Exam 8: Consideration and Privity

Yusheng sends Pierre a cheque for $100 with a note saying she will buy his golf clubs if he is willing.Pierre cashes the cheque,but never delivers the clubs.Which of the following describes the situation?

As a wedding anniversary present for himself and his wife,Louisa,Mario entered into an agreement with Stanislaus,a world famous pianist.Under the terms of that agreement,Mario promised to pay Stanislaus $52 000.Stanislaus promised that he would provide weekly lessons for one year for both Mario and Louisa.After two weeks of lessons,Mario completely lost interest,but Louisa is eager to continue.Stanislaus,however,refuses to go on.Louisa has the right to demand the remainder of the lessons from Stanislaus because the courts generally assume that if one party (such as Mario)enters into a contract for the benefit of another person (such as Louisa),the promise provided by the other contractual party (such as Stanislaus)is held on trust.

Cookie entered into a contract with Muhammad.Muhammad was required to pay $25 000 to Cookie,and he was entitled to have an engine modified and installed in his speedboat.Jane vicariously performed part of the contract.Which of the following statements is TRUE?

Maria went on vacation in May.She expected that her garden would be fine because May is normally a very rainy month.In fact,it did not rain at all during May.Her neighbour,Hector,therefore watered her garden because he knew that she would not want her plants to die.When she returned from her vacation in early June,she thanked Hector and promised to pay him $200 for his time and effort.Select the best answer.

Briefly describe the requirements that must exist before a promissory estoppel will arise.

"The law of contract assumes that people are generally capable of looking after their own interests.An agreement therefore may be enforceable even if the parties do not exchange things of equal value." Discuss that statement.Illustrate your answer with three business law examples.

Parker Inc promised to pay $100 000 cash to Coltrane Ltd in exchange for a shipment of widgets.The widgets were delivered on October 1st and the price was to be paid on October 15.On October 13,Parker informed Coltrane that it would not be able to afford to pay any more than $75 000.Which of the following statements is TRUE?

What is the essential purpose of a seal?

Which of the following situations most likely illustrates the concept of pre-existing public duty not constituting consideration?

Which of the following statements is TRUE?

"A promise to perform a pre-existing contractual obligation cannot provide consideration for a new contract.That rule is based on the fact that it would be undesirable if party A could threaten to break an existing contract in order to get party B to enter into a second agreement at a higher price." Is that statement true: (i)if the existing contract was created between A and B,or (ii)if the existing contract was created between A and C? In each instance,provide two reasons for your answer.

Koln Enterprises Ltd is a music publisher that manufactures compact discs.In January,it agreed to record a jazz concert for Jade Nagoya,a pianist,in exchange for payment of $25 000.The recording was to take place in April.Under the terms of that agreement,Jade would then be entitled to sell the CDs to her own customers for her own profit.As soon as that contract was created,Koln orally assigned its rights to Bremen Collection Inc.In February,Koln breached a separate contract that it had with Jade.As a result of that breach,it became indebted to her for $5000.It has not yet paid that amount to her.In March,Bremen notified Jade of the assignment that it had received from Koln.Koln recorded the concert in April and pressed it onto a set of CDs.When Jade received those discs,however,she noticed that while the sound quality was acceptable,the packaging did not satisfy the terms of her January agreement with Koln.As a result of the shoddy packaging,Jade lost $3000 on the re-sale of the CDs to her own customers.How much money is Bremen entitled to collect from Jade? Explain your answer.

Patricia and Charlie entered into a written agreement.Patricia promised to pay $5000 to Haden,who is Charlie's brother.Charlie placed his seal on the document,but Patricia did not do so.Three days later,Charlie promised that he would design a new computer program for Bethany,Patricia's sister,in exchange for Patricia's promise.Which of the following statements is the most accurate?

Gabriel entered into a contract with Paradise Equestrian Services (PES).The purpose of the contract was to allow Gabriel's son,Archie,to learn to ride horses.The situation was somewhat complicated by the fact that while Gabriel lived in Prince Edward Island,Archie was starting college in British Columbia,where PES was also located.In an attempt to make it easier for Archie to take action on the contract,if any problems arose,Gabriel made sure that the agreement contained Paragraph 13,which says,"The promise given by PES is hereby made to Gabriel by PES and the benefits of that promises are held in trust by PES for the benefit of Archie." Which of the following statements is TRUE?

Which of the following statements is TRUE?

Benson tells his son,Charles,that he will sell him his Bentley for $200 when he turns 18.On his 18ᵗʰ birthday,Charles brings his father $200,but Benson refuses to hand over the keys,arguing that,no matter what he said,a Bentley is worth more than $200.Which of the following statements is true?

Fred owed a debt of $10 000 to Regina.Because he had lost his job and was experiencing financial difficulties,he hoped that she would take pity on him and would not insist upon payment.Fred therefore said to Tyra,who was Regina's colleague,"If you can get her to drop the matter,I'll make it worth your while." Tyra felt sorry for Fred and said that she would do her best.A week later,she called Fred and explained that Regina had agreed under seal to forgive the $10 000 debt.Fred replied by saying,"Many thanks.Come by my house and I'll pay you $500 for your effort." Which of the following statements is TRUE?

Tracey is a police officer.While she was on vacation,she agreed to act as a security guard at a concert in exchange for payment of $500.She performed the work,but the concert promoter refuses to pay her.He is entitled to do so because the law wants to discourage public servants like Tracey from improperly taking advantage of their special skills for private gains.

Which of the following refers to a TRUE exception to the privity doctrine,in the sense that a person is entitled to sue on a contract despite the fact that he or she is not a party to that contract?

A gratuitous promise