Exam 12: Consideration

The UCC provides that a contract for the sale of goods can be effectively modified without new consideration, provided the modification is made in good faith and both parties intend to modify the contract.

Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road. After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog. Marnie's promise is binding, because there is a bargained-for-exchange.

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.

Jason's mother would like him to go to college, so in June he enrolls at the local university. He also quits his job and tells his mother his plans to take classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Jason's mother's promise is:

Consideration is the inducement to make a promise enforceable.

In a unilateral contract, a promise is exchanged from one party to another for a promise to forbear to act.

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. If Edward agrees:

In DiLorenzo v. Valve & Primer Corporation , the court held:

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

A promisee's consideration is effective only if given directly to the promisor by the promisee.

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.

Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. In this case:

An illusory promise is consideration for a return promise.

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

The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.

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

Wayne helped Hank study all night for an important exam. After Hank got an "A" on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it." There is:

Define consideration.

Ken, a research chemist, has been promised a fellowship with a stipend of $10,000 to do research on synthetic fuel oil. Under the terms of the fellowship, Ken is free to use the money as he sees fit. Ken decides to build his own laboratory, so he will not have to rent one. He hires a carpenter who begins working on shelving and cabinets in the laboratory. Then Ken receives a telegram saying the fellowship has been canceled. No reason is given for the cancellation. If Ken sues, will he be able to collect the money from the foundation which promised the fellowship? Explain your answer using legal terminology.

Jan promises Eli $4,000 for one of his original paintings on the condition that she receives $1 million from her mother's will. Jan's promise: