Exam 12: Consideration

Define a substituted contract and explain how it affects an agreement.

D owes C a past-due undisputed debt of $500. D sees C in a bar and pays him $400. C then says to D, "Forget about the other $100 you owe me. I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.

"Consideration" requires an actual benefit to both sides of an agreement.

Herb promises to give his nephew, Curt, his old TV when the new one he ordered arrives. Explain whether this promise is enforceable, and include in your discussion the concept of "bargained-for exchange."

Which of the following are the two basic elements to consideration?

Howard ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door at $179.99. Howard called the store and demanded the advertised price. If the store says "okay":

Which of the following would most likely be enforceable?

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?

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

The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production. After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.

What transactions are enforceable even though they are not supported by consideration?

In a bilateral contract, if one party is not bound, neither party is bound.

In the case of Denney v. Reppert the court allowed the employees of a bank to collect a reward, because they supplied information that led to the arrest and conviction of a bank robber.

Exclusive dealing contracts are binding because sufficient consideration is present.

An output contract is a special form of an illusory contract.

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

Which of the following is enforceable without consideration?

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.

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

Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct?