Exam 12: Consideration

William agrees to drill a well up to 200-feet deep for John's rural cabin.The contract price is $3,000.After drilling 100 feet, William strikes solid granite rock.He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract.He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price.Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job.However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount.What is the result?

In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit to the promisor.

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.

An illusory promise has the form of a promise but imposes no real obligation.

James promises to pay Brooke $2,500 if she does not sue him for negligently injuring her in a bicycle accident.If Brooke does not sue, James's promise to pay is binding because it is supported by consideration.

Past actions unbargained for by the parties in an agreement can become valid consideration for a contract.

In some states, a contract under seal is binding without consideration.

a.How does Article 2 of the UCC modify the common law of contracts with regard to consideration? b.Explain how output and requirements contracts differ from illusory promises.

A debt is disputed only if both the existence and amount are contested.

Andrew agrees to paint Rosalene's house for $500.Two days after he starts the job, he decides that $500 isn't enough money.He refuses to finish the job, unless Rosalene agrees to pay him $100 more.What principle applies to this fact situation?

Define legal detriment.

The two basic elements to consideration are legal adequacy and a bargained-for exchange.

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise.Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed only to discover that McHenry had awarded the franchise to a large corporation.McHenry claims no liability to Nancy since there was no consideration.Which statement best describes the situation?

Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car.After it was installed, Jack received a bill for $1,200.Jack called the dealer and told him he'd never heard of this service costing more than $500.They argued, but the dealer finally agreed to take $900.Is the agreement enforceable?

Which of the following is enforceable without consideration?

Is a promise to pay a pre-existing moral obligation enforceable? Explain.

Which of the following would most likely be enforceable?

Under the common law, a modification of a preexisting contract must be supported by mutual consideration; under the Code, a contract can be modified without new consideration.