Exam 11: Consideration

Real Estate Investments,Inc.,owns and manages an office building.Secure Insurance Company agrees to lease the building for five years.Under the lease,Secure is obligated to pay all of the utility costs.Two years into the term,Secure asks Real Estate to modify the lease to provide that the utility costs be split equally between them.Real Estate agrees,but later decides it does not want to share the costs and refuses to pay.Is the landlord bound to its agreement to share the utility costs Why or why not

Berkie's bicycle is damaged in an accident caused by Imogene.Berkie agrees not to sue Imogene if she will pay for the damage.If she fails to pay,Berkie can bring an action for breach of contract.This is

Dag and Enita are in an auto accident. Dag offers Enita $2,000 if she promises not to pursue her potential legal claim against him. Enita agrees. Later, Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover her medical expenses for a latent injury. -Refer to Fact Pattern 11-5.In Enita's suit against Dag to recover her repair and medical expenses,Enita will most likely recover

Dave's Hobby Town and Eva's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Eva a discount on purchases from Dave's store if Eva will not tow the cars of Dave's customers who park in Eva's lot. -Refer to Fact Pattern 11-1.Dave's discount is legally sufficient consideration

Sonic Board Corporation files a suit against Custom Fabricators Company,claiming that the consideration for their contract is inadequate.The court will most likely not examine the adequacy of the consideration if

Auto Body Repair Shop (ABRS)promises to pay Ben $1,000 a week to work for ABRS.Ben accepts and quits his job with Car Care Service.ABRS fails to provide a job for Ben.Ben has a cause of action based on

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

Leif offers Miley $1,000 for her three-year-old laptop computer.Miley accepts.If a dispute arises,a court would likely

Vince offers to buy a book owned by Sun-Hi for twice what Sun-Hi paid for it.She accepts and hands the book to Vince.Sun-Hi's delivery of the book is

Braxton questions whether there is consideration for his contract with Tawny to exchange his accounting services for her payment of a certain amount.To constitute consideration,there must be

A release does not require consideration to be legally binding.

Jen questions whether there is consideration for her contract with Isaac to exchange her catering services for his payment of a certain amount.To constitute consideration,the value of whatever is exchanged must be

In many states,a release requires a signed writing.

Superior-Plus Properties,Inc.,and Topps Construction Company sign a contract that specifies the amounts to be paid for a building project at various stages and on its completion.Additional compensation may be justified by

Herm promises to pay Nixie to work as an assistant buyer for his Organic Foods stores.Nixie agrees and quits her job with Pic-U Grocery,but Herm does not hire her.Herm is most likely liable to Nixie under

An illusory promise is a promise that is enforceable without consideration.

Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate. -Refer to Fact Pattern 11-2.If,as Brad claims,the consideration in this problem is inadequate,it may indicate a lack of

Nationwide Business Company and One-State Sales,Inc.,agree to simultaneously rescind their contract and enter into a new agreement under which their duties are the same.Nationwide later sues One-State to enforce the new agreement.The court

Baked Stuff Company agrees to supply Comida Café with all the corn chips that it requires for a year.A sudden blight caused by an organism hitherto unknown in the United States results in a shortage of corn,and the price rises sharply.Baked Stuff asks Comida to pay a higher price for the chips.This request is

General Credit Corporation promises to pay its chief finance officer Hughie and other employees a year-end bonus "if it seems like a good idea at that time." This is