Exam 12: Consideration

Pablo promises to sell to Candice an automobile for $12,000, for which Candice promises $12,000. A bilateral contract exists.

In most states, a contract under seal is binding without consideration.

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

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

Jason's mother would like him to go to college, so in June he enrolls at State University. He also quits his job and tells his mother his plans to continue taking 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. Which of the following is true regarding his mother's promise?

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.

A liquidated debt is an obligation the existence or amount of which is in dispute.

Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed, only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement is most accurate?

Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on November 1 at Howard's house. Which of the following would constitute legally sufficient consideration?

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) contract.

In a unilateral contract, a promise is exchanged for an act or forbearance to act.

"Consideration" does not require an actual benefit to both sides of an agreement.

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

Carlos ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door at $179.99. Carlos calls the store and demands the advertised price. If the store agrees:

Contracts generally require adequacy of consideration where the consideration given by both parties is of fair value and equitable.

The Restatement provides that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.

The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.

The central idea behind consideration is that the parties have intentionally entered into a bargained-for exchange with one another and have given each other something in exchange for a promise or performance.

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.