August 28, 2009
Another Blood Contract
We reported earlier this year about a contract written in blood. In that case, Plaintiff Kim opened his appellate brief with the statement, "Blood may be thicker than water, but here it's far weightier than a peppercorn." Both at the trial and appellate level, California's courts disagreed and refused to enforce a gratuitous promise, even if memorialized in the defendant's blood.
Perhaps business schools ought to develop a course called Blood and Contracts, because today's New York Times reports on another blood contract. According to the Times, the Chief Financial Officer of Stanford Financial asserts in a plea agreement that his boss, R. Allen Stanford, and the chief regulator of his Antigua Bank swore a "blood oath" by cutting their wrists and mixing their blood in a "brotherhood ceremony." Unlike the Kim case, however, here other consideration is alleged. The bank regulator allegedly received Super Bowl tickets and regular bribe payments from a Swiss bank account. In return, he is alleged to have ensured that regulatory bodies in Antigua would not interfere with what is now being described as a $7 billion international Ponzi scheme.
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