Exam 13: Consideration

Painting a garage can constitute "something of legally sufficient value."

With respect to consideration, the application of the rule regarding preexisting duty is meant to prevent extortion.

If a debt is liquidated, an accord and satisfaction cannot take place.

National Trucking Company begins transporting crude for Oil Inc. under a contract for a stated amount per load. After six months, National demands an increase in the stated amount because ordinary business expenses have increased. Oil's agreement to pay the increased amount is

Consideration refers to one party's assessment of the other party to a contract.

To pay on receipt of certain goods is "something of legally sufficient value."

Two parties can mutually agree to rescind a contract only to the extent that it has been executed-otherwise, there is nothing to rescind.

EcoEnergy LLC files a suit against Fiber Optics Inc., claiming that the consideration for their contract is inadequate-that the plaintiff will not realize sufficient financial benefit from the deal to make it worthwhile. Most likely, the court will

Consideration must provide the basis for the bargain struck between contracting parties.

Providing accounting services is "something of legally sufficient value."

Centre City Properties, Inc., owns and manages a warehouse. DIY Home Improvement Stores agrees to lease the warehouse for six years. Under the lease, DIY is obligated to pay all of the utility costs. Two years into the term, DIY asks Centre City to modify the lease to provide that the utility costs will be split equally between them. The landlord agrees, but later decides it does not want to share the costs and refuses to pay. Is Centre City bound to its agreement to share the utility costs? Why or why not?

A preexisting duty may arise out of a previous contract.

Fritz offers to buy a guitar owned by Holle for twice what she paid for it. She accepts and hands the guitar to Fritz. Holle's delivery of the guitar is

In general, courts question the adequacy of consideration.

Jen promises to pay Kam $500 because "she does not have as much money as other people." Jen's promise is

Molly's motorcycle is damaged in an accident caused by Luc's negligence. Luc agrees to pay Molly $25,000 if she agrees to release him from further liability. Molly agrees. If Molly's damages ultimately exceed $25,000, she can

A promise to pay a previous debt barred by a statute of limitations can be enforced without consideration.

To constitute consideration, there must be

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump

A promise to do something that one has no prior legal duty to do is not legally sufficient consideration.