Exam 13: Consideration

While sailboarding, Jolie is injured when Kirby carelessly crosses her path. Kirby's insurance company offers Jolie $50,000 to release Kirby from liability, and she accepts. Later, she learns that her injuries are more serious than she realized. The release is

Kris buys Liz's house for $300,000, which is the fair market value of the house. If the contract is later disputed in court, the court is likely to declare Kris's consideration

A fire threatens to engulf a commercial building in Middletown. The building's owner promises a cash reward to the Middletown Fire Department to extinguish the blaze. The firefighters cannot claim the reward because

Consideration is the value given in return for a promise or in return or a performance.

Buck and Cady are in an auto accident. Buck offers Cady $20,000 for her promise not to pursue a legal claim against him arising out of the accident. Cady agrees. This agreement is

Ann's Sandwich Shop and Bob's Coffee Bar are adjacent businesses. Ann, whose small shop has little room for her customers to sit, offers Bob a discount on purchases if he will allow her customers to sit at the tables on the sidewalk in front of his store. Bob's forbearance from asking Ann's customers not to use his tables is legally sufficient consideration

Under a contract with Soy Farms, Tai begins grading a terraced hillside for planting. Halfway through the project, Tai asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." The farm agrees but later refuses to pay. The agreement to pay more is

Raj defends against a breach-of-contract suit by Student Loan Corporation by claiming that their deal-a student loan-was unfair because the consideration for the contract was inadequate. With respect to Raj's defense, the court will most likely rule in favor of the lender on the ground that

Recovery of Bud's debt to Credit Corporation is barred by a statute of limitations when Bud makes a partial payment. The creditor

Situations in which agreements lack consideration include those involving a preexisting duty.

Dean, the president of Billing & Credit Company, promises to pay his employee Ewing, who is dangerously obese, $10 for every pound that he loses within the next two years. Ewing agrees, diets and exercises, loses 154 pounds, and asks Dean for $1,540. Dean refuses to pay, saying that he does not remember the promise, but that even if he did make it, there was no consideration, and Ewing's improved health is a sufficient benefit for his effort and sacrifice. Ewing files a suit against Dean. In whose favor is the court likely to rule, and why?

Exceptions to the preexisting duty rule include unforeseen difficulties.

Rory questions whether there is consideration for his contract with Silver Spurs Club to exchange his performance of country music on certain dates for Silver's payment of a certain amount. To constitute consideration, the value of whatever is exchanged must be

Cindy, a real estate agent, sells her friend Doug's house without charging a commission. In return, Doug promises to give Cindy $1,000. This promise is not an enforceable contract because

Key promises to pay Liv, his niece, $5,000 if she obtains her degree at Metro College, where she is in her third year. Liv graduates. Key must pay because

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Agency, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

Exceptions to the preexisting duty rule include rescission.

Expo Center Inc. and Festival Music LLC have an executory contract. They agree to rescind it and simultaneously enter into a new contract. If the previous contract was subject to a preexisting duty, the new contract will most likely be

Adequacy of consideration refers to "how much" consideration is given.

Dore's Aunt Em tells her, "If I feel you deserve it at the time, I will give you a new car when you graduate from college." Em's promise is