The Holmesian Test: Doctrine of Consideration vs Conditions in Bargaining

What is the Holmesian test of "reciprocal conventional inducement, each for the other?" Here, the Holmesian test is used to distinguish whether predicates within a promise in the context of engaging in a bargain induced-under-classification as considerations (i.e., "terms" within a contract) or conditions. This is an important distinction and reveals akin-to-subversive motives when performing business-oriented transactions within contract law.

Why is there an essential distinction between the doctrine of consideration and conditions within a promise? This distinction is present because the property of consideration must be bargained for in exchange for the promise. Here, addressing the issue of enforceability of promises within the context of business transactions and contract law, this distinction of enforceability has to do with "promissory estoppel" within the framework of enforceability in the context of bargaining. Wherein the significance of promissory estoppel is where a traditional contract does not exist between the given parties, promissory estoppel may form the basis of obligation as a means to compel given parties to perform under a specific promise instead of the bargain which had taken place amongst those parties heretofore. Likewise, how is the property of conditions a subversive means to implement "operational" business activity? This is a good question, and to unveil the answer in its actual color, we will evaluate the court case of Pennsy Supply Inc. v. American Ash Recycling Corp. of Pennsylvania -- Pennsylvania Superior Court 895 A.2d 595 (2006).

To provide a brief context, "Pennsy" (i.e., Pennsy Supply Inc.) acquired a product called "AggRite" for no fee from "American Ash" (i.e., American Ash Recycling Corp. of Pennsylvania). AggRite was then used by Pennsy for construction purposes, such as manufacturing and installing pavement for one of their clients. After that, sometime after project completion, the pavement needed to be demoed and replaced due to cracking of that pavement. Instead of this, the AggRite that American Ash provided to Pennsy needed to be removed in that process; AggRite was classified as a hazardous waste material by the Pennsylvania Department of Environmental Protection at that time in which Pennsy performed the environmental cleanup of AggRite. Here, then, one should be pondering as to why American Ash provided AggRite to Pennsy free of charge within their reciprocate business transaction a priori (to provide further context, Pennsy litigated American Ash due to not being compensated for the environmental cleanup of AggRite material from the project mentioned prior; American Ash refused to provide Pennsy with funds in the wake of performing the environmental cleanup). This is because, amongst the interlinks of American Ash's corporate strategy, their "business operational" level of implementing that strategy included the riddance of AggRite from their inventory. Thus, if American Ash were to transact away AggRite from their inventory by providing AggRite to other companies for their business ventures free of charge, American Ash would altogether bypass the requirement of the environmental cleanup financial liability in the wake of removing AggRite from its inventory. This is the reason American Ash supplied Pennsy with AggRite at no cost. It was to get AggRite off American Ash's inventory catalog due to its financial liability of removing AggRite from the said catalog, which, under the Pennsylvania Department of Environmental Protection, would have to pay for environmental cleanup fees.

In short, the Pennsylvania Superior Court sided with American Ash because it did not consider providing funds to Pennsy for the AggRite environmental cleanup liability in the wake of transacting AggRite. That being said, the whole motivation for American Ash providing Pennsy with AggRite free of charge was to bypass the liability of AggRite's environmental cleanup. Therefore, the Pennsylvania Superior Court saw that the fact that Pennsy had to pay for the environmental cleanup of AggRite instead of the project-repair aforementioned was the risk Pennsy assumed when receiving AggRite from American Ash free of charge; the Pennsylvania Superior Court viewed the cleanup of AggRite by Pennsy as a condition of the business transaction with American Ash, and not a consideration by American Ash as a means to assume financial liability for the environmental cleanup which AggRite withheld.

Therefore, since the Pennsylvania Superior Court classified the business transaction between Pennsy and American Ash and the preceding mishaps in the wake of that transaction as a condition of doing business, American Ash is not financially liable; financial liability lies with Pennsy. Wherein the breach of promissory estoppel asserted by Pennsy does not stand because, as previously mentioned, for promissory estoppel to be implemented as a means to compel a party to perform a specified action as dictated within the business transaction, the doctrine of consideration must be bargained for as the exchange for the promise. The assertion of whether promissory estoppel should be applied is unfounded due to a lack of consideration.