Exam 12: Consideration

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Agency, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

Sean promises to pay his personal assistant Terry $50,000 in consideration of the services she provided over the years. Sean never makes the payment. Sean's promise is

Adequacy of consideration refers to "how much" consideration is given.

Situations in which agreements lack consideration include those involving a preexisting duty.

Allen promises to pay Barb, his niece, $5,000 if she obtains her degree at City University, where she is in her third year. Barb graduates. Allen must pay Barb because

Excavation Inc. begins digging a foundation for Financial Investment Company under a contract for a certain price. After six months, Excavation demands a higher price because of extraordinary difficulties that were totally unforeseen at the time the contract was formed. An agreement to pay the higher price is

Normally, a court will evaluate the adequacy of consideration based solely on the comparative value of the things exchanged as part of agreement.

Consideration refers to the time that a party takes to evaluate a deal.

To constitute consideration, there must be

Painting a garage can constitute "something of legally sufficient value."

Cloud Storage Inc. promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is

Exceptions to the preexisting duty rule include unforeseen difficulties.

Sports Bar and Tasty Bakery are adjacent businesses with adjoining parking lots. Sports Bar offers Tasty a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot. The discount is legally sufficient consideration

A preexisting duty may be imposed by law.

Onsite Restoration Inc. begins renovating houses for Property Company under a contract for a stated amount per house. After six months, Onsite demands an extra $20,000 per house, stating no reason for the extra $20,000, but asserting that it will stop work if it is not paid. The agreement is

If a person expresses contract terms with such uncertainty that the terms are not definite, the promise is illusory but the deal is enforceable.

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

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

An accord and satisfaction is an agreement in which one party gives up the right to pursue a legal claim against another party.

Under a contract with Soybean Farms, Tai begins grading a terraced hillside for planting. Halfway through the project, Tai asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." The farm agrees but later refuses to pay. The agreement to pay more is