Exam 12: Consideration

Vince offers to buy a book owned by Sun-Hi for twice what Sun-Hi paid for it.She accepts and hands the book to Vince.Sun-Hi's delivery of the book is

A promise to pay a debt for which a statute of limitations bars recovery is an enforceable promise.

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

Venture Capital Corporation loans Wally $15,000 to start a new business.Wally does not pay,but Venture fails to sue within the time prescribed by the applicable statute of limitations.Wally's promise to pay the debt even though recovery is barred

In contract law,"consideration" refers to the courtesy that one party shows another in negotiating a deal.

Inadequate consideration may indicate undue influence.

A covenant not to sue is against public policy.

Fact Pattern 12-A1 (Questions A4-A6 apply) Jesse 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-A1.If,as Jesse claims,the consideration in this problem is inadequate,it may indicate a lack of

A promise by one party to pay another for refraining from an act is enforceable.

Fact Pattern 12-A2 (Questions A8-A10 apply) Cut-Rate Construction Company (CCC)begins building a restaurant for Diners Restaurants,Inc.,but after two months demands an extra $100,000.Diners agrees to pay. -Refer to Fact Pattern 12-A2.If CCC offers,as a reason for the extra $100,000,that ordinary business expenses have increased,the agree?ment is

Under a contract with Bucolic Farms,Agro Excavation,Inc.,begins digging an agricultural pond.In mid-project,Agro asks for $15,000 over the contract price,claiming an increase in the "cost of doing business." Bucolic agrees but later refuses to pay.Their agreement is

For consideration to have "legally sufficient value," it must con?sist of goods or money.

Courts typically consider the adequacy of consideration.

Domestic Auto Sales,Inc.,promises its salaried employees a bonus at the end of the year if management thinks it is warranted.This promise is

Real Estate Investments,Inc.,owns and manages an office building.Secure Insurance Company agrees to lease the building for five years.Un?der the lease,Secure is obligated to pay all of the utility costs.Two years into the term,Secure asks Real Estate to modify the lease to provide that the utility costs be split equally between them.Real Estate agrees,but later decides it does not want to share the costs and refuses to pay.Is the landlord bound to its agreement to share the utility costs? Why or why not?

Fact Pattern 12-A1 (Questions A4-A6 apply) Jesse 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-A1.A court is most likely to evaluate the adequacy of consid?era?tion if

Auto Body Repair Shop (ABRS)promises to pay Ben $1,000 a week to work for ABRS.Ben accepts and quits his job with Car Care Service.ABRS fails to provide a job for Ben.Ben has a cause of action based on

A promise to pay for an act that has yet to occur is unenforceable.

Fact Pattern 12-A1 (Questions A4-A6 apply) Jesse 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-A1."Adequacy" of consideration refers to

Homebuyers Mortgage Corporation's promise to pay its employees a year-end bonus "if it seems like a good idea at the time" is