Exam 12: Consideration

Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate. -Refer to Fact Pattern 12-2."Adequacy" of consideration refers to

A determination of whether consideration exists depends on a comparison of the values of the things exchanged.

The fact that the word consideration is used in an agreement means,by itself,that consideration has been given.

Maya's motorcycle is damaged in an accident caused by Luc's negligence. Luc agrees to pay Maya $25,000 if she agrees to release him from further liability. Maya agrees. If her damages ultimately exceed $25,000,she can

Dave's uncle tells Dave that if "he feels that Dave deserves it," he will give Dave $1,000 when Dave graduates from college. Dave's uncle's promise is

Aaron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country tunes at select social events for Banquet's payment of a certain amount. To constitute consideration,the value of whatever is exchanged must be

A release bars any further recovery beyond the terms stated in the release.

Even if the terms of a contract express such certainty of performance that the promisor has not definitely promised to do anything,the promise binds the promisor.

For an accord and satisfaction to occur,the amount of a debt must not be in dispute.

Forbearance is the act of refraining from doing something that one has a legal right to do.

Risks ordinarily assumed in business constitute consideration for the modification of a contract.

Sally contracts with Tasty Pizza Company to deliver its products. Both parties change their minds,however,and inform each other that they would like to cancel the contract. -Refer to Fact Pattern 12-3. Sally and Tasty

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

Teatro Restoration,Inc.,begins renovating an old theater for Urban Edge Productions,but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay. -Refer to Fact Pattern 12-4. If Teatro says it is asking for the extra $250,000 because it has encountered extraordinary unforeseen difficulties that will add consid-erable cost to the project,the agreement is

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

An illusory promise is a promise that is enforceable without consideration.

Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate. -Refer to Fact Pattern 12-2. A court is most likely to evaluate the adequacy of consid-era-tion if

A promise made in return for an act or event that has not yet taken place is unenforceable.

A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable.

Quentin questions whether there is consideration for his contract with Rainey to exchange his performance with the Saxophone Symphony for her payment of a certain amount. To constitute consideration,there must be