Exam 12: Consideration

A contract that one party retains the exclusive right to cancel at any time is unenforceable.

A covenant not to sue is against public policy.

Rollo promises to perform, for a price, shoe repair services in affiliation with Togs 'n Things, a clothing store. To support a contract, the consid?eration ex?changed by the parties must be

Digital Computers (DC) agrees to sell 100 hard drives to Eagle Computer Stores. Later, to obtain a higher profit, DC demands an extra $100 per drive to complete delivery. With no other source for DC drives, Eagle reluctantly agrees. Regarding this agreement, a court would likely

In contract law, "consideration" refers to the courtesy that one party shows another in negotiating a deal.

Fact Pattern 12-A3 Cut-Rate Construction Company begins building a restaurant for Diners Restaurants, Inc., but after two months demands an extra $100,000. Diners agrees to pay. -Refer to Fact Pattern 12-A3. If CCC offers, as a reason for the extra $100,000, that ordinary business expenses have increased, the agree?ment is

George and Holly disagree as to the exact amount one owes the other. They form a new agreement that, on fulfillment, will discharge the prior obli?gation. This is

A bargained-for exchange is one of the elements of consideration.

Milo files a suit against National Corporation under the doctrine of prom?issory estoppel. Milo must show that

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

Superior-Plus Properties, Inc., and Topps Construction Company sign a contract that specifies the amount to be paid. Additional compensation may be jus?tified by

General Credit Corporation's promise to pay its employees a year-end bonus "if it seems like a good idea at the time" is

Inadequate consideration may reflect a lack of bargained-for exchange.

The preexisting duty rule permits a party who is bound by contract to per?form a certain duty to use that duty as consideration for a second contract.

A transaction that lacks a bargained-for exchange lacks an element of consideration.

Fact Pattern 12-A2 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 12-A2. A court is most likely to evaluate the adequacy of consid?era?tion if

Flossy promises to pay her cousin Garth, who is dangerously obese, $10,000 if Garth loses 100 pounds within the next two years. Garth agrees, per?forms his part of the bar?gain, and asks for the money. Flossy refuses to pay, say?ing that she forgot about the deal, but that even if she did make such a pledge, there was no valid consideration for it. Garth files a suit against Flossy. In whose favor is the court likely to rule, and why?

Rescission is the substitution of one party to a contract for a third party, who agrees to assume the contractual duties.

Collection of EZ Sales Company's debt to First Storage Corporation is barred by a statute of limitations. A new promise by EZ to pay the debt

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