Share equally the profits and losses realized in venture

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Reference no: EM132138690

Daniyal Chawla ordered a shipment of coffee from Brazil. The coffee was due to arrive shortly in New York, and he expected to sell it for a profit. He then entered into an agreement with Bachman whereby they mutually promised to share equally the profits and losses realized in the venture. Chawla paid $40,000 for the coffee, but was unable to sell it for more than $24,000. Bachman refused to abide by the agreement, and Chawla sued her to recover $8,000. Bachman’s defense was no consideration. Judgment for whom and why? Would the decision be different if prior to Chawla’s purchase of the coffee, Chawla and Bachman agreed that Chawla would repay money that he had borrowed from Bachman the year before by equally sharing the profits from reselling the coffee he had purchased in Brazil two months earlier. Chawla makes a $10,000 profit selling the coffee. Do Chawla and Bachman have a binding contract to share the profits?

Reference no: EM132138690

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