In 1988, the Upper Deck Company was a baseball card company with an idea for a better baseball card: one that had a hologram on it. By the 1990s, Upper Deck was a major corporation whose value was at least a quarter of a billion dollars. In 1988, however, the outlook wasnâ€™t bright for Upper Deck, which lacked the funds for a $100,000 deposit it needed to buy some special paper by August 1. Without that deposit, its contract with the Major League Baseball Players Association would have been jeopardized.
Upper Deckâ€™s corporate attorney, Anthony Passante, Jr., loaned the company the money. That evening, the directors of the company accepted the loan and, in gratitude, agreed to give Passante 3 percent of the firmâ€™s stock. Passante never sought to collect the gift of stock, and later the company reneged on its promise. Passante sued for breach of oral contract.1
- If you were on the jury, how would you decide the case? (The law of consideration will determine the outcome.) Was the offer of 3 percent of the firmâ€™s stock legal consideration for the loan? Or was it a mere gift?
- Does Upper Deck have a moral obligation to give Passante the stock? If so, is this legally enforceable?