Exam 12: 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.

Under the common law,in order to be enforceable,a modification of an existing contract must be supported by mutual consideration.

In the Pearsall v.Alexander case,the court found that by exchanging mutual promises to share in proceeds of lottery tickets,the parties entered into a valid,enforceable contract.

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

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms.

Under the common law,payment of a lesser sum of money than is owed in consideration of a promise to discharge a fully matured,undisputed debt is legally sufficient to support the promise of discharge.

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

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

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

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:

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.

Which of the following would not be enforceable without additional consideration?

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.

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

Jerry received a bill for $300 from Johnson for a tune-up Johnson had performed on Jerry's car.Jerry called Johnson and told him,"The car runs no better now than before the tune-up.I am sending you $100 and no more." Johnson received the $100 check which was marked "paid in full" and cashed it.Jerry is still liable to Johnson for $200.

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

Bob promises to sell to Candy an automobile for $20,000,for which Candy promises $20,000.A unilateral contract exists.

Which of the following is enforceable without consideration?

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

Obligations contingent upon a stated event are known as conditional promises.