Exam 12: Consideration

Julia and Mary have a contract that is still executory. They mutually agree to rescind their contract and at the same time make a new contract. If the new contract is contested in court and the court finds that there was a preexisting duty under the original contract,then the new contract

Jenilee promises to pay Kyle $500 because "he does not have as much money as other people." Jenilee's promise is

Teatro Restoration,Inc.,begins renovating an old theater for Urban Edge Productions,but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay. -Refer to Fact Pattern 12-4. If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased,the agree-ment is

Performance that creates a legally binding contract may consist of an act.

Dave's Hobby Town and Estelle's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Estelle a discount on purchases from Dave's store if Estelle will not tow the cars of Dave's customers who park in Estelle's lot. -Refer to Fact Pattern 12-1.Estelle's forbearance from towing is legally sufficient consid-eration

Sparky offers Teodora $1,000 for her collection of rare coins. She ac-cepts. If a dispute arises,a court would likely

After an accident with a vehicle licensed to Guardian Security Company,Heidi signs a covenant not to sue Guardian Security for damages in a tort action if it pays for the damage to her car. This covenant is

Rescission is the remaking of a contract so as to enrich one party at the expense of the other.

The element of bargained-for exchange distinguishes contracts from gifts.

Two parties can mutually agree to rescind a contract unless it is executory.

Uri promises to pay Tami,his niece,$5,000 if she obtains her degree at State Institute of Technology,where she is in her third year. Tami graduates. Uri is

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

D'Sean promises to pay his personal assistant Edie $50,000 in consideration of the services she provided over the years. D'Sean never makes the payment. D'Sean's promise is

Claudia pledges to donate $10,000 to Disaster Relief & Recovery Inc. (DR&R). On the basis of the pledge,DR&R orders additional supplies. If Claudia does not fulfill the pledge,a court may enforce it

Dave's Hobby Town and Estelle's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Estelle a discount on purchases from Dave's store if Estelle will not tow the cars of Dave's customers who park in Estelle's lot. -Refer to Fact Pattern 12-1.Dave's discount is legally sufficient consideration

In a covenant not to sue,the parties substitute a contractual obligation for some other type of action.

Kingston promises to pay Melina $500 to install a sump pump in his warehouse. Melina com-pletes the installation. The act of installing the pump

A promise to do what one already has a legal duty to do constitutes legally sufficient consideration.

Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later,Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury. -Refer to Fact Pattern 12-5. The agreement between Dex and Carmen is

Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later,Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury. -Refer to Fact Pattern 12-5. In Carmen's suit against Dex to recover her repair and medical expenses,Carmen will most likely recover