLV UHODWLYHO\ H[SDQVLYH FRQFHSW RI FDXVH UHIOHFWV WKH 1DSROHRQLF
&RGH &LYLO¶V UHVSHFW IRU WKH DXWRQRP\ RI WKH SDUWLHV33 DQG LWV HPEUDFH RI
SDFWD VXQW VHUYDQGD ³WKH PRUDO SULQFLSOH WKDW FRQWUDFWV VKRXOG EH
REVHUYHG´34  ,Q FRQWUDVW WKHFRPPRQ ODZ FRQFHSW RI FRQVLGHUDWLRQ JUHZ
JUDGXDOO\RXWRIDPHGLHYDOV\VWHPRIFRPPRQODZZULWVWKDWEHJDQZLWKD
GHFLGHGO\ UHVWULFWLYHYLHZRIHQIRUFHDEOHREOLJDWLRQV

% 7KH&RPPRQ/DZ5HTXLUHPHQWRI&RQVLGHUDWLRQ

                                                                                                                                 
25
6HH1,&+2/$6VXSUDQRWHDW±± UHIHUULQJWRFDVHVRIWKH&RXUGH&DVVDWLRQILQGLQJ
DEVHQFHRIFDXVHZKHQXQNQRZQWRRQHRUERWKSDUWLHVWKHVXEMHFWPDWWHURIDFRQWUDFWRUDFHQWUDO
UHDVRQIRUFRQWUDFWLQJKDGFHDVHGWRH[LVWDWWKHWLPHRIFRQWUDFWLQJRUZKHQRQHSDUW\VHHNVWRH[FXVH
KLVSHUIRUPDQFHEHFDXVHWKHRWKHUSDUW\KDVIDLOHGWRSHUIRUP FI5(67$7(0(17 6(&21' 2)
&2175$&76††±   FRQWUDFWYRLGDEOHIRUPXWXDODQGXQLODWHUDOPLVWDNH 5(67$7(0(17
6(&21' 2)&2175$&76††± GLVFKDUJHRIUHPDLQLQJREOLJDWLRQVIRUWKHRWKHUSDUW\¶VPDWHULDO
EUHDFK 
26
6HH5(67$7(0(17 6(&21' 2)&2175$&76†  
27
&&,9DUW )U &UDEEWUDQVVXSUDQRWHDWDUW >$FRQWUDFW@³LVXQLODWHUDOZKHQRQH
RUPRUHSHUVRQVDUHREOLJDW HGWRZDUGRQHRUPRUHRWKHUVZLWKRXWWKHUHEHLQJDQHQJDJHPHQWRQWKHSDUW
RIWKHODWWHU´ &&,9DUW )U &UDEEWUDQVVXSUDQRWHDWDUW ³$FKDULWDEOHFRQWUDFWLV
RQHLQZKLFKRQHRIWKHSDUWLHVSURFXUHVIRUWKHRWKHUDSXUHO\JUDWXLWRXVDGYDQWDJH´ 
28
6HH&&,9DUW )U &UDEEWUDQVVXSUDQRWHDWDUWVHHDOVR&&,9DUW )U 
&UDEEWUDQVVXSUDQRWHDWDUW
29
6HHHJ&&,9DUW )U &UDEEWUDQVVXSUDQRWHDWDUW&&,9DUW )U &UDEE
WUDQVVXSUDQRWHDWDUW
30
&&,9DUW )U &UDEEWUDQVVXSUDQRWHDWDUW
31
&UDEEWUDQVVXSUDQRWH*ORVVDU\DW1,&+2/$6VXSUDQRWHDW ³FDXVH´LQWHUSUHWHG
DV³PRWLYDWLQJUHDVRQRUSXUSRVH´ 
32
1,&+2/$6VXSUDQRWHDW, 1752'8&7,2172)5(1&+/$: *HRUJH$%HUPDQQ 
(WLHQQH3LFDUGHGV 
33
&&,9DUW )U &UDEEWUDQVVXSUDQRWHDWDUWVHHDOVR'(1,60$=($8' /$
127,21'(&/$86(3e1$/(†DW   UHIHUULQJWRWKHSULQFLSOHRIO¶DXWRQRPLHGHODYRORQWp
DXWRQRP\RIWKHZLOO DIXQGDPHQWDOFRQFHSWRI)UHQFKFRQWUDFWODZ 
34
1LFKRODVVXSUDQRWHDW
No. 2 Cause Consideration Prom issory Estoppel 93

 $%ULHI +LVWRU\

D (DUO\)RUPVRI$FWLRQ'HEWDQG&RYHQDQW

%HJLQQLQJ ZLWK WKH UHLJQ RI .LQJ +HQU\ ,, ±  HDUO\ FLYLO
DFWLRQVLQWKHFHQWUDOUR\DOFRXUWVLQ(QJODQGZHUHOLPLWHGWRFODLPVWKDWILW
ZLWKLQ UHFRJQL]HG IRUPV RI DFWLRQ IRU ZKLFK WKH &URZQ ZRXOG LVVXH D
ZULW35  2QH RI WKH HDUOLHVW RI WKHVH ZULWV ZDV GHEW-GHWLQXH ZKLFK LQ WKH
HDUO\ WKLUWHHQWK FHQWXU\ VSOLW LQWR WZR VHSDUDWH DFWLRQV  DQ DFWLRQ IRU
GHWLQXHWRUHFRYHUSHUVRQDOSURSHUW\RU LWVYDOXHDQG DQDFWLRQIRUGHEWWR
UHFRYHUDVXPRZHGIRUWKHGHOLYHU\ RIVRPHWKLQJ RIYDOXH 36
$OWKRXJK D IRUHUXQQHU RI FRQWUDFW ODZ WKH DFWLRQ IRU GHEW ZDV QRW
RQHIRUEUHDFKRISURPLVHUDWKHU LWDOOHJHGWKDWWKHGHIHQGDQWZURQJIXOO\
ZLWKKHOG SD\PHQW RZHG IRU VRPHWKLQJ YDOXDEOH WKDW KDG DOUHDG\ EHHQ
GHOLYHUHGWRWKHGHIHQGDQW 37  7KLVYHU\IHDWXUHKRZHYHUVRZHGWKHVHHGV
RI WKHFRQVLGHUDWLRQ GRFWULQH EHFDXVH GHEW UHTXLUHG D TXLG SURTXR LQ WKH
IRUPRIWKHSULRUGHOLYHU\RISURSHUW\RUVHUYLFHVWRVXSSRUWWKHGHPDQGIRU
SD\PHQW38
$ SODLQWLII FRXOG PRUH GLUHFWO\ HQIRUFH D SURPLVH E\ EULQJLQJ DQ
DFWLRQIRUEUHDFKRIFRYHQDQWZLWKRXWWKHQHFHVVLW\RIVKRZLQJD TXLGSUR
TXR 39  %\ WKH IRXUWHHQWK FHQWXU\ KRZHYHU WKLV ZULW DSSOLHG RQO\ WR
SURPLVHVVHWIRUWKLQDZULWWHQLQVWUXPHQW DQGIRUPDOL]HG ZLWKDVHDO 40
7KHUHIRUH WKH DFWLRQ RQ FRYHQDQW FRXOG QRW EH XVHG IRU LQIRUPDO
WUDQVDFWLRQV  0RUHRYHU WKH DFWLRQ IRU GHEW SURYHG XQSRSXODU ZLWK
                                                                                                                                 
35
6HHHJ):0$,7/$1'(48,7<$/62 7+()25062)$&7,21$7&20021/$:7:2&2856(6
2)/ (&785(6- $+&KD\WRUDQG:-:KLWWDNHUHGV&DPEULGJH8QLY3UHVV   
+2/0(6VXSUDQRWHDW-
36
0$,7/$1' VXSUDQRWHDW
37
%$.(5VXSUDQRWHDW-+2/0(6VXSUDQRWHDW'-,%%(7621$+,6725,&$/
, 1752'8&7,21727+(/$:2)2%/,*$7,216  EXWFI%$.(5VXSUDQRWHDW \HWGHEW
UHIHUUHGWRDFRQWLQXLQJGXW\UDWKHUWKDWWKHNLQGRISDVWVSHQWZURQJIXODFWQRUPDOO\DVVRFLDWHGZLWK
WRUW 
38
6HH, %%(7621VXSUDQRWH+2/0(6VXSUDQRWHDW-$:%6,03 621$
+,6725<2)7+(&20021/$:2)&2175$&7 &ODUHQGRQ3UHVV 
39
6HHHJ+2/0(6VXSUDQRWHDW ³FRQVLGHUDWLRQZDVQHYHUUHTXLUHGIRUFRQWUDFWVXQGHU
VHDO´ FI$57+85/,1721&25%,1&25%,121&2175$&76†DW- :HVW3XEO   
VHDOHGLQVWUXPHQWLVHQIRUFHDEOHZLWKRXWFRQVLGHUDWLRQEXWLILWLVSDUWRIDQH[FKDQJHIDLOXUHRIRWKHU
SDUW\WRSHUIRUPFDQH[FXVHSHUIRUPDQFHRIWKHSURPLVHXQGHUVHDOEHFDXVHLWPD\EHFRQGLWLRQHGRQ
WKHRWKHUSHUIRUPDQFH 
40
%$.(5VXSUDQRWHDW-VHHDOVR0$,7/$1'VXSUDQRWHDWLGDW
>S@URPLVHVDULVLQJRXWRIOHVVIRUPDODJUHHPHQWVDQGWUDQVDFWLRQVFRXOGVWLOOEHHQIRUFHGLQORFDO
FRXUWV &25%,1VXSUDQRWHDW-
 
94 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

SODLQWLIIV SDUWO\ EHFDXVH WKH GHIHQGDQW FRXOG DGRSW WKH DQFLHQW ZDJHU RI
ODZ  8QGHU WKLV SURFHGXUH WKH GHIHQGDQW FRXOG GHIHDW WKH DFWLRQ E\
SURGXFLQJ D VXIILFLHQW QXPEHU RI FRPSXUJDWRUV RU ³RDWK-KHOSHUV´ WKDW
ZHUHZLOOLQJWRVXSSRUWWKHGHIHQGDQW¶VVZRUQGHQLDOE\VZHDULQJWKHLURZQ
RDWKVLQVXSSRUWRIWKHGHIHQGDQW¶VFUHGLELOLW\ 41 $FFRUGLQJWR+ROPHVWKLV
SURFHGXUHPD\KDYHGHULYHGIURPDQFLHQW$QJOR-6D[RQSUDFWLFHVLQZKLFK
WUDQVDFWLRQZLWQHVVHVKHOSHGWRHVWDEOLVKWKDWDGHIHQGDQWKHOGSURSHUW\DV
WKHUHVXOWRIDVDOHUDWKHUWKDQWKHIW 42

E $VVXPSVLWDVD)RUPRI7UHVSDVVRQWKH&DVH

%HJLQQLQJ LQ WKH IRXUWHHQWK FHQWXU\ WKH (QJOLVK FRXUWV HPSOR\HG D


ZULWRIPRUHJHQHUDODSSOLFDWLRQWUHVSDVVRQWKHFDVHZKLFKDYRLGHGVRPH
RIWKHUHVWULFWLRQVRIGHEWDQGFRYHQDQW43 2QHIRUPRIDFWLRQRQWKHFDVH
DVVXPSVLW SURYLGHG D UHPHG\ ZKHQ WKH GHIHQGDQW FDXVHG GDPDJH WR WKH
SODLQWLII¶V SURSHUW\ ZKLOH ODZIXOO\ SRVVHVVLQJ WKH SURSHUW\ WKHUHIRUH QRW
FRPPLWWLQJ DVLPSOH WUHVSDVV DIWHU XQGHUWDNLQJ WR SURYLGH D VHUYLFH44  ,Q
GHFLGLQJ LQ 6ODGH¶V &DVH LQ  WKDW DQ DFWLRQ LQ DVVXPSVLW FRXOG EH
EURXJKWHYHQ LIGHEW PLJKWRWKHUZLVHDSSO\ WKH.LQJ¶V%HQFKFOHDUHGWKH
ZD\IRUDVVXPSVLWWRVXSSODQWGHEWDQGLWVRXWPRGHG ZDJHURIODZ 45

F $VVXPSVLW±$FWLYH+DUPRU)DLOXUHWR3HUIRUP

,QWKHHDUO\FDVHVDVVXPSVLWUHTXLUHGWKHGHIHQGDQWWR KDYHHQJDJHG
LQ DFWLYH PLVIHDVDQFH LQ WKH XQGHUWDNLQJ FDXVLQJ WKH SODLQWLII WR KDYH
VXIIHUHG D WDQJLEOH ORVV RU GHWULPHQW  7KHVH UHTXLUHPHQWV SURYLGHG D
IRUHUXQQHU WR PRGHUQ DFWLRQV LQ ERWK FRQWUDFWV DQG WRUW  ,Q WKH VHPLQDO
&DVHRIWKH+XPEHU)HUU\PDQLQWKHGHIHQGDQWDFWLYHO\FDXVHGWKH
ORVVRIWKHSODLQWLII¶VKRUVHE\RYHUORDGLQJDIHUU\DIWHUXQGHUWDNLQJWRFDUU\
WKH KRUVH DFURVV D ULYHU 46  ,Q DQRWKHU W\SLFDO FDVH OLDELOLW\ LQ DVVXPSVLW
                                                                                                                                 
41
0$,7/$1' VXSUDQRWHDW-6,03 621VXSUDQRWHDW-
42
+2/0(6VXSUDQRWHDW-
43
6,03 621 VXSUDQRWHDW-, %%(7621VXSUDQRWHDW-0$,7/$1' VXSUDQRWH
DW-+2/0(6VXSUDQRWHDW--VHHDOVR&+$5/(65(0%$57+(/$:2)7+(
/$1' 7+((92/87,212)285/(*$/6<67(0-   UHYLHZLQJGHEDWHDPRQJKLVWRULDQV
ZKHWKHUWKHJURZWKRIWUHVSDVVRQWKHFDVHRYHUVHYHUDOFHQWXULHVZDVIDFLOLWDWHGE\DVWDWXWHRI 
44
0$,7/$1' VXSUDQRWHDW-+2/0(6VXSUDQRWHDW-VHH6,03 621VXSUDQRWH
DW DOWKRXJKWKHKLVWRU\RIDVVXPSVLWEHJLQVLQWKHWKFHQWXU\³>L@WZDVQRWXQWLOWKHWK
FHQWXU\WKDWODZ\HUVEHJDQWRWUHDWDVVXPSVLWDVDQDFWLRQZLWKLWVRZQLGHQWLW\´ 
45
%$.(5/HJDO+LVWRU\VXSUDQRWHDW-0$,7/$1' VXSUDQRWHDW+2/0(6VXSUD
QRWHDW6,03 621 VXSUDQRWHDW-
46
7 KH&DVHRIWKH+XPEHU)HUU\PDQ %XNWRQY7RZQVHQG /LE$VV)SOVHHDOVR
6,03 621 VXSUDQRWHDW- DQDO\]LQJ%XNWRQY7RZQVHQG 
No. 2 Cause Consideration Prom issory Estoppel 95

DURVH ZKHQ WKH GHIHQGDQW DFWLYHO\ LQMXUHG WKH SODLQWLII¶V KRUVH E\
QHJOLJHQWO\ VKRHLQJWKHKRUVHDIWHUXQGHUWDNLQJWRVKRGLW47 
(YHQWXDOO\ KRZHYHU FRXUWV DSSOLHG DVVXPSVLW WR QRQIHDVDQFHDV LQ
WKHVLPSOHIDLOXUHWRSHUIRUPDQXQGHUWDNLQJ 48 DVORQJDVWKHSODLQWLIIKDG
VWLOO VXIIHUHG VRPH ORVV VXFK DV PDNLQJ SUHSD\PHQWV LQ UHOLDQFH RQ WKH
SURPLVH49 /LDELOLW\IRUQRQIHDVDQFHSURYLGHGDIRXQGDWLRQIRUWKHFRQFHSW
RIEUHDFKRISURPLVH 50 
,Q  /XF\ Y :DOZ\Q IXUWKHU SDYHG WKH URDG WR D WKHRU\ RI
FRQWUDFW  ,Q WKDW FDVH WKH FRXUWV EHJDQ LPSRVLQJ OLDELOLW\ IRU EUHDFK RI
SURPLVH LQ D IXOO\ H[HFXWRU\ FRQWUDFW DULVLQJ IURP XQSHUIRUPHG PXWXDO
SURPLVHV ZLWKRXW SUHYLRXVO\ GHOLYHUHG TXLGSUR TXR RU RWKHU GHWULPHQWDO
UHOLDQFH 51  7KLV VLJQLILFDQW GHYHORSPHQW FRXSOHG ZLWK WKH ERRVW WR
DVVXPSVLWLQ6ODGH¶V&DVHIRUW\-RQH\HDUVODWHUKHOSHGXVKHULQWKHPRGHUQ
ODZRIFRQWUDFWVDQGLWVFRQVLGHUDWLRQUHTXLUHPHQW 52 

 &RQVLGHUDWLRQ LQ0RGHUQ86&RQWUDFW/DZ

,Q PRVW MXULVGLFWLRQV LQ WKH 8QLWHG 6WDWHV QLQHWHHQWK DQG WZHQWLHWK
FHQWXU\ VWDWH OHJLVODWLRQ HYHQWXDOO\ DEROLVKHG RU HURGHG WKH OHJDO HIIHFW RI
UHFRUGLQJ D SURPLVH LQ D VHDOHG ZULWWHQ LQVWUXPHQW 53  2Q WKH RWKHU KDQG
WKHHOHPHQWRITXLGSURTXRDVVRFLDWHGZLWKWKHFRPPRQODZDFWLRQLQGHEW
DQG WKH HOHPHQW RI LQMXU\ RU GHWULPHQW DVVRFLDWHG ZLWK DVVXPSVLW
FRQWULEXWHG WR PRUH ODVWLQJ DQG VXEVWDQWLYH HOHPHQWV LQ WKH GHYHORSLQJ
UHTXLUHPHQWRIFRQVLGHUDWLRQ 54 

D &DXVHDQG&RQVLGHUDWLRQ

                                                                                                                                 
47
+2/0(6VXSUDQRWHDW-6,03 621VXSUDQRWHDW--
48
, %%(7621 VXSUDQRWHDW-0$,7/$1'VXSUDQRWHDW+2/0(6VXSUDQRWHDW

49
%$.(5VXSUDQRWHDW-
50
6HH+2/0(6VXSUDQRWHDW ³WKHDOOHJDWLRQRIDQXQGHUWDNLQJFRQYH\HGWKHLGHDRID
SURPLVH´ 
51
%$.(5VXSUDQRWHDW VXPPDUL]LQJWKHFDVHRI/XF\Y:DOZ\Q  % 0 
52
,G+2/0(6VXSUDQRWHDW-, %%(7621VXSUDQRWHDW
53
6HHHJ8&&†-  &25%,1 VXSUDQRWH†DW--26(3+03(5,//2 
&$/$0$5,$1'3(5,//221&2175$&76†DW- WKHG %XWVHH(ULF0LOOV+ROPHV
6WDWXUHDQG6WDWXVRID3URPLVH8QGHU6HDODVD/HJDO)RUPDOLW\: ,//$0(77(/5(9  
HPSKDVL]LQJWKDWPDQ\VWDWHVQRQHWKHOHVVVWLOOJLYHVRPHHIIHFWWRWKHIRUPDOLW\RIVHWWLQJIRUWKD
SURPLVHLQDZULWLQJRULQZULWLQJDQGXQGHUVHDOVXFKDVE\VKLIWLQJWKHEXUGHQRISURRIRQWKHLVVXHRI
FRQVLGHUDWLRQRUH[WHQGLQJWKHVWDWXWHRIOLPLWDWLRQV 
54
6HH'XQFDQ.HQQHG\)URPWKH:LOO7KHRU\WRWKH3ULQFLSOHRI3ULYDWH$XWRQRP\/RQ)XOOHU¶V
³&RQVLGHUDWLRQDQG)RUP´&2/80/5(9-  
 
96 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

,QWKHVL[WHHQWKFHQWXU\ IRUH[DPSOHWKHWHUPTXLGSURTXRIURPWKH
DFWLRQRIGHEWDQGWKH5RPDQWHUPFDXVDDVGHYHORSHGLQ&DQRQODZRIWHQ
FRPSHWHGZLWKWKHWHUP³FRQVLGHUDWLRQ´DVDZD\RIH[SUHVVLQJDUHTXLUHG
HOHPHQW WR HQIRUFH D SURPLVH LQ DQ DFWLRQ LQ DVVXPSVLW WR HQIRUFH D
SURPLVH 55  $V WKH WHUP ³FRQVLGHUDWLRQ´ SUHYDLOHG DQG LWV UHTXLUHPHQWV
HYROYHG FRQVLGHUDWLRQ GHSDUWHG IURP WKH UHODWLYHO\ H[SDQVLYH YLHZ RI
FDXVH LQ WKH )UHQFK &RGH &LYLO56  8QOLNH WKH &RGH &LYLO WKH PRGHUQ
FRQFHSWLRQ RI FRQVLGHUDWLRQ UHTXLUHV DQ H[FKDQJH DV LQ WKH H[FKDQJH RI
PXWXDOSURPLVHVRUWKHH[FKDQJHRIDSHUIRUPDQFHIRUDSURPLVH 57 
$FFRUGLQJO\ ZKHUHDV D FRQWUDFW XQGHU WKH )UHQFK &RGH &LYLO FDQ
HQFRPSDVVD VLQJOH REMHWZLWK D FKDULWDEOH PRWLYDWLRQ DV WKH FDXVH58 WKH
PRGHUQ FRPPRQ ODZ FRQVLGHUDWLRQ GRFWULQH HVVHQWLDOO\ UHSUHVHQWV DQ
H[HUFLVH LQ GLVWLQJXLVKLQJ HQIRUFHDEOH H[FKDQJHV IURP JHQHUDOO\
XQHQIRUFHDEOH JUDWXLWRXV SURPLVHV 59  $ SROLF\ MXVWLILFDWLRQ IUHTXHQWO\
RIIHUHG IRU WKLV GLVWLQFWLRQ LV WKH EHOLHI LQ FRPPRQ ODZ FRXQWULHV WKDW
H[FKDQJHV DUH PRUH OLNHO\ WKDQ JLIWV WR EHQHILW VRFLHW\ E\ FUHDWLQJ QHZ
ZHDOWKWKHUHE\PDNLQJH[FKDQJHVPRUHGHVHUYLQJRIWKHDWWHQWLRQRIFRXUWV
ZLWKOLPLWHG UHVRXUFHV 60
$VH[SORUHG ODWHULQWKLVDUWLFOH$PHULFDQFRPPRQ ODZZLOOHQIRUFH
D JUDWXLWRXV SURPLVH LI WKH SURPLVH VDWLVILHV WKH HTXLWDEOH GRFWULQH RI
SURPLVVRU\ HVWRSSHO 61  7KDW UHPHG\ KRZHYHU UHPDLQV GLVWLQFW IURP WKH
FRQFHSW RI FRQVLGHUDWLRQ DQG LV OLPLWHG WR FDVHV LQ ZKLFK DQ LQMXU\
GHWULPHQW RU RWKHU LQMXVWLFH UHVXOWV IURP IRUHVHHDEOH UHOLDQFH RQ D
SURPLVH 62  7KH FRQVLGHUDWLRQ GRFWULQH RQ WKH RWKHU KDQG LV VDWLVILHG
ZLWKRXW UHJDUG WR UHOLDQFH 63 RU HTXDOLW\ RI WKH H[FKDQJH64 VR ORQJ DV WKH
SURPLVHWREHHQIRUFHGZDVSDUWRIDUHFLSURFDOO\LQGXFHGH[FKDQJH 65 
                                                                                                                                 
55
, %%(7621 VXSUDQRWHDW+2/0(6VXSUDQRWHDW-+%$.(57+(/(*$/
3 52)(66,21$1'7+(&20021/$:- 7KH+DPEOHGRQ3UHVV 
56
6HH%$.(5VXSUDQRWHDW
57
6HHHJ5(67$7(0(17 6(&21' 2)&2175$&76†  
58
6XSUDQRWHVDQGDFFRPSDQ\LQJWH[W
59
6HHHJ.LUNVH\Y.LUNVH\$OD  %$.(5VXSUDQRWHDW DJUDWXLWRXVSURPLVH
WREXLOGDKRXVHLVRQO\D³ QXGXPSDFWXP´ 5REHUW$+LOOPDQ 0DXUHHQ$2¶5RXUNH5HWKLQNLQJ
&RQVLGHUDWLRQLQWKH(OHFWURQLF$JH+$67,1*6/-  VHHDOVR+2/0(6VXSUDQRWH

60
+LOOPDQ 2¶5RXUNHVXSUDQRWHDW- GHVFULELQJWKLVDVWKHPRVWFRQYLQFLQJRI
VHYHUDOMXVWLILFDWLRQVRIIHUHGE\FRQWUDFWVVFKRODU/RQ)XOOHU 
61
6HH5(67$7(0(17 6(&21' 2)&2175$&76†   QRWXVLQJWKHWHUP³SURPLVVRU\HVWRSSHO´ 
62
6HHHJ%LQNRZVNLY+DUWIRUG$FFLGHQWDQG,QGHP&R1<6G$'G
-  'LFN¶V/DVW5HVRUWRI:HVW(QG,QFY0DUNHW/RVV/WG6:G Q
7H[$SS 5(67$7(0(17 6(&21' 2)&2175$&76†  
63
6HH%$.(5VXSUDQRWHDW GHVFULELQJKLVWRULFUHFRJQLWLRQWKDWFRQWUDFWXDOOLDELOLW\FDQEH
EDVHGRQUHFLSURFDOH[HFXWRU\SURPLVHVDORQH 
64
,GDW5(67$7(0(17 6(&21' 2)&2175$&76†  EXWFI36$7,<$+7+(5,6($1'
)$//2))5(('202)&2175$&7- &ODUHQGRQ3UHVV  EHJLQQLQJDURXQGWKH&KDQFHU\
No. 2 Cause Consideration Prom issory Estoppel 97

2QHPLJKWVD\WKDWWKHFRPPRQ ODZFRQVLGHUDWLRQ GRFWULQHUHTXLUHV


DQDSSUR[LPDWLRQRIWKH&RGH&LYLO¶VREMHWRUVXEMHFWPDWWHURQHDFKVLGH
RI WKH WUDQVDFWLRQ  7KHFXUUHQW UHTXLUHPHQW WKDW HDFK SDUW\ WR D EDUJDLQ
PXVWDGGDSURPLVHRULPPHGLDWHSHUIRUPDQFHWRWKHH[FKDQJHVWHPVIURP
WKHGHWULPHQW-RU-LQMXU\UHTXLUHPHQWRIWKHQRZ-REVROHWHDVVXPSVLWDFWLRQ66 
8QGHUPRGHUQGRFWULQHWKHSHUIRUPDQFH±RUSURPLVHGSHUIRUPDQFH±QHHG
QRWYLVLWDWDQJLEOHORVVLQMXU\RUGHWULPHQWRQWKHSHUVRQSURYLGLQJLW 67 VR
ORQJDVWKHSHUIRUPDQFHFRQVLVWVRIDQDFWRUIRUEHDUDQFHWKDWWKHREOLJRULV
QRW DOUHDG\ OHJDOO\ REOLJDWHG WR SHUIRUP 68 DQG VR ORQJ DV D SURPLVH WR
HQJDJHLQVXFKDSHUIRUPDQFHVWDWHVDQRQ-LOOXVRU\ FRPPLWPHQW69

E &RQVLGHUDWLRQ DV%DUJDLQHG-IRU([FKDQJH

7KHVH HOHPHQWV RI H[FKDQJH KRZHYHU GR QRW DPRXQW WR


FRQVLGHUDWLRQ XQGHU PRGHUQ GRFWULQH XQOHVV WKH\ DUH OLQNHG WRJHWKHU LQ D
EDUJDLQ 70  $FFRUGLQJ WR WKH 6HFRQG 5HVWDWHPHQW ³>D@ SHUIRUPDQFH RU
UHWXUQSURPLVHLVEDUJDLQHGIRULI LW LVVRXJKWE\WKHSURPLVRULQH[FKDQJH
IRU KLV SURPLVH DQG LV JLYHQ E\ WKH SURPLVHH LQ H[FKDQJH IRU WKDW
SURPLVH´71 $ SODLQWLII QHHG QRW VKRZ WKDWHDFK SDUW\ UHFHLYHG D WDQJLEOH
EHQHILWRUSURILWIURPWKHRWKHU¶VSURPLVHRUSHUIRUPDQFH72 VRORQJDVHDFK
SURPLVH RU SHUIRUPDQFH ZDV D JHQXLQH LQGXFHPHQW IRU WKH UHWXUQ
FRQVLGHUDWLRQ

                                                                                                                                                                                                                                                                                                         
FRXUWFRXOGZLWKKROGHTXLWDEOHUHOLHILIWKHH[FKDQJHZDVXQIDLUDQGMXULHVPD\KDYHGLVFRXQWHG
GDPDJHVIRUEUHDFKLIWKHEDUJDLQZDVORSVLGHGLQIDYRURIWKHYLFWLPRIEUHDFK 
65
6HH5(67$7(0(17 6(&21' 2)&2175$&76††  
66
6HHLGDW†  VHHLGDW† GLVWLQJXLVKLQJEHWZHHQJRRGDQGLOOXVRU\SURPLVHV ($//$1
)$516:257+(7$/&2175$&76&$6(6$1'0$7(5,$/6 WKHG 
67
6HHHJ+DPHUY6LGZD\1( 1<&W$SS  QHSKHZ¶VUHIUDLQLQJIURPHQJDJLQJLQ
FHUWDLQOHJDOYLFHV±RUKLVSURPLVHWRGRVR±LQH[FKDQJHIRUDSURPLVHWRSD\PRQH\FRXOGVDWLVI\WKH
FRQVLGHUDWLRQUHTXLUHPHQWHYHQLIVXFKDIRUEHDUDQFHZRXOGEHQHILWKLPDQGZLWKRXWUHJDUGWRWKH
HIIRUWLWUHTXLUHG 5(67$7(0(17 6(&21' 2)&2175$&76†  
68
6HH5(67$7(0(17 6(&21' 2)&2175$&76††  
69
6HHLG†
70
6HHLG†  
71
,G†  
72
6HHHJ+DPHUY6LGZD\1( 1<&W$SS  QHSKHZ¶VUHIUDLQLQJIURPHQJDJLQJLQ
FHUWDLQOHJDOYLFHV±RUKLVSURPLVHWRGRVR±LQH[FKDQJHIRUKLVXQFOH¶VSURPLVHWRSD\PRQH\FRXOG
VDWLVI\WKHFRQVLGHUDWLRQUHTXLUHPHQWZLWKRXWWKHQHHGWRLQTXLUHLQWRZKHWKHUWKHXQFOHZRXOGEHQHILW
IURPVXFKIRUEHDUDQFHLQWKHRUGLQDU\VHQVH 5(67$7(0(17 6(&21' 2)&2175$&76†  
, %%(7621 VXSUDQRWHDW DVHDUO\DVWKH¶VWKHHYROYLQJFRQVLGHUDWLRQUHTXLUHPHQWEHFDPH
GLYRUFHGIURPQRWLRQVRIEHQHILWUHTXLULQJ³DVOLJKWO\ORRVHUFRQFHSWLRQRIUHFLSURFLW\´ VHHDOVR
+2/0(6VXSUDQRWHDW- ³LWLVVDLG>WKDWFRQVLGHUDWLRQFDQEH@DEHQHILWFRQIHUUHGE\
WKHSURPLVHHRQWKHSURPLVRURUDQ\GHWULPHQWLQFXUUHGE\WKHSURPLVHH´ 
 
98 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

>,@WLVWKHHVVHQFHRIDFRQVLGHUDWLRQWKDWE\WKHWHUPVRI
WKH DJUHHPHQW LW LV JLYHQ DQG DFFHSWHG DV WKH PRWLYH RU
LQGXFHPHQWRIWKHSURPLVH&RQYHUVHO\WKHSURPLVHPXVW
EH PDGH DQG DFFHSWHG DV WKH FRQYHQWLRQDO PRWLYH RU
LQGXFHPHQWIRUIXUQLVKLQJ WKHFRQVLGHUDWLRQ 73  

$FFRUGLQJO\RQHZKRSHUIRUPVWKHDFWUHTXHVWHGLQDQ RIIHUWRSD\D
UHZDUG KDV QRW VDWLVILHG WKH FRQVLGHUDWLRQ UHTXLUHPHQW LI KH KDG QR
NQRZOHGJH RI WKH RIIHUHG UHZDUG ZKHQ KH SHUIRUPHG LQ VXFK D FDVH KH
REYLRXVO\ZDVLQGXFHGH[FOXVLYHO\E\ RWKHUIDFWRUVWRHQJDJHLQWKHDFW74 
6LPLODUO\ D SDVW DFW FDQQRW EH FRQVLGHUDWLRQ IRU D VXEVHTXHQW SURPLVH
EHFDXVHWKHSDVWDFWFRXOGQRWKDYHEHHQLQGXFHGE\DSURPLVHWKDWKDGQRW
\HWEHHQIRUPHG75
7KLV UHTXLUHPHQW RI UHFLSURFDO LQGXFHPHQW FHPHQWHG LQWR 86
FRPPRQ ODZGRFWULQHE\-XVWLFH+ROPHVLQWKHQLQHWHHQWKFHQWXU\76 FRXOG
EH YLHZHG DV FRQVLGHUDWLRQ¶V FRXQWHUSDUW WR FDXVH EHFDXVH UHFLSURFDO
LQGXFHPHQW UHODWHV WR D SDUW\¶V UHDVRQ IRU FRQWUDFWLQJ 77 8QOLNH WKH &RGH
&LYLO¶VHPEUDFHRIDQLQWHQWLRQOLEpUDOHDVRQHW\SHRIFDXVHRUPRWLYDWLQJ
UHDVRQ 78 D FKDULWDEOH PRWLYDWLRQ GRHV QRW VDWLVI\ WKLV UHTXLUHPHQW RI
LQGXFHPHQW79
7KH FRQVLGHUDWLRQ GRFWULQH¶V UHTXLUHPHQW RI UHFLSURFDO LQGXFHPHQW
DQG SDUWLFXODUO\ LWV H[FOXVLRQ RI D SURPLVH VXEVHTXHQWO\ PDGH LQ
UHFRJQLWLRQRIDSDVWDFWUDLVHVTXHVWLRQVRIMXVWLFHDQGPRUDOLW\DGGUHVVHG
EULHIO\ LQ D QLQHWHHQWK FHQWXU\ $PHULFDQ FDVH IDPLOLDU WR PDQ\ ODZ
VWXGHQWV 0LOOV Y :\PDQ80  ,Q 0LOOV /HYL :\PDQ DQHPDQFLSDWHG DGXOW
IHOO LOO ZKLOH WUDYHOOLQJ DQG 0LOOV FDUHG IRU /HYL XQWLO /HYL¶V GHDWK DERXW
WZRZHHNVODWHU2QKHDULQJRIWKLV/HYL¶VIDWKHU6HWK:\PDQSURPLVHG
LQZULWLQJWRSD\0LOOV¶H[SHQVHV:KHQ6HWKEUHDFKHGWKLVSURPLVH&KLHI
-XVWLFH 3DUNHU ZULWLQJ IRU WKH 0DVVDFKXVHWWV 6XSUHPH &RXUW UHVLVWHG WKH
LQYLWDWLRQ WR H[SDQG WKH GRFWULQH RI FRQVLGHUDWLRQ WR HQFRPSDVV 6HWK¶V
SURPLVH

                                                                                                                                 
73
+2/0(6VXSUDQRWHDWVHHDOVR5(67$7(0(17 6(&21' 2)&2175$&76†  
74
+2/0(6VXSUDQRWHDW
75
,GDW&25%,1VXSUDQRWHDW
76
+2/0(6VXSUDQRWHDW-
77
6HH&&,9DUW )U  UHIHUULQJWRWKHUHTXLUHPHQWWR³pFULWHSDUOXL-PrPH´ &UDEEWUDQVVXSUD
QRWHDWDUW SURPLVHVWRSURYLGHPRQH\RUJRRGVJUDWXLWRXVO\³PXVWEHHVWDEOLVKHG´LQD
VLJQHGGRFXPHQWLQZKLFKWKHPRQHWDU\VXPRUTXDQWLW\RIJRRGVDUH³ZULWWHQE\KDQG´ 
78
6HH&UDEEWUDQVVXSUDQRWH*ORVVDU\DW1,&+2/$6VXSUDQRWHDW ³FDXVH´
LQWHUSUHWHGDV³PRWLYDWLQJUHDVRQRUSXUSRVH´ 
79
6HH6WHZDUWY7UXVWHHVRI+DPLOWRQ&ROO'HQLR± 1<6XS&W 
80
0LOOVY:\PDQ3LFN 0DVV 
No. 2 Cause Consideration Prom issory Estoppel 99

-XVWLFH 3DUNHU GHSORUHG 6HWK :\PDQ¶V EUHDFK RI SURPLVH 81 DQG


LPSOLFLWO\UHFRJQL]HGLWDVDEUHDFKRIDPRUDOREOLJDWLRQ 82 EXWKHIRXQGQR
OHJDO REOLJDWLRQ WR NHHS WKH SURPLVH  6HWK :\PDQ¶V SURPLVH ZDV QRW
VXSSRUWHG E\ FRQVLGHUDWLRQ SUHFLVHO\ EHFDXVH KH KDG QRW UHTXHVWHG 0LOOV¶
VHUYLFHV0LOOVKDGDFWHGVROHO\RQWKHEDVLVRIDVHQVHRIFKDULW\DQGQRWWR
H[FKDQJH KLV VHUYLFHV IRU D SURPLVH RI SD\PHQW 83  7KXV 6HWK :\PDQ¶V
SURPLVHZKLFKFRXOGQRWKDYHEHHQDQLQGXFHPHQWWR0LOOVZDVJUDWXLWRXV
DQGXQHQIRUFHDEOH
8OWLPDWHO\-XVWLFH3DUNHURSWHGIRUFHUWDLQW\DQGSUHGLFWDELOLW\LQWKH
FRQVLGHUDWLRQ GRFWULQHDWWKHH[SHQVHRIXQIDLUQHVVLQVSHFLDOFDVHV

*HQHUDO UXOHV RI ODZ HVWDEOLVKHG IRU WKH SURWHFWLRQ DQG


VHFXULW\ RI KRQHVW DQG IDLU-PLQGHG PHQ ZKR PD\
LQFRQVLGHUDWHO\ PDNH SURPLVHV ZLWKRXW DQ\ HTXLYDOHQW
ZLOO VRPHWLPHV VFUHHQ PHQ RI D GLIIHUHQW FKDUDFWHU IURP
HQJDJHPHQWVZKLFKWKH\DUHERXQG LQ IRURFRQVFLHQWL WR
SHUIRUP7KLV LVDGHIHFWLQKHUHQWLQDOOKXPDQV\VWHPVRI
OHJLVODWLRQ 7KH UXOH WKDW D PHUH YHUEDO SURPLVH ZLWKRXW
DQ\ FRQVLGHUDWLRQ FDQQRW EH HQIRUFHG E\ DFWLRQ LV
XQLYHUVDOLQLWVDSSOLFDWLRQDQGFDQQRWEHGHSDUWHGIURPWR
VXLW SDUWLFXODU FDVHV LQ ZKLFK D UHIXVDO WR SHUIRUP VXFK D
SURPLVHPD\EHGLVJUDFHIXO84

,WLVWUXHWKDWWKHODZRIVRPHVWDWHVZLOOHQIRUFHDSURPLVHEDVHGRQ
WKH PRUDO REOLJDWLRQ DULVLQJ RXW RI D SDVW VHUYLFH 85 KRZHYHU HYHQ WKRVH
FRXUWVZLOOOLNHO\OLPLWWKDWH[SDQVLRQRIWKHFRQVLGHUDWLRQGRFWULQHWRFDVHV
LQ ZKLFK WKH SDVW VHUYLFH WUDQVIHUV D VXEVWDQWLDO EHQHILW GLUHFWO\ WR WKH
SURPLVRUSDUWLFXODUO\ZKHQWKHVHUYLFHUHVXOWVLQVLJQLILFDQWLQMXU\RURWKHU

                                                                                                                                 
81
6HHLGDW ³>WKHGHIHQGDQW@LVZLOOLQJWRKDYHKLVFDVHDSSHDURQWKHUHFRUGDVDSDUWLFXODU
H[DPSOHRILQMXVWLFH´ 
82
,GDW ³$GHOLEHUDWHSURPLVHFDQQRWEHEURNHQZLWKRXWDYLRODWLRQRIPRUDOGXW\´ 
83
,GDW
84
,GDW-7 KHFRXUWZDVFRPSHOOHGE\SUHFHGHQWWRUHFRJQL]HDOLPLWHGH[FHSWLRQLQWKHIRUPRI
HQIRUFHPHQWRIDQHZSURPLVHWRUHYLYHDQREOLJDWLRQWKDWRQFHZDVSDUWRIDEDUJDLQHG-IRUH[FKDQJH
DQGWKDWZDVH[WLQJXLVKHGE\RSHUDWLRQRIODZ VXFKDVEDQNUXSWF\RUUXQQLQJRIWKHVWDWXWHRI
OLPLWDWLRQV EHIRUHLWVUHYLYDOE\WKHQHZSURPLVH,GDW Q
85
6HHHJ:HEEY0F*RZLQ6R $OD&W$SS  HQIRUFLQJDSURPLVHWRSD\VXSSRUWWR
DQHPSOR\HHDIWHUWKHHPSOR\HHVXVWDLQHGSHUPDQHQWLQMXULHVZKLOHVDYLQJWKHSURPLVRUIURPGHDWKRU
VHULRXVLQMXU\ )$516:257+ VXSUDQRWH†DW-5(67$7(0(17 6(&21' 2)&2175$&76
†    EXWVHH+DUULQJWRQY7D\ORU6(G 1&  GHQ\LQJUHOLHILQ
FLUFXPVWDQFHVVLPLODUO\FRPSHOOLQJDVWKRVHLQ:HEEY0F*RZLQ 
 
100 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

FRVW WR WKH SURPLVH86  0RUHRYHU FRXUWV LQ WKH 8QLWHG 6WDWHV XQLYHUVDOO\
UHFRJQL]H FODLPV LQ TXDVL-FRQWUDFWIRU UHVWLWXWLRQ RI WKH YDOXH RI D VHUYLFH
FRQIHUUHG RQ WKH GHIHQGDQW KRZHYHU WKDW GRFWULQH LV OLPLWHG WR FDVHV LQ
ZKLFKWKHHQULFKPHQWRIWKHGHIHQGDQWLVXQMXVWDVZKHQWKHSODLQWLIIKDG
UHDVRQDEO\ H[SHFWHG FRPSHQVDWLRQ IRU WKH VHUYLFH SHUKDSV EHFDXVH RI D
VSHFLDO UHODWLRQVKLS EHWZHHQ WKH SDUWLHV DW WKH WLPH RI WKH HQULFKPHQW87 
5HVWLWXWLRQZRXOGQRWDSSO\WRDFDVHLQZKLFKWKHSODLQWLIIKDGDFWHGRXWRI
D VHQVH RI FKDULW\ DQG KDG H[SHFWHG QR FRPSHQVDWLRQ 88 ZKLFK OLNHO\ ZDV
WKHFDVHLQ0LOOVY:\PDQ:LWKRXWPRUDOREOLJDWLRQRUTXDVL-FRQWUDFWDV
SRVVLEOH JURXQGV IRU UHOLHI 0LOOV VTXDUHO\ FRQIURQWHG FRQVLGHUDWLRQ¶V
UHTXLUHPHQWRIUHFLSURFDOLQGXFHPHQW ZKLFKZDVFOHDUO\ODFNLQJ
,Q FORVHU FDVHV +ROPHV FRQFHGHG WKDW VXEWOH FKDQJHV RI IDFW RU
IDFWXDOLQIHUHQFHFRXOGVSHOOWKHGLIIHUHQFHEHWZHHQJUDWXLWRXVSURPLVHVRQ
WKH RQH KDQG DQG H[FKDQJHV ZLWK UHFLSURFDO LQGXFHPHQW RQ WKH RWKHU89 
$QRWKHUQLQHWHHQWKFHQWXU\$PHULFDQFDVH.LUNVH\Y.LUNVH\90 SURYLGHVD
JRRG H[DPSOH  ,Q .LUNVH\ $QWLOOLFR¶V EURWKHU-LQ-ODZ RQ KHDULQJ RI WKH
GHDWK RI KLV EURWKHU $QWLOOLFR¶V KXVEDQG ZURWH D OHWWHU SURPLVLQJ WR
SURYLGH D FRPIRUWDEOH KRXVH IRU $QWLOOLFR DQG KHU FKLOGUHQ LI VKH ZRXOG
³FRPHGRZQDQGVHHPH´91 :K\ZDVWKHEURWKHU-LQ-ODZEDUJDLQLQJIRUWKH
SUHVHQFHRI$QWLOOLFRDQGKHUIDPLO\RQKLVHVWDWHSHUKDSVEHFDXVHKHZDV
ORQHO\RUEHFDXVHKHQHHGHGWKHLUDVVLVWDQFHLQWHQGLQJWKHODQG" 92 2UZDV
KHDFWLQJSXUHO\JUDWXLWRXVO\ZKLOHVWDWLQJWKHREYLRXVIDFWWKDWVKHDQGKHU
IDPLO\ ZRXOGQHHGWRPRYHWRHQMR\WKHSURPLVHGJLIW"
$OWKRXJKWKH$ODEDPD6XSUHPH&RXUW¶VEULHIRSLQLRQSURYLGHVOLWWOH
UHDVRQLQJ WKH IDFWV SUHVHQWHG E\ WKH &RXUW FRXOG KDYH VXSSRUWHG HLWKHU
FRQFOXVLRQ,QGHHGWKHMXU\DQGRQH$ODEDPD6XSUHPH&RXUWMXVWLFHGUHZ
LQIHUHQFHVVXSSRUWLQJDILQGLQJRIFRQVLGHUDWLRQEXWWKH$ODEDPD6XSUHPH

                                                                                                                                 
86
6HHHJ:HEEY0F*RZLQ6R $OD  XQGHUVFRULQJWKRVHSRLQWVLQGHQ\LQJUHYLHZ
RIWKHGHFLVLRQRIWKH&RXUWRI$SSHDOV 2WKHUVWDWHVPD\UHTXLUHWKHIRUPDOLW\RIDZULWWHQSURPLVHDV
DOLPLWDWLRQRQWKLVGRFWULQH6HHHJ5HDOW\$VVRFLDWHVRI6HGRQDY9DOOH\1DW¶O%DQNRI$UL]
3G $UL]$SS  UHFRJQL]LQJWKLVGRFWULQHJHQHUDOO\EXWUHO\LQJRQSUHFHGHQWLQZKLFKWKH
SURPLVHKDGEHHQZULWWHQ 
87
6HHHJ)$516:257+ VXSUDQRWH†DW-
88
6HHHJLG3\HDWWHY3\HDWWH3G &W$SS VHHDOVR5(67$7(0(17 7+,5' 
2)5(67,787,21 81-867( 15,&+0(17††-  
89
+2/0(6VXSUDQRWHDW
90
.LUNVH\Y.LUNVH\$OD $OD VHHDOVR:LOOLDP5&DVWUR 9DO'5LFNV³ 'HDU6LVWHU
$QWLOOLFR´7KH6WRU\RI.LUNVH\Y.LUNVH\*(2 /-  
91
.LUNVH\$ODDW
92
7 KHUHVHDUFKFRQGXFWHGE\&DVWURDQG5LFNVFRQYLQFLQJO\SDLQWVDGLIIHUHQWDQGPRUHFRPSOH[
SLFWXUH&DVWUR 5LFNVVXSUDQRWHDW--+RZHYHUWKLVDUWLFOH¶VDQDO\VLVOLPLWVLWVHOI
WRWKHVSDUVHIDFWVSUHVHQWHGE\WKHFRXUWDVGRHVWKLVDXWKRULQWKHFODVVURRPEHFDXVHWKHVWDWHGIDFWV
GHILQHWKHSUHFHGHQWLDOUHDFKRIWKHRSLQLRQ
No. 2 Cause Consideration Prom issory Estoppel 101

&RXUW UHYHUVHG EHFDXVH D PDMRULW\ RI MXVWLFHV IRXQG WKH EURWKHU-LQ-ODZ¶V


SURPLVHJUDWXLWRXVDQGWKXVXQHQIRUFHDEOH 93
7KH .LUNVH\ GHFLVLRQ LOOXVWUDWHV WKH UHVWULFWLYH QDWXUH RI WKH
FRQVLGHUDWLRQ UHTXLUHPHQW HVSHFLDOO\ ZLWK LWV +ROPHVLDQ HPSKDVLV RQ
UHFLSURFDO LQGXFHPHQW  ,Q DGGLWLRQ WKH IDFWV RI WKH FDVH XQGHUVFRUH WKH
LQMXVWLFHWKDWPD\UHVXOWIURPDSURPLVHH¶VUHOLDQFHRQDJUDWXLWRXVSURPLVH
WKDW LV ODWHU EUHDFKHG 2Q UHFHLYLQJ WKH SURPLVH RI DFRPIRUWDEOH KRPH
$QWLOOLFR DEDQGRQHG KHU FXUUHQW UHVLGHQFH DQG PRYHG KHU KRXVHKROG
DSSUR[LPDWHO\ VL[W\ PLOHV WR KHU EURWKHU-LQ-ODZ¶V HVWDWH 94  :KHQ WKH
EURWKHU-LQ-ODZODWHUUHPRYHGKHUIURPWKHSURPLVHGKRXVHVKHSUHVXPDEO\
GLGQRWKDYHWKHRSWLRQ RIUHWXUQLQJWRKHUIRUPHUUHVLGHQFH95
,IVXFKDFDVHDURVHLQPRGHUQWLPHV$QWLOOLFR¶VVXLWZRXOGLQFOXGHD
FODLPIRUGDPDJHVEDVHGRQSURPLVVRU\HVWRSSHO +RZHYHULWLVQRWFOHDU
WKDW SURPLVVRU\ HVWRSSHO ZDV DYDLODEOH WR $QWLOOLFR LQ $ODEDPD LQ 
DOWKRXJK LWVHYROXWLRQ ZDVXQGHUZD\96

,,, 3URPLVVRU\(VWRSSHODV6KLHOGDQG6ZRUG

$ 3URWHFWLQJ5HOLDQFHRQ3URPLVHVDVZHOODV5HSUHVHQWDWLRQVRI
)DFWV

$WWKHWLPHRI.LUNVH\Y.LUVNH\LQWKHPLG-QLQHWHHQWKFHQWXU\RQH
ZKR KDG UHOLHG RQ D UHSUHVHQWDWLRQ RI H[LVWLQJ IDFW UDWKHU WKDQ
UHSUHVHQWDWLRQ RI IXWXUH LQWHQWLRQV ZRXOG EH SURWHFWHG E\ SURPLVVRU\

                                                                                                                                 
93
.LUNVH\$ODDW
94
,G
95
,G$QWLOOLFRDSSDUHQWO\DEDQGRQHGKHUUHVLGHQFHZLWKRXWIROORZLQJKHUEURWKHU-LQ-ODZ¶VDGYLFHWR
OLTXLGDWHKHULQWHUHVWLQWKHUHVLGHQFHZKLFKPDGHKHUUHOLDQFHSDUWLFXODUO\GHWULPHQWDOEXWZKLFKPLJKW
DOVRXQGHUPLQHDQ\FODLPIRUSURPLVVRU\HVWRSSHOLIDFRXUWIRXQGKHUUHOLDQFHWREHXQIRUHVHHDEOHRU
XQUHDVRQDEOHRUIRXQGWKDWWKHLQMXVWLFHZDVRIKHURZQPDNLQJ6HHDOVRHJ5(67$7(0(17
6(&21' 2)&2175$&76†   UHTXLULQJIRUHVHHDEOHUHOLDQFHDQGDQLQMXVWLFH &25%,1 VXSUD
QRWH†DW± GLVFXVVLQJ³/LPLWVRIWKH$FWLRQLQ5HOLDQFH'RFWULQH´ FI5LFNHWWVY
6FRWKRUQ1: 1HE  ILQGLQJLW³JURVVO\LQHTXLWDEOH´WKDWWKHSURPLVRUEUHDFKHGD
SURPLVHWKDWLQGXFHGUHOLDQFHWKDWWKHSURPLVRUFRQWHPSODWHGDVD³UHDVRQDEOHDQGSUREDEOH
FRQVHTXHQFHRIKLVJLIW´ 
96
6HH&25%,1 VXSUDQRWH†DW± GLVFXVVLQJKRZWKHUHVLVWDQFHRI+ROPHVDQGRWKHU
MXGJHV WRWKHSURPLVVRU\HVWRSSHOWKHRU\ZDVHYHQWXDOO\RYHUFRPHE\WKH$PHULFDQ/DZ,QVWLWXWH¶V
HPEUDFHRIWKHGRFWULQH &DVWUR 5LFNVVXSUDQRWHDW- GLVFXVVLQJ$ODEDPDFDVHODZ¶V
LQWHUSUHWDWLRQRIUHOLDQFHWRHTXDWHZLWKWKHGHWULPHQWUHTXLUHGIRUFRQVLGHUDWLRQZKLFK$QWLOOLFR¶V
DWWRUQH\GLGQRWFLWH 5LFNHWWV1:DW GLVFXVVLQJKRZWKH1HEUDVND6XSUHPH&RXUW
UHFRJQL]HGDFODLPIRUSURPLVVRU\HVWRSSHOLQWKHODWHQLQHWHHQWKFHQWXU\ 
 
102 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

HVWRSSHO LQ (QJODQG RU WKH8QLWHG 6WDWHV97  ,I WKH UHSUHVHQWLQJ SDUW\ ODWHU
DGYDQFHGDFODLPUHVWLQJRQDFRQWUDU\DVVHUWLRQRIIDFWWKHUHO\LQJSDUW\
FRXOGLQYRNHHVWRSSHODVDVKLHOGDJDLQVWWKHFODLP 98 %\WKHPLG-WZHQWLHWK
FHQWXU\ERWK(QJODQGDQGWKH8QLWHG6WDWHVKDGH[WHQGHGHVWRSSHOWKHRU\
WR SURWHFW UHOLDQFH RQ D SURPLVH ZKLFK DPRXQWHG WR D UHSUHVHQWDWLRQ RI
IXWXUHLQWHQWLRQV UDWKHUWKDQRQHRIH[LVWLQJ IDFW

 3URPLVVRU\(VWRSSHOLQWKH8QLWHG6WDWHV

,Q  LQ 5LFNHWWV Y 6FRWKRUQ WKH 1HEUDVND 6XSUHPH &RXUW
SURWHFWHGD\RXQJZRPDQ¶VUHOLDQFHRQKHUJUDQGIDWKHU¶VZULWWHQSURPLVHWR
SD\KHUSOXVDFFUXLQJ LQWHUHVWRQKHUGHPDQG 99 7KHSURPLVHZDV
JUDWXLWRXV XQGHU WKH EDUJDLQ WKHRU\ RI FRQVLGHUDWLRQ EHFDXVH WKH
JUDQGIDWKHUKDGSURPLVHGWRHQDEOHKLVJUDQGGDXJKWHU.DWLHWRTXLWZRUN
LI VKH VR GHVLUHG EXW ZLWKRXW UHTXLULQJ KHU WR TXLW LQ H[FKDQJH IRU KLV
SURPLVH100 ,QUHOLDQFHRQWKHSURPLVHKRZHYHUVKHGLGTXLWZRUNFDXVLQJ
KHU WR VXIIHU ORVV ZKHQ KHU JUDQGIDWKHU¶V H[HFXWRU UHIXVHG WR KRQRU WKH
JUDQGIDWKHU¶VSURPLVH101 
,Q5LFNHWWVWKHFRXUWIRXQGJURXQGVIRUHVWRSSHOLQWKHFLUFXPVWDQFHV
RI WKH FDVH  7KH *UDQGIDWKHU ³GHVLULQJ WR SXW >.DWLH@ LQ D SRVLWLRQ RI
LQGHSHQGHQFHJDYHKHUWKHQRWH´WKXVPDNLQJDSURPLVH 102 .DWLHFKDQJHG
KHUSRVLWLRQLQUHOLDQFHRQWKDWSURPLVHE\DEDQGRQLQJKHUHPSOR\PHQWIRU
PRUH WKDQ D \HDU103  7KH FRXUW KHOG WKDW WKH JUDQGIDWKHU ³FRQWHPSODWHG
VXFK DFWLRQ RQ KHU SDUW DV DUHDVRQDEOH DQG SUREDEOH FRQVHTXHQFH RI KLV
>SURPLVHG@JLIW´EHFDXVHKHWROGKHUWKDWKHZLVKHGWRPDNHKHUILQDQFLDOO\
LQGHSHQGHQW VR WKDW VKH FRXOG FKRRVH WR TXLW KHU MRE LI VKH ZLVKHG 104 
7KHUHIRUH³LWZRXOGEHJURVVO\ LQHTXLWDEOH´IRUKLP³WRUHVLVWSD\PHQWRQ
WKHJURXQGWKDWWKHSURPLVHZDVJLYHQZLWKRXWFRQVLGHUDWLRQ´ 105
%\WKH$PHULFDQ/DZ,QVWLWXWHKDGLQFRUSRUDWHGWKLVQHZIRUP
RI HVWRSSHO LQWR 6HFWLRQ  RI LWV )LUVW 5HVWDWHPHQW RI &RQWUDFWV106  7KH
IDFWXDO SUHGLFDWHV IRU UHOLHI ZHUH VLPLODU WR WKRVH VWDWHG LQ 5LFNHWWV Y

                                                                                                                                 
97
-RUGHQY0RQH\(QJ5HS +/ 0(/9,//(%,*(/2:$75($7,6(217+(/$:2)
(6723 3(/$1',76$33/,&$7,21,135$&7,&( WKHG 
98
6HH3LFNDUGY6HDUV(QJ5HS .% 
99
5LFNHWWV1:DW
100
,GDW
101
,G
102
,GDW
103
,GDW
104
,GDW
105
,GDW
106
5(67$7(0(17 ),567 2)&2175$&76†  
No. 2 Cause Consideration Prom issory Estoppel 103

6FRWKRUQ107  7KH\ LQFOXGHG D SURPLVH DQ ³DFWLRQ RU IRUEHDUDQFH RI D


GHILQLWHDQGVXEVWDQWLDOFKDUDFWHU´LQUHOLDQFHRQWKHSURPLVHDUHDVRQDEOH
H[SHFWDWLRQRQWKHSDUWRIWKHSURPLVRUWKDWWKHSURPLVHZRXOGLQGXFHVXFK
UHOLDQFH DQG D UHVXOWLQJ  ³LQMXVWLFH´ LI WKH EUHDFKHG SURPLVH LV QRW
HQIRUFHG108
6HFWLRQGLGQRWXVHWKHWHUPHVWRSSHOEXWZDVHQWLWOHG ³3URPLVH
5HDVRQDEO\ ,QGXFLQJ 'HILQLWH DQG 6XEVWDQWLDO $FWLRQ´ 109  ,Q KLV 
WUHDWLVHRQFRQWUDFWVKRZHYHU6DPXHO :LOOLVWRQWKHUHSRUWHUIRUWKH)LUVW
5HVWDWHPHQWKDGXVHGWKHWHUP³SURPLVVRU\HVWRSSHO´WRUHIHUWRWKHWKHRU\
WKDW KH ODWHU SUHVHQWHG LQ 6HFWLRQ  110  ,W LVZLGHO\ NQRZQ LQ WKH 8QLWHG
6WDWHV E\ WKDW QDPH111  7KH DEVHQFH RI WKHH[SDQVLYH WHUP ³HVWRSSHO´ LQ
6HFWLRQPD\KDYHUHIOHFWHGDKRSHE\:LOOLVWRQWKDW6HFWLRQZRXOGEH
UHVWULFWHGWRH[FHSWLRQDOFODVVHVRIQRQFRPPHUFLDOFDVHVVXFKDVFKDULWDEOH
GRQDWLRQVDQGIDPLO\SURPLVHV112 %XWWKHSUH-5HVWDWHPHQWFDVHODZRQWKH
HTXLYDOHQW RI SURPLVVRU\ HVWRSSHO ZDV QRW OLPLWHG WR QRQFRPPHUFLDO
VHWWLQJV113 WKHWH[WRI6HFWLRQ GRHVQRWH[FOXGHFRPPHUFLDOVHWWLQJV114 
DQGFRXUWVKDYHQRWH[FOXGHGFRPPHUFLDOSURPLVHVIURPLWVDPELW 115
:LOOLVWRQVHWIRUWKWKLVJURXQGIRUUHOLHILQDVHFWLRQVHSDUDWHIURPWKH
SURYLVLRQ IRU FRQVLGHUDWLRQ DV D EDUJDLQHG-IRU H[FKDQJH DSSDUHQWO\
UHIOHFWLQJ D PLGGOH SRVLWLRQ EHWZHHQ WKH YLHZ RI +ROPHV DQG &RUELQ 116 
+ROPHV ZRXOG KDYH OLPLWHG HQIRUFHPHQW RI SURPLVHV WR EDUJDLQHG-IRU
H[FKDQJHV ZKLOH &RUELQ VXSSRUWHG H[SDQGLQJ WKH GHILQLWLRQ RI
FRQVLGHUDWLRQ WR LQFOXGH SURPLVHV WKDW LQGXFH UHOLDQFH 117  7KH 6HFRQG
5HVWDWHPHQW SXEOLVKHG LQ  UHWDLQV WKLV VHSDUDWLRQ DV ZHOO DV WKH

                                                                                                                                 
107
5LFNHWWV1:DW
108
5(67$7(0(17 ),567 2)&2175$&76†  
109
,G
110
+RIIPDQY5HG2ZO6WRUHV,QF1:G :LV  FLWLQJWR†RIWKHILUVW
HGLWLRQRI:LOOLVWRQ¶VWUHDWLVH 'DYLG*(SVWHLQHWDO5HOLDQFHRQ2UDO3URPLVHV6WDWXWHRI)UDXGV
DQG³3URPLVVRU\(VWRSSHO´7 (;7(&+/5(9 Q   FLWLQJWR†RIZKDWLW
UHIHUVWRDV:LOOLVWRQ¶VWUHDWLVH .HYLQ07HHYHQ2ULJLQVRI3URPLVVRU\(VWRSSHO-XVWLILDEOH
5HOLDQFHDQG&RPPHUFLDO8QFHUWDLQW\%HIRUH:LOOLVWRQ¶V5HVWDWHPHQW80(0/5(9 
Q Q   FLWLQJWR†RIZKDWLWUHIHUVWRDV:LOOLVWRQ¶VWUHDWLVH 
111
(J1HZWRQ7UDFWRU6DOHV,QFY.XERWD7UDFWRU&RUS1(G ,OO 
112
6HHHJ7HHYHQVXSUDQRWHDW--RHO1JXJL3URPLVVRU\(VWRSSHO7KH/LIH+LVWRU\RI
DQ,GHDO/HJDO7UDQVSODQW85,&+/5(9  
113
7HHYHQVXSUDQRWHDW---
114
5(67$7(0(17 ),567 2)&2175$&76†  5(67$7(0(17 6(&21' 2)&2175$&76†
 VHH1JXJLVXSUDQRWHDW-
115
6HHHJ1HZWRQ7UDFWRU6DOHV,QF1(GDW ,OO +RIIPDQ1:GDW-
Q
116
6HHJHQHUDOO\7HHYHQVXSUDQRWHDW-
117
,G
 
104 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

FRQWLQXHG DEVHQFH RI WKH WHUP ³SURPLVVRU\ HVWRSSHO´ 118  +RZHYHU WKH
6HFRQG 5HVWDWHPHQW OLEHUDOL]HG 6HFWLRQ  HOLPLQDWLQJ WH[W UHTXLULQJ WKH
UHOLDQFH WR EH ³GHILQLWH DQG VXEVWDQWLDO´ UHFRJQL]LQJ UHOLDQFH E\ D WKLUG
SDUW\ DQG SHUPLWWLQJ FRXUWV WR LVVXH WKH UHOLHI QHFHVVDU\ WR DYRLG
LQMXVWLFH119 %\DOORZLQJIOH[LEOHUHPHGLHVVXFKDVDSSURYLQJDQDZDUGRI
UHOLDQFH FRVWV UDWKHU WKDQ H[SHFWDWLRQ LQWHUHVW WKH 6HFRQG 5HVWDWHPHQW
HQFRXUDJHVEURDGHUDSSOLFDWLRQ RISURPLVVRU\ HVWRSSHO 120

 (QJOLVK (VWRSSHOIRU5HOLDQFHRQD3URPLVH

,Q LQ&HQWUDO/RQGRQ3URSHUW\7UXVW/WGY+LJK7UHHV+RXVH
/WG WKH .LQJ¶V %HQFK FRQILUPHG WKDW (QJOLVK ODZ WRR KDG SURJUHVVHG
EH\RQG ³HVWRSSHO LQ WKH VWULFW VHQVH´ ZKLFK LV OLPLWHG WR UHOLDQFH RQ D
UHSUHVHQWDWLRQ RI IDFW 121  $V D ³QDWXUDO UHVXOW RI WKH IXVLRQ RI ODZ DQG
HTXLW\´ (QJOLVK GHFLVLRQV KDG IRU KDOI D FHQWXU\ SURYLGHG VXSSRUW IRU
SURWHFWLRQRIUHOLDQFHRQDSURPLVH 122
,Q+LJK7UHHVDODQGORUG KDGUHQWHGDEORFNRIIODWVLQ/RQGRQWRD
FRPPHUFLDOWHQDQWIRU SHU\HDUIRU\HDUV,Q WKHODQGORUG
FRQILUPHG DQ DJUHHPHQW LQ ZULWLQJ WR UHGXFH WKH UHQW E\ KDOI IRU WKH
GXUDWLRQRIZDUWLPHFRQGLWLRQV 123 1RFRQVLGHUDWLRQKDGEHHQJLYHQIRUWKLV
SURPLVHWRZDLYHKDOIWKHUHQWLQIXWXUH\HDUVDQGWKHFRXUWDFNQRZOHGJHG
WKDWWKHFRPPLWPHQWWRUHGXFHWKHUHQWZDVD³UHSUHVHQWDWLRQDVWRWKH
IXWXUH´ UDWKHU WKDQ RQH RI H[LVWLQJ IDFW 124  $ VHSDUDWH GHFLVLRQ RI 
VWDWHG WKDW QR UHOLHI ZRXOG EH DYDLODEOH LQ VXFK FLUFXPVWDQFHV 125 
1RQHWKHOHVV-XGJH'HQQLQJFLWHGIRXUGHFLVLRQVEHWZHHQDQGWR
VXSSRUW H[WHQGLQJ HVWRSSHO WR UHOLDQFH RQ D SURPLVH QRWLQJ WKDW WKH
ODQGORUG KDG LQWHQGHG LWV SURPLVH WR EH ELQGLQJ XQWLO FLUFXPVWDQFHV
FKDQJHG126 
                                                                                                                                 
118
5(67$7(0(17 6(&21' 2)&2175$&76†    
119
,G7 KHVHFRQG5HVWDWHPHQWDOVRDGYDQFHVWKHYLHZWKDWUHOLDQFHRQDSURPLVHRIGRQDWLRQWRD
FKDULWDEOHRUJDQL]DWLRQVKRXOGEHHQIRUFHDEOHZLWKRXWSURRIRIUHOLDQFH
120
6HHHJ1HZWRQ7UDFWRU6DOHV,QF1(DW- LQYRNLQJIOH[LELOLW\LQUHPHG\WRUHMHFWDQ
DUJXPHQWWKDWDQDIILUPDWLYHFDXVHRIDFWLRQIRUUHOLDQFHRQDSURPLVHGXULQJEDUJDLQLQJZRXOGFDXVHD
FRXUWWRGHILQHH[SHFWDWLRQLQWHUHVWEHIRUHWKHSDUWLHVKDGFRPSOHWHGWKHLUQHJRWLDWLRQV :KHHOHUY
:KLWH6:G- 7H[  DZDUGLQJUHOLDQFHFRVWVLQDFRPPHUFLDOVHWWLQJDQG
VXJJHVWLQJWKDWUHOLDQFHGDPDJHVKHOSHGWRPHHWDUHTXLUHPHQWWKDWHVWRSSHOEH³GHIHQVLYH´LQ
DSSOLFDWLRQ +RIIPDQ1:DW- DZDUGLQJOLPLWHGGDPDJHVLQFRPPHUFLDOVHWWLQJHYHQ
WKRXJKLQGHILQLWHQHVVLQWKHSURPLVHGIUDQFKLVHZRXOGSUHFOXGHH[SHFWDWLRQGDPDJHV 
121
>@.%
122
,GDW±
123
,GDW
124
,GDW
125
,G FLWLQJ-RUGHQY0RQH\(QJ5HS +/ 
126
,GDW-
No. 2 Cause Consideration Prom issory Estoppel 105

% 3URPLVVRU\(VWRSSHODVD6ZRUGDV:HOODVD6KLHOG

+RZHYHUWKHH[WHQVLRQRIHVWRSSHOLQ(QJODQGDQGWKH8QLWHG6WDWHV
GLYHUJHG  ,Q (QJODQG HVWRSSHO ZDV OLPLWHG LQ DSSOLFDWLRQ WR D VKLHOG
DJDLQVWWKHRWKHUSDUW\¶VFODLP,QWKH8QLWHG6WDWHVWKLVQHZHVWRSSHOZDV
WUDQVIRUPHG LQWR D VZRUG WR DGYDQFH DQ LQGHSHQGHQW FODLP IRU UHOLHI
7UDGLWLRQDOHVWRSSHOSURWHFWLQJUHOLDQFHRQUHSUHVHQWDWLRQVRIH[LVWLQJIDFW
LV SURSHUO\ OLPLWHG WR GHIHQVLYH XVH DV D VKLHOG 127  )RU WKH PRVW SDUW
(QJODQG KDV UHWDLQHG WKLV OLPLWDWLRQ IRU SURPLVVRU\ HVWRSSHO ZKLOH PRVW
86MXULVGLFWLRQVKDYHDSSOLHGWKHSURPLVVRU\HVWRSSHODVWKHEDVLVIRUDQ
DIILUPDWLYHFODLPIRUUHOLHI

 (VWRSSHODVD6KLHOGLQ(QJODQG

(YHQWKRXJKWKH+LJK7UHHVGHFLVLRQUHIHUUHGEURDGO\WRDSURPLVH
EHLQJ ³ELQGLQJ´ ZKHQ WKH SURPLVH LQGXFHV UHOLDQFH WKH HVWRSSHO LQ WKDW
FDVHZDVDSSOLHGRQO\DVDVKLHOGDJDLQVWWKH ODQGORUG¶VFODLPIRUIXOOUHQW
IRUWKHGXUDWLRQRIWKHZDU128 ,QFLWLQJWRFDVHVLQWKHSUHYLRXVKDOIFHQWXU\
ZKLFKKDGH[WHQGHGHVWRSSHOWRUHOLDQFHRQDSURPLVHRIIXWXUHDFWLRQWKH
FRXUWZDVFDUHIXOWRQRWHWKDW

>W@KH FRXUWV KDYH QRW JRQH VR IDU DV WR JLYH D FDXVH RI
DFWLRQ LQ GDPDJHV IRU WKH EUHDFK RI VXFK D SURPLVH EXW
WKH\ KDYH UHIXVHG WR DOORZ WKH SDUW\ PDNLQJ LW WR DFW
LQFRQVLVWHQWO\ ZLWK LW ,W LV LQ WKDW VHQVH DQG WKDW VHQVH
RQO\ WKDWVXFKDSURPLVHJLYHVULVHWRDQHVWRSSHO 129

$ IHZ \HDUV DIWHU +LJK 7UHHV WKH &RXUW RI $SSHDO IRU WKH .LQJ¶V
%HQFKFRQILUPHGWKLV OLPLWDWLRQ LQ &RPEHY&RPEH130 ,QWKLVFDVHSULRU
WR D ILQDO GLYRUFH GHFUHHD KXVEDQG SURPLVHG WR SD\ KLV ZLIH   HDFK
\HDUDVPDLQWHQDQFH131 $OWKRXJKKHGLGQRWUHTXHVWDQ\DFWLRQIURPKHUDV
DTXLGSURTXRKLVZLIHUHOLHGRQWKLVSURPLVHE\UHIUDLQLQJIURPDSSO\LQJ

                                                                                                                                 
127
1HZWRQ7UDFWRU6DOHV,QFY.XERWD7UDFWRU&RUS1(G ,OO  GLVWLQJXLVKLQJ
WUDGLWLRQDO³HTXLWDEOHHVWRSSHO´DVLVLWLVFRPPRQO\FDOOHGLQWKH86ZLWKSURPLVVRU\HVWRSSHO /RZ
Y%RXYHULH>@&K &$ 1JXJLVXSUDQRWHDW±
128
>@.%DW-
129
,GDW
130
>@$& .% 
131
,GDW
 
106 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

WRWKH'LYRUFH&RXUWIRUPDLQWHQDQFH 132 ,QWKHZLIH¶VDFWLRQWRHQIRUFHWKH


KXVEDQG¶V SURPLVH WKH WULDO FRXUW DZDUGHG KHU   133  7KH &RXUW RI
$SSHDO UHYHUVHG RQ WKH JURXQGV WKDW WKH KXVEDQG¶V SURPLVH ZDV
XQVXSSRUWHGE\FRQVLGHUDWLRQDQGHVWRSSHOFRXOGQRW EH XVHGE\WKHZLIH
DVDQDIILUPDWLYHFDXVHRIDFWLRQ 134
,QWKHOHDGRSLQLRQLQ &RPEH/RUG-XVWLFH'HQQLQJ ±ZKRHDUOLHUDV
WULDO MXGJH KDG DXWKRUHG WKH GHFLVLRQ LQ WKH +LJK 7UHHVFDVH± H[SUHVVO\
DGGUHVVHGWKHVFRSHRIWKHKROGLQJ LQWKH+LJK7UHHVGHFLVLRQ135

0XFKDV,DPLQFOLQHGWRIDYRXUWKHSULQFLSOHVWDWHGLQWKH
+LJK 7UHHV FDVH    LW LV LPSRUWDQW WKDW LW VKRXOG QRW EH
VWUHWFKHG WRR IDU OHVW LW VKRXOG EH HQGDQJHUHG 7KDW
SULQFLSOHGRHVQRWFUHDWHQHZFDXVHVRIDFWLRQZKHUHQRQH
H[LVWHGEHIRUH,WRQO\SUHYHQWVDSDUW\IURPLQVLVWLQJXSRQ
KLVVWULFWOHJDOULJKWVZKHQLWZRXOGEHXQMXVWWRDOORZKLP
WRHQIRUFHWKHPKDYLQJUHJDUGWRWKHGHDOLQJVZKLFKKDYH
WDNHQSODFHEHWZHHQWKHSDUWLHV136

6HHLQJWKDWWKHSULQFLSOHQHYHUVWDQGVDORQHDVJLYLQJ
D FDXVH RI DFWLRQ LQ LWVHOI LW FDQ QHYHU GR DZD\ ZLWK WKH
QHFHVVLW\RIFRQVLGHUDWLRQZKHQWKDWLVDQHVVHQWLDOSDUWRI
WKH FDXVH RI DFWLRQ 7KH GRFWULQH RI FRQVLGHUDWLRQ LV WRR
ILUPO\ IL[HGWREHRYHUWKURZQE\DVLGH-ZLQG137

/RUG -XVWLFH %LUNHWW DJUHHG VSHFLILFDOO\ UHIHUULQJ WR WKH DSSOLFDEOH


SULQFLSOHDV³RQHWREHXVHGDVDVKLHOGDQGQRWDVDVZRUG´138 /RUG-XVWLFH
$VTXLWK DOVR LQ DJUHHPHQW VXPPHG XS WKH +LJK 7UHHV SULQFLSOH LQ WKH
IROORZLQJ WHUPV

>Z@KDW WKDW FDVH GHFLGHV LV WKDW ZKHQ D SURPLVH LV JLYHQ
ZKLFK   LV LQWHQGHG WR FUHDWH OHJDO UHODWLRQV   LV
LQWHQGHGWREHDFWHGXSRQE\WKHSURPLVHHDQG  LVLQIDFW
VR DFWHG XSRQ WKH SURPLVRU FDQQRW EULQJ DQ DFWLRQ DJDLQVW
WKH SURPLVHH ZKLFK LQYROYHV WKH UHSXGLDWLRQ RI KLV SURPLVH

                                                                                                                                 
132
,G
133
,GDW-
134
,GDW±
135
,GDW
136
>@$& .%  FLWDWLRQRPLWWHG 
137
,GDW
138
,GDW
No. 2 Cause Consideration Prom issory Estoppel 107

RULVLQFRQVLVWHQWZLWKLW,WGRHVQRWDV,UHDGLWGHFLGHWKDWD
SURPLVHHFDQVXHRQWKHSURPLVH 139

'HVSLWHWKHVHFOHDUUXOLQJVWKHFDVHVOHDGLQJWR &RPEHY&RPEHGLG
QRWIRUPDQXQEURNHQ OLQH,Q LQ +DPPHUVOH\Y'H%LHOWKH+RXVH
RI /RUGV UHFRJQL]HG HVWRSSHO DV D VZRUG E\ HQIRUFLQJ D IDWKHU-LQ-ODZ¶V
SURPLVH WR PDNH D PDUULDJHVHWWOHPHQW XQVXSSRUWHG E\ FRQVLGHUDWLRQ RQ
WKH EDVLV WKDW WKH SODLQWLII PDUULHG LQ UHOLDQFH RQ WKH SURPLVH 140  7KLV
H[SDQVLYH XVH RI HVWRSSHO KDV SHUVLVWHG LQ (QJODQG XQGHU WKH ODEHO RI
SURSULHWDU\HVWRSSHOEXWRQO\LQWKHFRQWH[WRILPSURYHPHQWVPDGHWRODQG
LQUHOLDQFHRQDSURPLVHUHODWLQJWRWKHODQG 141
2XWVLGH WKH QDUURZ FRQWH[W RI SURSULHWDU\ HVWRSSHO WKH (QJOLVK
FRXUWV VRRQ UHWUHDWHG IURP +DPPHUVOH\¶V UHFRJQLWLRQ RI HVWRSSHO DV D
VZRUG142  7KH UHWUHDWFXOPLQDWHG LQ WKH GHILQLWLYH VWDWHPHQWV LQ &RPEHY
&RPEH WKDW HVWRSSHO EDVHG RQ UHOLDQFH RQ D SURPLVH PXVW EH ³XVHG DV D
VKLHOG DQG QRW DV D VZRUG´ 143 EHFDXVH WKH ³SULQFLSOH GRHV QRW FUHDWH QHZ
FDXVHVRIDFWLRQZKHUHQRQHH[LVWHGEHIRUH´ 144
$VLGH IURP UHFRJQL]LQJ SURSULHWDU\ HVWRSSHO DV D FDXVH RI DFWLRQ
(QJOLVK FRXUWV PD\ XOWLPDWHO\ FDUYH RXW RWKHU H[FHSWLRQV WR WKH UXOH RI
&RPEH Y &RPEH  )RU LQVWDQFH WKH\ PD\ IXOO\ SURWHFW UHOLDQFH RQ
DVVXUDQFHVWKDWDSXUSRUWHGREOLJDWLRQZDVYDOLGDQGOHJDOO\HQIRUFHDEOH145 
$VDJHQHUDOUXOHKRZHYHUWKHOLPLWDWLRQLQ&RPEHFRQWLQXHVWREHDSSOLHG
LQFRQWHPSRUDU\(QJOLVK ODZ146 ,QDGHFLVLRQRIWKH+RXVHRI/RUGVDIHZ
\HDUVDIWHU&RPEH9LVFRXQW6LPRQGVFDVWDZDU\H\HRQVWDWHPHQWVPDGH
LQ&RPEHDSSDUHQWO\EHFDXVHKHFRQVLGHUHGWKHWHVWIRUGHIHQVLYHHVWRSSHO
HQXQFLDWHGLQ&RPEHRYHUO\H[SDQVLYH147

>7@KHJLVWRIWKHHTXLW\OLHVLQWKHIDFWWKDWRQHSDUW\KDVE\
KLVFRQGXFWOHGWKHRWKHUWRDOWHUKLVSRVLWLRQ,OD\VWUHVVRQ
WKLV EHFDXVH ,ZRXOG QRW KDYH LW VXSSRVHG SDUWLFXODUO\ LQ
                                                                                                                                 
139
,GDW
140
(5 +/ 
141
1JXJLVXSUDQRWHDW±
142
,GDW±
143
>@$&DW .%  %LUNHWW/- 
144
,GDW 'HQQLQJ/- 
145
$PDOJDPDWHG,QY 3URS&R/WG ,Q/LTXLGDWLRQ Y7H[&RPPHUFH,QW¶O%DQN/WG >@4%
 &W$SS 
146
1JXJLVXSUDQRWHDW±6\URV6KLSSLQJ&R6$Y(ODJKLOO7UDGLQJ&R>@$OO(5
 4%&RPP&UW  TXRWLQJ&RPEHY&RPEHWRILQGWKDWDQDUELWUDWRUFRPPLWWHGHUURULQ
HPSOR\LQJHVWRSSHODVD³QHZFDXVHRIDFWLRQ´ 
147
7 XQJVWHQ(OHF&R/WG97RRO0HWDO0IJ&R/WG 1R >@:/5
 
108 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

FRPPHUFLDO WUDQVDFWLRQV WKDW PHUH DFWV RI LQGXOJHQFH DUH


DSWWRFUHDWHULJKWVDQG,GRQRWZLVKWROHQGWKHDXWKRULW\
RIWKLV+RXVHWRWKHVWDWHPHQWRIWKHSULQFLSOHZKLFK LVWR
EH IRXQG LQ &RPEH Y &RPEH DQG PD\ ZHOO EH IDU WRR
ZLGHO\ VWDWHG148

 (VWRSSHODVD6ZRUGLQWKH8QLWHG6WDWHV

,Q FRQWUDVW LW ZDV QHYHU LQ GRXEW LQ WKH 8QLWHG 6WDWHV WKDW WKH QHZ
GRFWULQHRISURPLVVRU\HVWRSSHOFRXOG EHZLHOGHGDVDVZRUGWRVXSSRUWD
FDXVH RIDFWLRQ IRU GDPDJHV  ,Q 5LFNHWWV Y6FRWKRUQ WKH UHPHG\ IRU WKH
LQMXVWLFHUHVXOWLQJIURP.DWLH¶VUHOLDQFHRQWKHJUDQGIDWKHU¶VSURPLVHWRSD\
KHU  SOXV LQWHUHVW ZDVHQIRUFHPHQW RI WKH SURPLVH WR SD\ 149  7KLV
FDVH DQG VLPLODU FDVHV VRPH RI WKHP DGGUHVVLQJ SURPLVHV PDGH LQ D
FRPPHUFLDO FRQWH[W 150 OHG WKH $PHULFDQ /DZ,QVWLWXWH WR VWDWH LQ 6HFWLRQ
RIWKH)LUVW5HVWDWHPHQWWKDWWKHSURPLVH³LVELQGLQJ LI LQMXVWLFHFDQEH
DYRLGHGRQO\E\HQIRUFHPHQWRIWKHSURPLVH´ 151 1RWKLQJ LQWKLVVXPPDU\
RIODZVXJJHVWVWKDWHQIRUFHPHQWRISURPLVHVKDGEHHQRUVKRXOGEHOLPLWHG
WRGHIHQVLYHDSSOLFDWLRQV 152
7KHUHKDVEHHQQRUHWUHDWLQWKH8QLWHG6WDWHVIURPWKLVZLOOLQJQHVV
WR XVH SURPLVVRU\ HVWRSSHO DV D VZRUG  ,Q  WKH $PHULFDQ /DZ
,QVWLWXWH SXEOLVKHG LWV 5HVWDWHPHQW 6HFRQG  RI &RQWUDFWV UHWDLQLQJ LWV
GHVFULSWLRQ RI SURPLVVRU\ HVWRSSHO DV DQ DIILUPDWLYH FDXVH RI DFWLRQ 153 
7KLV UHVWDWHPHQW UHFRJQL]HG IOH[LELOLW\ LQ UHPHGLHV E\ VWDWLQJ WKDW WKH
³UHPHG\JUDQWHGIRUEUHDFKPD\EHOLPLWHG DVMXVWLFHUHTXLUHV´ 154
)RUWKHPRVWSDUWWKH5HVWDWHPHQWVDFFXUDWHO\VXPPDUL]HSULQFLSOHV
WKDW DUH JHQHUDOO\ DFFHSWHG LQ WKH 8QLWHG 6WDWHV  7KH FRPPRQ ODZ RI
FRQWUDFWV KRZHYHU LV GHYHORSHG LQGHSHQGHQWO\ LQ HDFK RI WKH ILIW\ VWDWHV
&RQVHTXHQWO\DOWKRXJK³WKHSULQFLSOHVRIFRQWUDFWODZGRQRWGLIIHUJUHDWO\
IURP RQH MXULVGLFWLRQ >LQ WKH 86@ WRDQRWKHU´ 155 WKH FRPPRQ ODZ LV QRW
HQWLUHO\XQLIRUPDPRQJVWDWHV7KXVDVUHFHQWO\DVDFDVHDULVLQJLQ
WKH 6WDWH RI ,OOLQRLV UDLVHG WKH TXHVWLRQ RI ZKHWKHU SURPLVVRU\ HVWRSSHO

                                                                                                                                 
148
,G IRRWQRWHRPLWWHG 
149
5LFNHWWVY6FRWKRUQ1: 1HE 
150
1JXJLVXSUDQRWHDW UHIHUULQJWRFDVHVDOORZLQJUHFRYHU\IRUUHOLDQFHRQFRPPHUFLDO
SURPLVHVFLWHGLQ:LOOLVWRQ¶VWUHDWLVH 
151
5(67$7(0(17 ),567 2)&2175$&76†  
152
1JXJLVXSUDQRWHDW UHIHUULQJWRWKH5HVWDWHPHQWKDYLQJEHHQLQIOXHQFHGE\³$PHULFDQ
FRXUWV>WKDW@ZHUHSHUPLWWLQJOLWLJDQWVWRXVHHVWRSSHODVDFDXVHRIDFWLRQ´ 
153
5(67$7(0(17 6(&21' 2)&2175$&76†  
154
,G
155
,QUH&RFKLVH&ROO3DUN,QF)GQ WK&LU 
No. 2 Cause Consideration Prom issory Estoppel 109

FRXOGEHXVHGRIIHQVLYHO\DVDVZRUGRUZDVOLPLWHGWR GHIHQVLYHXVHDVD
VKLHOG156
,Q WKH ,OOLQRLV FDVH UDLVLQJ WKDW LVVXH 1HZWRQ 7UDFWRU 6DOHV ,QF
³176´  VRXJKW WR SXUFKDVH D FRPSHWLQJ UHWDLOHU RI IDUP HTXLSPHQW
9DQGDOLD 7UDFWRU  (TXLSPHQW ,QF ³97(´ 157  176 YDOXHG 97( SDUWO\
EHFDXVH 97( ZDV DQ DXWKRUL]HG GHDOHU RI .XERWD WUDFWRUV KRZHYHU
.XERWD7UDFWRU&RUSLQVLVWHGWKDW97(MRLQLQDFDQFHOODWLRQRILWVFRQWUDFW
ZLWK .XERWD DQG WKDW 176 DSSO\ IRU D QHZ GHDOHUVKLS DJUHHPHQW ZLWK
.XERWD158 ,QUHOLDQFHRQDJUDWXLWRXVSURPLVHE\D.XERWDUHSUHVHQWDWLYH
WKDW 176 ZRXOG EH DSSURYHG DV D .XERWD GHDOHU 176 HQWHUHG LQWR WKH
DJUHHPHQWWRSXUFKDVH 97(ZKLOHDXWKRUL]LQJ 97(WRFDQFHO LWVFRQWUDFW
ZLWK .XERWD 159  .XERWD FRUSRUDWH KHDGTXDUWHUV KRZHYHU XOWLPDWHO\
GHQLHG176¶VDSSOLFDWLRQ IRUD.XERWDGHDOHUVKLS 160
%RWK WKH ,OOLQRLV WULDO FRXUW DQG WKH LQWHUPHGLDWH FRXUW RI DSSHDOV
IRXQG WKDW SURPLVVRU\ HVWRSSHO FRXOG EH XVHG RQO\ DV D VKLHOG LQ ,OOLQRLV
EDVHG RQ WKHLU DSSOLFDWLRQ RI SUHFHGHQW RI WKH FRXUW RI DSSHDOV 161  2Q
IXUWKHUDSSHDOE\176WKH,OOLQRLV6XSUHPH&RXUWDGGUHVVHGWKHTXHVWLRQ
³ZKHWKHUSURPLVVRU\HVWRSSHOLVDUHFRJQL]HGFDXVHRIDFWLRQLQ,OOLQRLV´162 
7KH6XSUHPH&RXUWKHOGLQWKHDIILUPDWLYHLQDQRSLQLRQWKDWVXJJHVWVVRPH
VXUSULVH DW WKH QHFHVVLW\ IRU WKH FRXUW WR FODULI\ LWV SRVLWLRQ RQ ZKDW LW
YLHZHGWREHDVHWWOHGPDWWHURIODZ 163 
$OWKRXJK WKH ,OOLQRLV 6XSUHPH &RXUW FRQFHGHG WKDW ³SURPLVVRU\
HVWRSSHOLVPRVWH[WHQVLYHO\UHFRJQL]HGZLWKUHVSHFWWRWKHDEDQGRQPHQWRI
H[LVWLQJULJKWV´WKHFRXUWIRXQGWKDWLWVRZQSUHFHGHQWDQGVRPHSUHFHGHQW
RIWKHFRXUWRIDSSHDOVKDGSUHYLRXVO\UHFRJQL]HGSURPLVVRU\HVWRSSHODVDQ
DIILUPDWLYH FDXVH RI DFWLRQ 164  7KH ,OOLQRLV 6XSUHPH &RXUW DOVR FLWHG WR
VHFRQGDU\VRXUFHVDQGFDVHVIURPRWKHUMXULVGLFWLRQVVXSSRUWLQJWKHXVHRI
SURPLVVRU\ HVWRSSHODVDVZRUG 165
7KH FRXUW GLG QRW UHVW HQWLUHO\ RQ LWV SUHFHGHQW KRZHYHU EXW DOVR
UHVSRQGHG WR .XERWD¶V SROLF\ DUJXPHQWV DJDLQVW UHFRJQLWLRQ RI DQ

                                                                                                                                 
156
1HZWRQ7UDFWRU6DOHV,QFY.XERWD7UDFWRU&RUS1(G ,OO  GHVFULELQJ
ORZHUFRXUW¶VKROGLQJWKDWSURPLVVRU\HVWRSSHOFRXOGEHXVHGRQO\DVDVKLHOG 
157
,G
158
,GDW
159
,G
160
,G
161
,GDW-
162
,GDW
163
,GDW-
164
,GDW
165
,G
 
110 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

DIILUPDWLYH FDXVH RI DFWLRQ 166  0RVW VXEVWDQWLDOO\ .XERWD DUJXHG WKDW
HQIRUFLQJ D SURPLVH PDGH LQ WKH HDUO\ VWDJHV RI GHDOLQJV DLPHG DW
QHJRWLDWLQJDGHWDLOHGEDUJDLQZRXOGEHLPSUDFWLFDO 167 .XERWDDUJXHGWKDW
HQIRUFHPHQW RI VXFK D SURPLVH ZRXOG LQKLELW QHJRWLDWLRQV EHFDXVH D
SURPLVH PDGHDW WKDW VWDJHZRXOG ODFN WKH GHWDLO DQG SUHFLVLRQ IRU ZKLFK
WKHSDUWLHVZHUHVWULYLQJLQ WKHLUXOWLPDWHFRQWUDFW168 7KH,OOLQRLV6XSUHPH
&RXUW UHMHFWHG WKLV DUJXPHQW EHFDXVH RI WKH IOH[LEOH UHPHGLHV LQ PRGHUQ
SURPLVVRU\ HVWRSSHO DQDO\VLV 169 DV UHIOHFWHG LQ WKH 6HFRQG 5HVWDWHPHQW¶V
IRUPXODWLRQ RI WKH GRFWULQH 170 DQG DVH[SODLQHG LQ WKH FHOHEUDWHG FDVH RI
+RIIPDQY5HG2ZO6WRUHV,QF171
&LWLQJ WR +RIIPDQ DQG D VLPLODU FDVH IURP 7H[DV 172 WKH ,OOLQRLV
6XSUHPH&RXUWQRWHGWKDWWKHUHPHG\IRU.XERWD¶VEUHDFKRISURPLVHFRXOG
EHOLPLWHGWR176¶VUHOLDQFHFRVWV173 ,Q+RIIPDQWKH:LVFRQVLQ6XSUHPH
&RXUW DSSOLHG SURPLVVRU\ HVWRSSHO WR HQIRUFH D SURPLVH WR SURYLGH D
JURFHU\ VWRUH IUDQFKLVH WR WKH SODLQWLII HYHQ WKRXJK WKH VWRUH KDG QRW \HW
EHHQ GHILQHG VR WKH SURPLVH ZDV WRR LQGHILQLWH WR HQIRUFH WKURXJK DQ
DZDUG SURWHFWLQJ H[SHFWDWLRQ LQWHUHVW 174   7KH FRXUW H[SODLQHG WKDW
$PHULFDQSURPLVVRU\HVWRSSHOIOH[LELOLW\SHUPLWVDUHPHG\WKDWDYRLGVWKH
LQMXVWLFHFDXVHGE\WKHUHOLDQFHDQGEUHDFKRISURPLVHDQG LWDFFRUGLQJO\
DSSURYHG DQ DZDUG RI GDPDJHV EDVHG RQ PRUH GHILQLWH UHOLDQFH FRVWV
LQFXUUHG E\ WKH SODLQWLII 175  7KH ,OOLQRLV 6XSUHPH &RXUW WKXV UHMHFWHG
.XERWD¶V DUJXPHQW WKDWHPSOR\LQJ SURPLVVRU\ HVWRSSHO DV D VZRUG ZRXOG
EHLPSUDFWLFDORUZRXOGXQGHUPLQH SUHOLPLQDU\ QHJRWLDWLRQV 176
$V WKH RSLQLRQV LQ WKH ORZHU FRXUWV RI WKH 1HZWRQ FDVH LOOXVWUDWH
HYHQ HLJKW\ \HDUV DIWHU SXEOLFDWLRQ RI WKH )LUVW 5HVWDWHPHQW WKH ODZ LQ
VRPHVWDWHVVWLOOPD\UHTXLUHFODULILFDWLRQRQXVHRISURPLVVRU\HVWRSSHODV
D VZRUG DQG VRPH VWDWHV PD\ XOWLPDWHO\ UHMHFW WKDW DSSURDFK 177 
                                                                                                                                 
166
,GDW-
167
,GDW
168
,G
169
,GDW±
170
5(67$7(0(17 6(&21' 2)&2175$&76†  
171
+RIIPDQY5HG2ZO6WRUHV,QF1:G :LV 
172
:KHHOHUY:KLWH6:GDW 7H[ 
173
1HZWRQ7UDFWRU6DOHV,QF1(GDW
174
+RIIPDQ1:GDW-
175
,G
176
1HZWRQ7UDFWRU6DOHV,QF1(GDW-
177
&RQWUDFWVVFKRODU-RVHSK3HULOORLGHQWLILHVRQO\9LUJLQLDDVDVWDWHWKDWKDVVSHFLILFDOO\UHMHFWHG
SURPLVVRU\HVWRSSHODVDQDIILUPDWLYHFDXVHRIDFWLRQ3HULOORVXSUDQRWH†DW Q
FLWLQJWR:-6FKDIHU$VVRFY&RUGDQW6(G 9D 2QHFDQILQGVLPLODUUHMHFWLRQV
LQ7H[DVFDVHODZVHHHJ6WDQOH\Y&LWL)LQDQFLDO0RUWJDJH&R,QF6:G 7H[&W
$SS +RZHYHURWKHU7H[DVFDVHVKROGWRWKHFRQWUDU\6HH(SVWHLQHWDOVXSUDQRWHDW
Q7 KHVHODWWHUFDVHVUHSUHVHQWDFDUHIXOUHDGLQJRIDGHFLVLRQRIWKH7H[DV6XSUHPH&RXUWWKDW
No. 2 Cause Consideration Prom issory Estoppel 111

1RQHWKHOHVV DV UHIOHFWHG LQ WKH )LUVW DQG 6HFRQG 5HVWDWHPHQWV DQG LQ D
FHQWXU\RIFDVHODZIURP5LFNHWWVWR1HZWRQWKHSUHYDLOLQJDSSURDFKLQWKH
8QLWHG6WDWHVZLWKRXWGRXEWLVWRUHFRJQL]HSURPLVVRU\HVWRSSHODVDVZRUG
DVZHOODVDVKLHOG

& ([SODLQLQJWKH'LYHUJHQFH%HWZHHQ3URPLVVRU\(VWRSSHOLQ
(QJODQGDQGWKH86

 6ZRUGDQG6KLHOG 0RUH)XOO\ 'HILQHG

$UJXDEO\ WKH (QJOLVK UXOH LV QRW IDU UHPRYHG IURP WKH $PHULFDQ
DSSURDFK EHFDXVH HYHQ HVWRSSHO WKDW LV UHVWULFWHG LQ DSSOLFDWLRQ WR D
GHIHQVLYH VKLHOG FDQ EH HPSOR\HG WR DGYDQFH DQ DIILUPDWLYH FODLP  ,Q
&RPEH Y &RPEH /RUG -XVWLFH 'HQQLQJ H[SODLQHG WKDW UHOLDQFH RQ D
UHSUHVHQWDWLRQ RU SURPLVH VRPHWLPHV JLYHV ULVH WR DQ HVWRSSHO WKDW
QHXWUDOL]HV D GHIHQVH RI WKH SDUW\ UHVLVWLQJ D FODLP UDWKHU WKDQ UDLVLQJ D
VKLHOG DJDLQVWWKHSDUW\DGYDQFLQJDFODLP

6RPHWLPHVLW LVDSODLQWLIIZKR LVQRWDOORZHGWR LQVLVWRQ


KLV VWULFW OHJDO ULJKWV     2Q RWKHU RFFDVLRQV LW LV D
GHIHQGDQW ZKR LV QRW DOORZHG WR LQVLVW RQ KLV VWULFW OHJDO
ULJKWV +LV FRQGXFW PD\ EH VXFK DV WR GHEDU KLP IURP
UHO\LQJ RQ VRPH FRQGLWLRQ GHQ\LQJ VRPH DOOHJDWLRQ RU
WDNLQJ VRPH RWKHU SRLQW LQ DQVZHU WR WKH FODLP 7KXV D
JRYHUQPHQW GHSDUWPHQW ZKLFK KDG DFFHSWHGD GLVHDVH DV
GXH WR ZDU VHUYLFH ZHUH QRW DOORZHG DIWHUZDUGV WR VD\ LW
ZDV QRW VHHLQJ WKDW WKH VROGLHU LQ UHOLDQFH RQ WKH
DVVXUDQFH KDG DEVWDLQHG IURP JHWWLQJ IXUWKHU HYLGHQFH
DERXWLW178

7DNHQ WR DQ H[WUHPH WKLV FKDUDFWHUL]DWLRQ FRXOG EH H[SDQGHG WR
DUJXH WKDW D IRUP RI GHIHQVLYH SURPLVVRU\ HVWRSSHO LV WKH HTXLYDOHQW RI
RIIHQVLYH SURPLVVRU\ HVWRSSHO  ,ID SODLQWLII VHHNV WR HQIRUFH D JUDWXLWRXV
SURPLVHRQZKLFKWKHSODLQWLIIUHOLHGDQGLIWKHGHIHQGDQWUHVSRQGVWKDWWKH
SURPLVH LV XQVXSSRUWHG E\ FRQVLGHUDWLRQ WKH SODLQWLII¶V DVVHUWLRQ RI

                                                                                                                                                                                                                                                                                                         
DSSURYHGRISURPLVVRU\HVWRSSHODVDQDIILUPDWLYHFDXVHRIDFWLRQWKRXJKPLVOHDGLQJO\ODEHOLQJLWDV
³GHIHQVLYH´LQWKHVHQVHWKDWHVWRSSHOSUHYHQWHGWKHGHIHQGDQWIURPGHQ\LQJOLDELOLW\IRUGDPDJHV
:KHHOHU6:GDW
178
&RPEH>@$&DW- .%  'HQQLQJ/- 
 
112 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

SURPLVVRU\ HVWRSSHO FDQ EH XVHG DV D ³VKLHOG´ DJDLQVW WKH GHIHQGDQW¶V
DVVHUWLRQ RI ODFN RI FRQVLGHUDWLRQ  7KLV DFWLRQ LV WKH HTXLYDOHQW RI XVLQJ
SURPLVVRU\ HVWRSSHO DV DVZRUG WR DVVHUW DFODLP IRU GDPDJHV WKHUHIRUH
SHUKDSV WKH (QJOLVK OLPLWDWLRQ RI HVWRSSHO WR D VKLHOG LV LQGLVWLQJXLVKDEOH
IURPWKHXVHRISURPLVVRU\ HVWRSSHOLQWKH8QLWHG6WDWHVDVDVZRUG
7KLVDUJXPHQWKRZHYHUHYHQWXDOO\HQFRXQWHUVDEDUULHU$VLGHIURP
WKHOLPLWHGFRQWH[WRISURSULHWDU\HVWRSSHO(QJOLVKSURPLVH-EDVHGHVWRSSHO
GRHV QRW H[WHQG WR EORFNLQJ D GHIHQGDQW¶V DVVHUWLRQ WKDW D SURPLVH LV
XQVXSSRUWHG E\ FRQVLGHUDWLRQ RU SURYLGH DQ LQGHSHQGHQW FDXVH RIDFWLRQ
IRUGDPDJHV,ILWGLGSURPLVH-EDVHGHVWRSSHOZRXOGKDYHSURYLGHGDEDVLV
IRUUHOLHILQ&RPEHY&RPEHDFDVHWKDWGHQLHGUHOLHISUHFLVHO\EHFDXVHWKH
KXVEDQG¶VSURPLVHZDVXQVXSSRUWHGE\FRQVLGHUDWLRQDQGHVWRSSHOGLGQRW
SURYLGHDVXEVWLWXWH$V-XVWLFH'HQQLQJZURWH³>V@HHLQJWKDWWKHSULQFLSOH
QHYHUVWDQGVDORQHDVJLYLQJDFDXVHRIDFWLRQLQLWVHOILWFDQQHYHUGRDZD\
ZLWK WKH QHFHVVLW\ RI FRQVLGHUDWLRQ ZKHQ WKDW LV DQ HVVHQWLDO SDUW RI WKH
FDXVHRIDFWLRQ´179
7KLUW\ \HDUV ODWHU WKH &RPPHUFLDO &RXUW RI WKH 4XHHQ¶V %HQFK
TXRWHG &RPEH LQ UXOLQJ WKDW HVWRSSHO FRXOG QRW EH HPSOR\HG DV DQ
DIILUPDWLYH FDXVH RI DFWLRQ WR VXEVWLWXWH IRU D SXUSRUWHG DJUHHPHQW WKDW
ODFNHG FRQVLGHUDWLRQ 180  &RQVHTXHQWO\ HYHQ WKRXJK HVWRSSHO FDQ EH XVHG
DVDVKLHOGLQLQFUHPHQWDOZD\VWRDGYDQFHDQDIILUPDWLYHFDXVHRIDFWLRQD
IXQGDPHQWDOGLVWLQFWLRQUHPDLQVEHWZHHQWKHSRVLWLRQVLQWKH8QLWHG6WDWHV
DQG (QJODQG DERXW WKH HIIHFW RI HVWRSSHO ZKHQ EDVHG RQ UHOLDQFH RQ D
SURPLVH ZLWKRXW FRQVLGHUDWLRQ  &ODLPDQWV IUHTXHQWO\ ZLHOG HVWRSSHO DV D
VZRUG LQ WKH 8QLWHG 6WDWHV ZKHUH WKH GRFWULQH SURYLGHV DQ LQGHSHQGHQW
FODLPIRUGDPDJHVZKHUHDV(QJOLVKMXULVSUXGHQFHJHQHUDOO\OLPLWVHVWRSSHO
WRHPSOR\PHQW DVDVKLHOG DQGQRWDVDQLQGHSHQGHQWFDXVHRIDFWLRQ

 ,VWKH'LYHUJHQFH1DUURZHG7KURXJK5HFRJQLWLRQRIDQ,PSOLHG
([FKDQJH"

,Q&RPEHY&RPEH/RUG-XVWLFH'HQQLQJVDLGWKHIROORZLQJDERXW
WKHGRFWULQHRIFRQVLGHUDWLRQ³,WVLOO-HIIHFWVKDYHEHHQODUJHO\PLWLJDWHGRI
ODWHEXW LWVWLOOUHPDLQVDFDUGLQDOQHFHVVLW\RIWKHIRUPDWLRQRIDFRQWUDFW
WKRXJK QRW RI LWV PRGLILFDWLRQ RU GLVFKDUJH´ 181  %\ UHIHUULQJ WR LWV
³PLWLJDWLRQ´ KLV /RUGVKLS PD\ KDYH VXJJHVWHG WKDW WKH FRQVLGHUDWLRQ
GRFWULQHKDGEHHQH[SDQGHGVXIILFLHQWO\WRUHGXFHRUHOLPLQDWHWKHQHHGIRU

                                                                                                                                 
179
,GDW 'HQQLQJ/- 
180
6\URV6KLSSLQJ&R6$Y(ODJKLOO7 UDGLQJ&R>@$OO(5
181
,G
No. 2 Cause Consideration Prom issory Estoppel 113

D VXSSOHPHQWDU\ FDXVH RIDFWLRQ WKURXJK SURPLVVRU\ HVWRSSHO  ,QGHHG LI


WKH(QJOLVKYHUVLRQ RIFRQVLGHUDWLRQZHUHVXIILFLHQWO\H[SDQVLYHVRWKDW LW
SURYLGHGVXEVWDQWLDOO\WKHHTXLYDOHQWRI SURPLVVRU\HVWRSSHODVDSSOLHG LQ
WKH 86 WKHQ WKH GLYHUJHQFH EHWZHHQ (QJOLVK DQG 86 ODZ ZRXOG EH LQ
QDPHRQO\
$V GHVFULEHG LQ 6HFWLRQ ,,% RI WKLV DUWLFOH +ROPHV LQVSLUHG D
UHVWULFWLYHYLHZRIFRQVLGHUDWLRQ LQWKH8QLWHG6WDWHV7KHUHTXLUHPHQWRI
UHFLSURFDO LQGXFHPHQW VXFFHVVIXOO\ HVSRXVHG E\ +ROPHV HQVXUHG WKDW DQ
DFWLRQRUIRUEHDUDQFHWDNHQLQUHVSRQVHWRD SURPLVHZRXOG QRWVDWLVI\WKH
$PHULFDQFRQVLGHUDWLRQUHTXLUHPHQWXQOHVVWKHSURPLVRUVRXJKWWKHDFWLRQ
LQH[FKDQJHIRUWKHSURPLVH&RQVHTXHQWO\ LQFDVHVZKHUHXQ-EDUJDLQHG-
IRUEXWIRUHVHHDEOHUHOLDQFHRQDSURPLVHMXVWLILHGDUHPHG\LQGDPDJHVDQ
DIILUPDWLYH FDXVH RI DFWLRQ EDVHG RQ SURPLVVRU\ HVWRSSHO EHFDPH D
QHFHVVDU\DGMXQFWWRWKHQDUURZFRQFHSWLRQ RIFRQVLGHUDWLRQ
/RUG -XVWLFH 'HQQLQJ¶V UHIHUHQFH WR PRGLILFDWLRQ RI D FRQWUDFW
ZLWKRXWFRQVLGHUDWLRQUHIOHFWHGRQHZD\WKDW(QJOLVKFRQVLGHUDWLRQGRFWULQH
UHPDLQV OHVVGHPDQGLQJWKDQ$PHULFDQODZZKLFK KDVJHQHUDOO\UHTXLUHG
FRQVLGHUDWLRQIRUWKHPRGLILFDWLRQRIDFRQWUDFW182 H[FHSWIRUVDOHVRIJRRGV
JRYHUQHGE\WKH8QLIRUP&RPPHUFLDO&RGH 183 7KDWOHVVGHPDQGLQJIDFHW
RI(QJOLVKFRQVLGHUDWLRQGRFWULQHKRZHYHUGRHVQRW EULQJ(QJOLVK ODZLQ
OLQH ZLWK WKH $PHULFDQ XVH RI SURPLVVRU\ HVWRSSHO DV D VZRUG  7R
DFFRPSOLVK WKDW (QJOLVK ODZ ZRXOG QHHG WR ILQG FRQVLGHUDWLRQ LQ FDVHV
ZKHUH D SURPLVH LQGXFHG UHOLDQFH WKDW KDG QRW EHHQ UHTXHVWHG E\ WKH
SURPLVRU LQH[FKDQJHIRUWKHSURPLVH
,Q&RPEHY&RPEH'HQQLQJ/-KLQWHGDWDSRVVLEOHDYHQXHIRUVXFK
DQ H[SDQVLRQ RI (QJOLVK FRQVLGHUDWLRQ GRFWULQH E\ UHIHUULQJ WR WKH
LPSOLFDWLRQ RI D UHTXHVW E\ WKH SURPLVRU IRU DQ DFW RU IRUEHDUDQFH LQ
H[FKDQJHIRUKLVSURPLVH

8QLODWHUDO SURPLVHV RI WKLV NLQG KDYH ORQJ EHHQ HQIRUFHG


VRORQJDVWKHDFWRUIRUEHDUDQFHLVGRQHRQWKHIDLWKRIWKH
SURPLVH DQG DW WKH UHTXHVW RI WKH SURPLVRU H[SUHVV RU
LPSOLHG 7KH DFW GRQH LV WKHQ LQ LWVHOI VXIILFLHQW
FRQVLGHUDWLRQIRUWKHSURPLVHHYHQWKRXJKLWDULVHVH[SRVW
IDFWR184 

                                                                                                                                 
182
6HHHJ$ODVND3DFNHUV¶$VV¶QY'RPHQLFR) WK&LU 
183
8&&†-  
184
&RPEH>@$&DW .% 
 
114 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

/RUG -XVWLFH $VTXLWK UHIHUUHG PRUH GLUHFWO\ WR D UHTXLUHG OLQN


EHWZHHQ WKH SURPLVH DQG D UHWXUQ DFWLRQ RU IRUEHDUDQFH VLPLODU WR WKH
$PHULFDQ UHTXLUHPHQW RI UHFLSURFDO LQGXFHPHQW EXW KH WRR VSRNH RI WKH
SRVVLELOLW\ RIDQLPSOLHGUHTXHVWE\WKHSURPLVRU IRUDFWLRQRUIRUEHDUDQFH

)LQDOO\,GRQRWWKLQNDQDFWXDOIRUEHDUDQFHDVRSSRVHGWR
DQDJUHHPHQWWRIRUEHDULVDJRRGFRQVLGHUDWLRQXQOHVV
LWSURFHHGVIURPDUHTXHVWH[SUHVVRULPSOLHGRQ WKHSDUW
RI WKH SURPLVRU ,I QRW PRYHG E\ VXFK D UHTXHVW WKH
IRUEHDUDQFHLVQRWLQUHVSHFWRIWKHSURPLVH 185

%DVHG RQ KLV LQWHUSUHWDWLRQ RI /RUG 'HQQLQJ¶V VFKRODUO\ ZULWLQJV


3URIHVVRU 1JXJL VXJJHVWV WKH SRVVLELOLW\ WKDW D UHTXHVW IRU DFWLRQ RU
IRUEHDUDQFHFRXOG EH VR OLEHUDOO\ LPSOLHG XQGHU (QJOLVK ODZ WKDW LW PLJKW
OHDGWR³LQYHQWHGFRQVLGHUDWLRQ´ZKLFKFRXOGHQFRPSDVV³DPDMRULW\RIWKH
FDVHVFRYHUHGE\WKH$PHULFDQGRFWULQHRISURPLVVRU\ HVWRSSHO´ 186
7KH RSLQLRQV LQ &RPEHY &RPEH KRZHYHU GR QRW VXSSRUW VXFK D
ILFWLRQ,IWKHFRQFHSWRIDQLPSOLHGUHTXHVWFRXOGEHLQYRNHGLQHYHU\FDVH
RIIRUHVHHDEOHUHOLDQFHWKHFRQFHSWFRXOG KDYHEHHQLQYRNHG LQWKDWFDVH
,QVWHDG'HQQLQJ/-VWDWHG

,FDQQRWILQGDQ\HYLGHQFHRIDQ\LQWHQWLRQE\WKHKXVEDQG
WKDWWKHZLIHVKRXOGIRUEHDUIURPDSSO\LQJWRWKHFRXUWIRU
PDLQWHQDQFH RU LQ RWKHU ZRUGV DQ\ UHTXHVW E\ WKH
KXVEDQG H[SUHVV RU LPSOLHG WKDW WKH ZLIH VKRXOG VR
IRUEHDU+HOHIWKHUWRDSSO\ LIVKHZLVKHGWRGRVR 187

6LPLODUO\ /RUG -XVWLFH %LUNHWW JDYH QR LQGLFDWLRQ WKDW KH ZRXOG
HPSOR\WKHFRQFHSWRIDQLPSOLHGUHTXHVWWR³LQYHQW´FRQVLGHUDWLRQZKHUH
QRQHFRXOGEHJOHDQHGIURPWKHHYLGHQFH³7KHUHGRHVQRWDSSHDUDV,UHDG
LWDQ\ZKHUHLQWKHHYLGHQFHDUHTXHVWE\WKHKXVEDQGWKDWWKHZLIHVKRXOG
UHIUDLQIURPJRLQJ WRWKHFRXUW´ 188 
,QFRQWUDVWKDGWKLVFDVHDULVHQLQWKH8QLWHG6WDWHVLQWKHPLGGOHRI
WKH WZHQWLHWK FHQWXU\ D FRXUWDOPRVW FHUWDLQO\ ZRXOG KDYH HQWHUWDLQHG DQ
DIILUPDWLYH FDXVH RI DFWLRQ LQ SURPLVVRU\ HVWRSSHO LQ OLJKW RI WKH ZLIH¶V
UHOLDQFHRQWKHKXVEDQG¶VSURPLVH-XVWDVWKHKXVEDQGLQ&RPEHY&RPEH

                                                                                                                                 
185
,GDW±
186
1JXJLVXSUDQRWHDW±
187
&RPEH>@$&DW .%  'HQQLQJ/- 
188
,GDW %LUNHWW/- 
No. 2 Cause Consideration Prom issory Estoppel 115

³OHIW KHU WRDSSO\ LI VKH ZLVKHG WR GR VR´189 WKH JUDQGIDWKHU¶V SURPLVH WR
SD\LQ5LFNHWWVY6FRWKRUQGLVFXVVHGLQ6HFWLRQ,,,$HQDEOHGKLV
JUDQGGDXJKWHU WR HLWKHU FRQWLQXH RU TXLW ZRUNLQJ DV VKH ZLVKHG 190  7KH
6XSUHPH &RXUW RI 1HEUDVND HQIRUFHG WKH JUDQGIDWKHU¶V SURPLVH HYHQ
WKRXJK WKH JUDQGIDWKHU GLG QRW UHTXLUH KLV JUDQGGDXJKWHU WR TXLW LQ
H[FKDQJH IRU KLV SURPLVH 191  7KHUHIRUH DV LQ 5LFNHWWV WKH FRXUW ZRXOG
KDYHHQWHUWDLQHGDQDIILUPDWLYHFODLPRISURPLVVRU\HVWRSSHORQEHKDOIRI
WKHZLIHLQ&RPEHY&RPEHWRGHWHUPLQHZKHWKHUIRUHVHHDEOHUHOLDQFHE\
WKHZLIHFUHDWHGDQLQMXVWLFH WKDWZDUUDQWHGDUHPHG\IRUGDPDJHV
7KHUHIHUHQFHWRDQLPSOLHGUHTXHVWLQ &RPEHY&RPEHVHHPVPRUH
FRQVLVWHQW ZLWK WKH $PHULFDQ FRQFHSW RI LPSOLHG-LQ-IDFW REOLJDWLRQV VXFK
DV DQ REOLJDWLRQ WR XVH UHDVRQDEOH HIIRUWV LQIHUUHG IURP DOO WKH
FLUFXPVWDQFHVHYHQ WKRXJK QRW GLUHFWO\ H[SUHVVHG E\ WKH SDUWLHV192  6XFK
DQLPSOLFDWLRQ LVQRWLQYHQWHGWRFUHDWHDILFWLRQEXWLQVWHDGLVJURXQGHGLQ
IDFWVVXSSRUWHGE\REMHFWLYHHYLGHQFH193 ,QGHHGHYHQ+ROPHV¶VUHVWULFWLYH
FRQFHSWRIUHFLSURFDOLQGXFHPHQWDSSHDUVWREHFRQVLVWHQWZLWKWKLVVRUWRI
LPSOLFDWLRQ EHFDXVH+ROPHV UHIHUUHG WR LQGXFHPHQW DV WKH ³FRQYHQWLRQDO´
PRWLYDWLRQIRUDSURPLVH 194 9LHZHGLQWKLVOLJKWWKHSRVVLELOLW\RIILQGLQJ
DQLPSOLHGUHTXHVWIRUDQDFWLRQ RUIRUEHDUDQFHLQH[FKDQJHIRUDSURPLVH
GRHV QRW FORVH WKH JDS EHWZHHQ (QJOLVK DQG $PHULFDQ ODZ RQ ZLHOGLQJ
SURPLVVRU\ HVWRSSHODVDVZRUGUDWKHUWKDQPHUHO\LQWHUSRVLQJ LWDVDVKLHOG

 )LOOLQJ WKH*DS(QJOLVK 5HFRJQLWLRQ RI3URPLVHV8QGHU'HHG

3HUKDSV WKH EHVW H[SODQDWLRQ IRU WKH GLYHUJHQW DSSURDFKHV WR


SURPLVVRU\ HVWRSSHO LQ (QJODQG DQG WKH 8QLWHG 6WDWHV LV WKH FRQWLQXHG
UHFRJQLWLRQ LQ (QJODQG RI WKH HTXLYDOHQW RI WKH DQFLHQW DFWLRQ RI
FRYHQDQW 195  %HFDXVH (QJOLVK ODZ FRQWLQXHV WR HQIRUFH D JUDWXLWRXV
SURPLVHLILWVDWLVILHVWKHIRUPDOLWLHVRIDGHHGWKH(QJOLVKFRXUWVOLNHO\IHOW
OHVV SUHVVXUH WR UHFRJQL]H DQ DIILUPDWLYH FDXVH RI DFWLRQ IRU SURPLVVRU\
HVWRSSHOWKDQLQWKH8QLWHG6WDWHVZKHUHWKHHDUO\FRPPRQODZDFWLRQIRU
                                                                                                                                 
189
,GDW 'HQQLQJ/- 
190
5LFNHWWVY6FRWKRUQ1: 1HE 
191
,GDW
192
:RRGY/XF\/DG\'XII-*RUGRQ1( 1< 
193
(J:RRGY/XF\1(DW LQIHUULQJDQREOLJDWLRQWRXVHUHDVRQDEOHHIIRUWVIURPWKHQDWXUH
RIWKHSODLQWLII¶VEXVLQHVVDVVWDWHGLQWKHUHFLWDOVDQGIURPWKHLPSRUWRIRWKHUULJKWVDQGREOLJDWLRQV
H[SUHVVHGLQWKHFRQWUDFW 
194
+2/0(6VXSUDQRWHDW
195
6HH6,03 621 VXSUDQRWH&25%,1 VXSUDQRWH EULHIO\GLVFXVVLQJWKHDWWULEXWHVRIWKLVHDUO\
IRUPRIDFWLRQ 
 
116 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

HQIRUFHPHQWRIDSURPLVHLQDVHDOHGZULWLQJKDGEHHQDEDQGRQHGRUHURGHG
LQPRVWVWDWHV196 
7KHDFWLRQRIFRYHQDQWLQ(QJOLVKFRPPRQODZKDVHYROYHGRYHUWKH
FHQWXULHV UHTXLULQJ DW RQH WLPH D ZULWWHQ SURPLVH LGHQWLI\LQJ WKH SDUWLHV
DXWKHQWLFDWHG E\ D VHDO DQG GHOLYHUHG WR WKH SURPLVHH 197  7KH PRGHUQ
HTXLYDOHQWRIWKLVDFWLRQ LQ(QJODQG LVDSURPLVHVHWIRUWK LQDGHHG³>D@
µGHHG¶ LV D IRUPDO GRFXPHQW ZKLFK FDQ EH XVHG WR PDNH D XQLODWHUDO
JUDWXLWRXV SURPLVHRUDELODWHUDO FRQWUDFWELQGLQJ ´198
$VWDWXWHHQDFWHGLQFODULILHVWKDWDQLQGLYLGXDOQRORQJHUQHHGV
DVHDOWRH[HFXWHDGHHG199 ,QVWHDGDZULWWHQLQVWUXPHQWFRQVWLWXWHVDGHHG
LI³LWPDNHVLWFOHDURQLWVIDFHWKDWLWLVLQWHQGHGWREHDGHHG´200 DQGLIWKH
SURPLVRUVLJQVLWLQWKHSUHVHQFHRIDQDWWHVWLQJZLWQHVVDQGWKHQGHOLYHUVLW
WRWKHSURPLVHH201 7KRXJKDVHDOLVQRORQJHUQHFHVVDU\HQIRUFHPHQWRID
SURPLVHXQGHUGHHGUHVWVVTXDUHO\RQWKHIRUPDOLW\RIH[HFXWLRQUDWKHUWKDQ
RQ DQ\ VXEVWDQWLYH UHTXLUHPHQW  ³$ FRQWUDFW PDGH E\ GHHG GHULYHV LWV
YDOLGLW\ QHLWKHU IURP WKH IDFW RI WKH DJUHHPHQW QRU EHFDXVH LW LV DQ
H[FKDQJHEXWVROHO\ IURPWKHIRUPLQZKLFKLWLVH[SUHVVHG´ 202
$QLQHWHHQWKFHQWXU\(QJOLVKFDVH0RUOH\Y%RRWKE\H[SODLQVWKDW
WKHIRUPDOLW\RIDGHHGSHUIRUPVWKHJDWHNHHSLQJIXQFWLRQRIFRQVLGHUDWLRQ
HTXDOO\ ZHOO

7KH FRPPRQ ODZ SURWHFWHG PHQ DJDLQVW LPSURYLGHQW


FRQWUDFWV ,I WKH\ ERXQG WKHPVHOYHV E\ GHHG LW ZDV
FRQVLGHUHGWKDWWKH\PXVWKDYHGHWHUPLQHGXSRQZKDWWKH\
ZHUH DERXW WR GR EHIRUH WKH\ PDGH VR VROHPQ DQ
HQJDJHPHQW DQG WKHUHIRUH LW ZDV QRW QHFHVVDU\ WR WKH
YDOLGLW\ RI WKH LQVWUXPHQW WKDW DQ\ FRQVLGHUDWLRQ VKRXOG
DSSHDU RQ LW ,Q DOO RWKHU FDVHV WKH FRQWUDFW ZDV LQYDOLG
XQOHVV WKH SDUW\ PDNLQJ WKH SURPLVH ZDV WR REWDLQ VRPH
DGYDQWDJHRUWKHSDUW\WRZKRPLWZDVPDGHZDVWRVXIIHU
                                                                                                                                 
196
6HH.HQQHG\VXSUDQRWH
197
+ROPHVVXSUDQRWHDW-
198
-RKQ&DUWZULJKW3URWHFWLQJ/HJLWLPDWH([SHFWDWLRQVDQG(VWRSSHOLQ(QJOLVK/DZ5HSRUWWRWKH
;9,,WK,QW¶O&RQJRI&RPS/ -XO\ (/(&-&203/DW 'HF DYDLODEOHDW
KWWSZZZHMFORUJDUW-SGI ODVWYLVLWHG-XO\ 
199
/DZRI3URSHUW\ 0LVF3URY $FWFK† (QJ  ³$Q\UXOHRIODZZKLFKUHTXLUHVDVHDO
IRUWKHYDOLGH[HFXWLRQRIDQLQVWUXPHQWDVDGHHGE\DQLQGLYLGXDOLVDEROLVKHG VHH-
%($7621  $1621¶ 6/$:2)&2175$&7 Q 2[IRUG8QLY3UHVV  DEROLWLRQRIWKHVHDODSSOLHV
WRDOOGHHGVDQGQRWMXVWWRWKRVHUHODWLQJWRODQG 
200
,G†
201
,G† DOVRDOORZLQJVLJQLQJE\DQDJHQWLQWKHSURPLVRU¶VSUHVHQFHLIDWWHVWHGE\WZRZLWQHVVHV
DQGGHOLYHU\E\DQDXWKRUL]HGDJHQW 
202
%($7621 VXSUDQRWHDW
No. 2 Cause Consideration Prom issory Estoppel 117

VRPHLQFRQYHQLHQFHLQFRQVHTXHQFHRIWKHRQHPDNLQJRU
WKHRWKHUDFFHSWLQJVXFKSURPLVH 203

,QWKH8QLWHG6WDWHVKRZHYHUWKHFHUHPRQ\DQGIRUPDOLW\RIWKHVHDO
RUWKHGHHGGLPLQLVKHGLQFXOWXUDOPHDQLQJDQGUHOHYDQFH204 OHDGLQJWRWKH
JUDGXDO GLOXWLRQ RI WKHVH IRUPDOLWLHV 205 DQG HYHQWXDOO\ WKHLU ZLGHVSUHDG
UHMHFWLRQDVDEDVLVIRUHQIRUFHPHQW206 7KHODWHFRQWUDFWVVFKRODU($OODQ
)DUQVZRUWK RQFH ODPHQWHG WKDW ³>L@Q UHWURVSHFW WKH DEROLWLRQ RI WKH VHDO
ZLWKRXWWKHVXEVWLWXWLRQRIVRPHRWKHUIRUPDOLW\VHHPVUDVK´207 $IWHUDOOD
PHWKRG IRU HQVXULQJ WKH HQIRUFHDELOLW\ RI D JUDWXLWRXV SURPLVH PD\
LQFUHDVH RYHUDOO XWLOLW\ ZKHQ WKH SURPLVHH GHVLUHV DVVXUDQFH WKDW WKH
SURPLVH ZLOO EH SHUIRUPHG DQG WKH SURPLVRU GHVLUHV KLV SURPLVH WR KDYH
WKHDGGHGYDOXHWKDWFRPHVZLWKDVVXUDQFHWKDWLWLVOHJDOO\ HQIRUFHDEOH 208 
0RUH WKDQ D IHZ VFKRODUV KDYH MRLQHG WKH FDOO IRU WKH UHWXUQ RI WKH
VHDOHG LQVWUXPHQW RU VLPLODU IRUPDOLWLHV DV D PHDQV RI PDNLQJ JUDWXLWRXV
SURPLVHV HQIRUFHDEOH LQ WKH 8QLWHG 6WDWHV 209  %XW D SURSRVHG XQLIRUP
VWDWXWHWKDWZRXOGHQIRUFHZULWWHQSURPLVHVLIDFFRPSDQLHGE\DVWDWHPHQW
RILQWHQWLRQWREHOHJDOO\ERXQGKDVJDLQHGOLWWOHWUDFWLRQ210 $Q\PRYHPHQW
IRU UHWXUQ RI WKHVHDO LQ WKH 8QLWHG 6WDWHV KDV PHW WKH UHDOL]DWLRQ WKDW WKH
FHUHPRQ\ RI WKH VHDO QR ORQJHU UHVRQDWHV LQ $PHULFDQ VRFLHW\  6XFK
PRYHPHQWVKDYHDOVRDSSDUHQWO\IRXQGHUHGRQPRUHVXEVWDQWLYHREMHFWLRQV
VXFK DV 0HOYLQ (LVHQEHUJ¶V DUJXPHQWV WKDW HQIRUFHPHQW RI JUDWXLWRXV
SURPLVHV LQ WKH DEVHQFH RI UHOLDQFH ZRXOG GHPHDQ WKHZRUOG RI JLIWV DQG

                                                                                                                                 
203
0RUOH\Y%RRWKE\>@(5%LQJ &UW&RPP3OHDV 
204
6HH(ULF0LOOV+ROPHVVXSUDQRWHDW ³WKHIDFWWKDWIRUPDOLWLHVQRZPHHWZLWKGLVUHVSHFWDQG
ULGLFXOHVKRZVWKHH[WHQWWRZKLFKFXVWRPFKDQJHVRYHUWLPH´ 
205
,GDW-
206
6XSUD.HQQHG\VXSUDQRWH
207
($OODQ)DUQVZRUWK3URPLVHVWR0DNH*LIWV$0-&203/  VHHDOVR&DODPDUL
3HULOORVXSUDQRWH†DW UHJUHWWLQJWKDWSXUHO\QRPLQDOFRQVLGHUDWLRQLVQRWHIIHFWLYH
XQGHUPRGHUQEDUJDLQHG-IRUH[FKDQJHWKHRU\EHFDXVH³WKHUHRXJKWWREHDZD\WRPDNHDJUDWXLWRXV
SURPLVHELQGLQJDEVHQWWKHPHFKDQLVPRIDVHDO´ 
208
6HH)DUQVZRUWK3URPLVHVVXSUDQRWHDW-5LFKDUG$3RVQHU*UDWXLWRXV3URPLVHVLQ
(FRQRPLFVDQG/DZ-/(*$/678'   
209
6HHHJ)DUQVZRUWK3URPLVHVVXSUDQRWHDW+ROPHVVXSUDQRWHDW--
5DQG\(%DUQHWW$&RQVHQW7KHRU\RI&RQWUDFW&2//5(9--  &HOLD
7D\ORU0\0RGHVW3URSRVDO677 +20$6/5(9   KXPRURXVO\DGYRFDWLQJIRUDUHWXUQ
WRWKHODZRIVHDOHGLQVWUXPHQWVVRWKDWMXGJHVDWWRUQH\VDQGDFDGHPLFVFDQUHDOORFDWHWKHLUWLPHIURP
GUDZLQJSX]]OLQJGLVWLQFWLRQVLQFRQVLGHUDWLRQGRFWULQHDQGGHEDWLQJWKHPHULWVRIHQIRUFLQJJUDWXLWRXV
SURPLVHV 
210
)DUQVZRUWK3URPLVHVVXSUDQRWHDW(ULF0LOOV+ROPHVVXSUDQRWHDW-
 
118 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

ZRXOG LJQRUH D PRUDO REOLJDWLRQ RI WKH SURPLVHH WR UHOHDVH D SURPLVRU
ZKRVHPLQG KDVFKDQJHG 211
$VDUHVXOWDOWKRXJKERWKFRPPRQODZFRXQWULHVUHFRJQL]HGWKHQHHG
IRU HQIRUFHPHQW RI VRPH SURPLVHV XQVXSSRUWHG E\ FRQVLGHUDWLRQ ERWK
FRXQWULHV KDYH ILOOHG WKH JDS E\ GLIIHUHQW PHDQV DQ DIILUPDWLYH FDXVH RI
DFWLRQIRUSURPLVVRU\HVWRSSHOLQWKH8QLWHG6WDWHV212 DQGWKHIRUPDOLW\RI
WKHGHHGLQ(QJODQG213

&RQFOXVLRQ

7KHFLYLO ODZFRQFHSWRI FDXVHLVHDVLO\FRQWUDVWHGZLWKWKHFRPPRQ


ODZ GRFWULQH RI FRQVLGHUDWLRQ EHFDXVH RQO\ WKH IRUPHU LV VDWLVILHG ZLWK D
JUDWXLWRXV SURPLVH PRWLYDWHG VROHO\ E\ D FKDULWDEOH LQWHQW  &RQYHUVHO\
FRQVLGHUDWLRQ UHTXLUHV WKH SURPLVH WR EH OLQNHG LQ DQ H[FKDQJH ZLWK D
UHFLSURFDOSURPLVHRUSHUIRUPDQFH
7KH UHVWULFWLYH QDWXUH RI FRQVLGHUDWLRQ KRZHYHU KDV SURYHG
XQVDWLVIDFWRU\DVWKHVROHWHVWIRUVHSDUDWLQJSURPLVHVGHVHUYLQJRI MXGLFLDO
HQIRUFHPHQW IURP WKRVH OHIW WR WKH GLFWDWHV RI LQGLYLGXDO FRQVFLHQFH
&RQVHTXHQWO\ FRPPRQ ODZ FRXUWV KDYHVXSSOHPHQWHG FRQVLGHUDWLRQ ZLWK
SURPLVVRU\ HVWRSSHO DV LW LV FDOOHG LQ WKH 8QLWHG 6WDWHV  D GRFWULQH WKDW
                                                                                                                                 
211
0HOYLQ$URQ(LVHQEHUJ7KH:RUOGRI&RQWUDFWDQGWKH:RUOGRI*LIW&$//5(9  
&RQJUHJDWLRQ.DGLPDK7RUDV-0RVKHY'H/HR0DVV1(G   UHMHFWLQJ
5HVWDWHPHQW†  ¶VDEDQGRQPHQWRIUHTXLUHGSURRIRIUHOLDQFH )DUQVZRUWK3URPLVHVVXSUDQRWH
DW-†   UHSUHVHQWV³DQH[SDQVLRQWKDWLVGLIILFXOWWRUDWLRQDOL]H´DQG³KDVSOD\HGWR
PL[HGUHYLHZV´ 
212
6RPHVWDWHVLQWKH86DOVRHQIRUFHDSURPLVHPDGHLQUHFRJQLWLRQRIDPRUDOREOLJDWLRQDULVLQJRXW
RIDSDVWDFWLQFHUWDLQQDUURZIDFWSDWWHUQV6HHHJ:HEEY0F*RZLQ6R $OD&W$SS
 7KLVWKHRU\KRZHYHULVVWLOOUHMHFWHGLQPDQ\VWDWHVPD\EHVWLOOWKHPDMRULW\RIWKHP6HH
.(9,107((9(13520,6(62135,252%/,*$7,216$7&20021/$:-   PRUDO
REOLJDWLRQWKHRU\ZDVVWLOODPLQRULW\DSSURDFKLQ 7 KXVWKHDIILUPDWLYHFDXVHRIDFWLRQLQ
SURPLVVRU\HVWRSSHOLVVXEVWDQWLDOO\PRUHVLJQLILFDQWWKDQPRUDOREOLJDWLRQLQGHVFULELQJGLYHUJHQFHV
EHWZHHQ(QJOLVKDQG86ODZLQHQIRUFHPHQWRISURPLVHV
213
%HDWVRQVXJJHVWVDQRWKHUZD\LQZKLFK(QJOLVKFRXUWVPD\RXWVWULSWKH86FRXUWVLQSHUPLWWLQJ
IRUPDOLW\WRRYHUFRPHVXEVWDQWLYHUHTXLUHPHQWV7 KHGLVLQFOLQDWLRQRI(QJOLVKFRXUWVWRLQTXLUHLQWRWKH
DGHTXDF\RIFRQVLGHUDWLRQPHDQVWKDW³WKHUHTXLUHPHQWFDQEHVDWLVILHGE\QRPLQDOFRQVLGHUDWLRQ´
%($7621 VXSUDQRWHDW%XW%HDWVRQDGPLWVWKDWWKHFRQVLGHUDWLRQPXVWEH³RIVRPHYDOXHLQ
WKHH\HRIWKHODZ´DQGWKHFDVHV%HDWVRQDQDO\]HVVXJJHVWWKDWWKLV³YDOXH´LVPHDVXUHGE\ZKHWKHUWKH
RWKHUSDUW\ZDVLQGXFHGE\WKHVXSSRVHGO\QRPLQDOFRQVLGHUDWLRQHJLG TXRWLQJDQ(QJOLVKFRXUW¶V
ILQGLQJWKDWWKH³SODLQWLIIVZHUHLQGXFHGE\WKHGHIHQGDQW¶VSURPLVH´ )RUWKHPRVWSDUWWKLVLVWKH
VDPHWHVWDSSOLHGLQWKH8QLWHG6WDWHV5,&+$5'$/25': ,//,672121&2175$&76†DW-
 WKHG  ZKHWKHUDVPDOOVXPLVFRQVLGHUDWLRQRUDVKDPWXUQVRQZKHWKHU³WKHSURPLVRULVLQ
IDFWEDUJDLQLQJIRUWKHVPDOOVXP´ 7KXVXQOHVV(QJOLVKFRXUWVDUHVXEVWDQWLDOO\PRUHH[SDQVLYHLQ
ILQGLQJUHFLSURFDOLQGXFHPHQWLQPDUJLQDOFDVHVQRPLQDOFRQVLGHUDWLRQLVQRWDVLJQLILFDQWDGGLWLRQDO
ZD\LQZKLFKIRUPDOLW\SOD\VDODUJHUUROHLQ(QJODQGWKDQLQWKH867 KLVFRQFOXVLRQLVXQGHUVFRUHG
E\WKHZLOOLQJQHVVRIVRPHFRXUWVLQWKH86WRUHFRJQL]HDELQGLQJRSWLRQFRQWUDFWEDVHGRQWKH
IRUPDOLW\RIVWDWLQJWKHRIIHULQDVLJQHGZULWLQJWKDW³UHFLWHVDSXUSRUWHGFRQVLGHUDWLRQIRUPDNLQJWKH
RIIHU´DQGSURSRVHVDIDLUH[FKDQJH5(67$7(0(17 6(&21' 2)&2175$&76†  D   
No. 2 Cause Consideration Prom issory Estoppel 119

HYROYHGLQWKHODWHQLQHWHHQWKDQGHDUO\WZHQWLHWKFHQWXULHVIURPWUDGLWLRQDO
HVWRSSHO EDVHG RQ UHSUHVHQWDWLRQ RI IDFW 7KH GRFWULQH RI SURPLVVRU\
HVWRSSHO SHUPLWV FRXUWV WR JUDQW UHOLHI IRU D SURPLVHH¶V UHOLDQFH RQ D
JUDWXLWRXVSURPLVHLQVRPHFLUFXPVWDQFHV
$FFRUGLQJO\WKHDGGLWLRQRISURPLVVRU\HVWRSSHOWRWKHFRPPRQ ODZ
DUVHQDOFDQQDUURZWKHJDSEHWZHHQWKHFLYLOODZDQGFRPPRQODZJURXQGV
IRUHQIRUFLQJSURPLVHV,URQLFDOO\WKHDGGLWLRQRIWKHGRFWULQHDOVRUHYHDOV
DGLYHUJHQFHEHWZHHQFRPPRQ ODZRQHLWKHUVLGHRIWKH$WODQWLFRQHWKDW
ULYDOV WKH JDS EHWZHHQ FDXVH DQG FRQVLGHUDWLRQ  2Q ERWK FRQWLQHQWV
HVWRSSHO KDV SURJUHVVHG EH\RQG LWV WUDGLWLRQDO IRUP E\ SURWHFWLQJ UHOLDQFH
RQDSURPLVHRIIXWXUHDFWLRQUDWKHUWKDQ MXVWDUHSUHVHQWDWLRQRIH[LVWLQJ
IDFW  ,Q (QJODQG KRZHYHU SURPLVVRU\ HVWRSSHO UHWDLQV D WUDGLWLRQDO
OLPLWDWLRQ,QPRVWFRQWH[WVSURPLVVRU\HVWRSSH OIXQFWLRQVRQO\DVDVKLHOG
DJDLQVW WKH SURPLVRU¶V DVVHUWLRQ RI D FODLP  ,Q FRQWUDVW SURPLVVRU\
HVWRSSHOLQPRVW86MXULVGLFWLRQVFDQDOVRIXQFWLRQDVDVZRUGWRDGYDQFH
DQDIILUPDWLYHFDXVHRIDFWLRQ
7KLVGLYHUJHQFHZRXOGQRW EHWKHILUVWWLPHWKDWWKHIRUPHUFRORQLHV
ERUURZHGDFRQFHSWIURPWKHLUFRPPRQODZSDUHQWDQGWKHQIDLOHGWRKHHG
SDUHQWDO FRXQVHOV RI UHVWUDLQW  )RU H[DPSOH MXU\ WULDOV DUH QRZ WKH
H[FHSWLRQ LQ FLYLO FDVHV LQ (QJODQG 214  &LYLO FDVHV LQ WKH 8QLWHG 6WDWHV
KRZHYHUDVLGHIURPHTXLWDEOHFODLPVDQGGHIHQVHVJHQHUDOO\DUHVWLOOWULHG
EHIRUHMXULHV215
3HUKDSV D FHUWDLQ H[XEHUDQFH XQLQKLELWHG QDWXUH RU VLPSOH ODFN RI
FDXWLRQ LQ WKH $PHULFDQ VSLULW VSXUV LW WR WDNH D JRRG LGHD IURP LWV PRUH
UHVWUDLQHGFRPPRQODZSDUHQWDQGWRWHVWWKHOLPLWVRIWKDWLGHD+RZHYHU
LI (QJOLVK FRQVHUYDWLVP KDV UHVWULFWHG LWV DSSOLFDWLRQ RI SURPLVVRU\
HVWRSSHODFRUROODU\FRQVHUYDWLVPKDVILOOHGWKHJDSLQ(QJOLVKHQIRUFHPHQW
RI SURPLVHV WKURXJK UHWHQWLRQ RI WKH PRGHUQ HTXLYDOHQW RI WKH HDUO\
FRPPRQODZDFWLRQRIFRYHQDQWWKHSURPLVHXQGHUGHHG
,URQLFDOO\ WKH (QJOLVK FRPPRQ ODZ RQ HQIRUFHPHQW RI SURPLVHV
DUJXDEO\ KDV PRUH LQ FRPPRQ ZLWK WKH )UHQFK &RGH &LYLO WKDQ ZLWK WKH
FRPPRQ ODZRI(QJODQG¶VIRUPHUFRORQLHV$OWKRXJK)UHQFKODZGRHVQRW
LPSRVHDFRQVLGHUDWLRQUHTXLUHPHQW)UHQFKODZHQIRUFHVERWKSURPLVHVLQ
H[FKDQJHVDQGJUDWXLWRXVSURPLVHVWKDWDUHQRWDUL]HGRURWKHUZLVHH[HFXWHG
                                                                                                                                 
214
6XSUHPH&RXUW$FW†&XUU/DZ6WDW$QQ F -$0(6*2%(57-867,&(
'(02&5$&<$1'7+(-85<   ³>,@QPRGHUQGD\%ULWDLQMXU\WULDOVLQFLYLOFDVHVDUHDUDULW\´ 
215
-DFREY1HZ<RUN86-   GHVFULELQJWKHULJKWWRDMXU\WULDOLQFLYLOFDVHVLQ
IHGHUDOFRXUWDVVR³IXQGDPHQWDODQGVDFUHGWRWKHFLWL]HQ´WKDWLW³VKRXOGEHMHDORXVO\JXDUGHGE\WKH
FRXUWV 1(,/9,'0$5:25/'-85<6<67(06   WKHFLYLOMXU\LVLQH[WULFDEO\ZRYHQLQWR
WKHIDEULFRIWKH$PHULFDQMXVWLFHV\VWHP 
 
120 CHI.-KENT J. INT¶L & COMP. L. Vol. XIII

ZLWK UHTXLUHG IRUPDOLW\ 216  (QJOLVK ODZ GRHV WKH VDPH ZLWKRXW UHTXLULQJ
WKH UHOLDQFH QHHGHG IRU SURPLVVRU\ HVWRSSHO 217  %RWK OHJDO V\VWHPV
UHFRJQL]H WKDW D ZULWWHQ SURPLVH H[HFXWHG ZLWK VROHPQLW\ DQG IRUPDOLW\
VHUYHVWKHJDWH-NHHSLQJIXQFWLRQ±RWKHUZLVHSHUIRUPHGE\FRQVLGHUDWLRQLQ
WKH FRPPRQ ODZ V\VWHP ± RI FDXWLRQLQJ WKH SURPLVRU DJDLQVW PDNLQJ
LPSURYLGHQW FRPPLWPHQWV218  
$V ILUVW-\HDU ODZ VWXGHQWV LQ WKH 8QLWHG 6WDWHV VWUXJJOH ZLWK WKH
FRQFHSW RI FRQVLGHUDWLRQ 219 DQG WKHQ OHDUQ WR DFFHSW LWV FR-H[LVWHQFH ZLWK
SURPLVVRU\ HVWRSSHO 220 WKH\ PLJKW EHQHILW IURP D PRGHVW GRVH RI
FRPSDUDWLYH ODZ LI RQO\ WR DSSUHFLDWH WKH QRQ-LQHYLWDELOLW\ RI WKH SDWK RI
WKHFRPPRQODZLQWKH8QLWHG6WDWHV 221 6WXGHQWVOLNHO\ZLOOEHHQOLJKWHQHG
E\WKHGLIIHUHQFHVLQWKHDSSURDFKHVRIWKHFRPPRQ ODZFRXQWULHVDVZHOO
DVVXUSULVHGE\WKHVLPLODULW\RIUHVXOWV LQWKHSDUHQWFRPPRQ ODZFRXQWU\
DQGWKHKRPHRIWKHTXLQWHVVHQWLDO FLYLO FRGH

                                                                                                                                 
216
6XSUDQRWHV-DQGDFFRPSDQ\LQJWH[W
217
6XSUDQRWHV-DQGDFFRPSDQ\LQJWH[W GLVFXVVLQJ(QJOLVKGRFWULQHRQSURPLVHVXQGHUGHHGDV
DQDOWHUQDWLYHWRFRQVLGHUDWLRQ %($7621VXSUDQRWHDW
218
6HHVXSUDQRWHV-DQGDFFRPSDQ\LQJWH[W WKH(QJOLVKGHHGLVDPDWWHURIIRUPWKDWSHUIRUPVD
FDXWLRQDU\IXQFWLRQPDNLQJFRQVLGHUDWLRQXQQHFHVVDU\ 1,&+2/$6VXSUDQRWHDW-
VXJJHVWLQJDVLPLODULW\EHWZHHQWKH(QJOLVKGHHGDQG)UHQFKQRWDUL]DWLRQRIGRQDWLYHSURPLVHVH[FHSW
WKDWWKHODWWHUGRHVQRWVXEVWLWXWHIRUFRQVLGHUDWLRQDQGQRWLQJWKDWQRWDUL]DWLRQSURPRWHVERWKFHUWDLQW\
DQGFDXWLRQ 
219
3URIHVVRU7D\ORUKXPRURXVO\FDOOVIRUUHWXUQRIWKHVHDOHGLQVWUXPHQWDIWHU³KDYLQJEHHQZHDULHGIRU
PDQ\\HDUVZLWKGHEDWLQJFRPSOH[FRQIXVLQJDQGFRQWUDGLFWRU\SRVLWLRQVDQGWKHRULHVUHJDUGLQJWKH
FRQVLGHUDWLRQGRFWULQHDQGLWVLPSDFWRQDJUHHPHQWVW KDWGRQRWILWQHDWO\ZLWKLQWKHEDUJDLQHG-IRU-
H[FKDQJHSDUDGLJPDQGDWOHQJWKXWWHUO\GHVSDLULQJRIVXFFHVVLQPDNLQJVHQVHRIWKHWRSLF´7D\ORU
VXSUDQRWHDW
220
&RPSDUH*5$17*,/025(7+('($7+2)&2175$&7-   DUJXLQJWKDWFRQVLGHUDWLRQDQG
SURPLVVRU\HVWRSSHOUHSUHVHQW³PDWWHU´DQGDQWL-PDWWHU´DQGUHIOHFW³VFKL]RSKUHQLD´LQWKHILUVW
5HVWDWHPHQW ZLWK*$5<:$77(48,7<67,55,1* 7+(6725<2)-867,&(%(<21'/$:  
DUJXLQJWKDWOHJDODQGHTXLWDEOHGRFWULQHVFDQZRUNWRJHWKHUKDUPRQLRXVO\LQ³FRQVWUXFWLYH
RSSRVLWLRQ´MXVWDVRQHKDQGSXVKHVDJDLQVWWKHERZZKLOHWKHRWKHUKDQGSXOOVRQWKHERZVWULQJ 
221
7 KLVDXWKRUIRUH[DPSOHLQFOXGHVWKHVXEVWDQFHRIWKHFRPSDUDWLYHDQDO\VLVLQWKLVDUWLFOHLQKLV
ILUVW-\HDU&RQWUDFWVHOHFWURQLFFDVHERRN&+$5/(65&$//(526&2175$&76&$6(67(;7$1'
3 52%/(06--  

You might also like