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Exam 10: Consideration

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Question 21

Multiple Choice

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Sam offers Tiffany $10,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely

A) enforce the deal after questioning the adequacy of consideration.
B) not question the adequacy of the consideration.
C) rewrite the deal after questioning the adequacy of consideration.
D) set aside the deal after questioning the adequacy of consideration.

E) None of the above
F) A) and B)

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Question 22

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Just because a party has made a promise means the promise is enforceable.

A) True
B) False

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Question 23

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Apps Inc. promises to give stock options to Belden, a creative coder, for processes he has already designed. This promise is

Jen promises to pay Kay $500 because "she does not have as much money as other people." Jen's promise is

A transaction that lacks a bargained-for exchange does not lack an element of consideration.

Exceptions to the preexisting duty rule include rescission.

Fact Pattern 10 - 3 Best Restoration, Inc., begins renovating houses for City Edge Property Company under a contract for a stated amount per house. After six months, Best demands an extra $20,000 per house. City Edge agrees to pay. Refer to Fact Pattern 10 - 3. Suppose Best offers no reason for the extra $20,000, but asserts that it will stop work if it is not paid. The agreement is

A contract that one party retains the exclusive right to cancel at any time is unenforceable.

Gwen is indebted to Home Loan Company for $75,000. Gwen agrees to pay, and Home Loan agrees to accept, a lesser amount than the lender originally claimed was owed. The performance of this agreement is

A preexisting duty may be imposed by law.

While sailboarding, Jolie is injured when Kirby carelessly crosses her path. Kirby's insurance company offers Jolie $50,000 to release Kirby from liability, and she accepts. Later, she learns that her injuries are more serious than she realized. The release is

A promise to do what one already has a legal duty to do constitutes legally sufficient consideration.

Fact Pattern 10-4  Rex contracts with Spicy Pizza to deliver its products. Later, both parties inform each other that they would like to cancel the contract. Refer to Fact Pattern 10-4. The contract between Rex and Spicy is completely rescinded. Later, Rex offers to make a new deal to deliver Spicy's products. Spicy is willing to deal, but for a new price. Rex and Spicy

A promise made in return for an act or event that has already taken place is unenforceable.

To pay on receipt of certain goods is "something of legally sufficient value."

To be legally sufficient, consideration must be something of value in the eyes of the law.

Parties are not usually free to bargain as they wish.

Providing accounting services is "something of legally sufficient value."

Dean, the president of Billing & Credit Company, promises to pay his employee Ewing, who is dangerously obese, $10 for every pound that he loses within the next eleven months. Ewing agrees, diets and exercises, loses 154 pounds, and asks Dean for $1,540. Dean refuses to pay, saying that he does not remember the promise, but that even if he did make it, there was no consideration, and Ewing's improved health is a sufficient benefit for his effort and sacrifice. Ewing files a suit against Dean. In whose favor is the court likely to rule, and why?

Promissory estoppel requires that justice will be better served by the enforcement of the promise.