Exam 12: 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:

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

An agreement to sell the entire production of a particular plant is a requirements contract.

Breton owes Parkerson $750,which is due on June 1.Discuss the sufficiency of consideration if Breton offers Parkerson: (a)$600 in full settlement on June 1 if the debt is undisputed; (b)$600 in full settlement on April 10 if the debt is undisputed; and (c)$500 on June 1 to settle the debt if the amount of the debt is validly disputed.

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.

There are certain transactions that are enforceable without consideration.These include:

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?

Barbara,a wealthy widow,promises the pastor of her church that she will donate $30,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $60,000 mortgage.Other pledges are obtained to pay off the mortgage,but now Barbara has changed her mind and plans to take an around-the-world cruise instead.In this case:

An exclusive dealing contract is one type of contract which is illusory,because it lacks consideration.

Harold purchased 400 pairs of gloves from Isaac at a contract price of $800.Fifty of the gloves were defective and a dispute arose as to the amount due and owing under the contract.Harold refuses to pay the $800,and Isaac is threatening to sue.Which of the following is correct with regard to this transaction?

Andrew agreed to exchange something clearly without value to enter a contract with Milt.The contract will not fail for lack of consideration because,if the parties agree to the exchange,the courts will not be concerned about whether the consideration is "adequate."

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

Exclusive dealing contracts are illegal and void.

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.

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?

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

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

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.

Although such a gratuitous promise would be otherwise unenforceable,under the UCC,any claim arising out of an alleged breach of contract can be discharged by a written renunciation signed and delivered by the aggrieved party.

Define consideration.