Exam 10: Consideration

Consideration in bilateral contracts normally consists of a promise in return for a performance.

A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable.

Rescission is the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made.

A covenant not to sue is against public policy.

Chris promises Dina $40,000 if she graduates from Eagle College. Dina enrolls in Eagle, attends full-time for four years, and graduates. When Dina asks Chris for $40,000, Chris says, "I don't re?member promising you $40,000. But if there was a promise, it's not en?forceable, because we didn't bargain for it. And even if there was a prom?ise that would other?wise be enforceable, I revoke it now." Can Dina en?force Chris's "prom?ise"? Why or why not?

Under a contract with Valley Vineyard, Walsh begins grading a terraced hillside for the planting of grapes. Halfway through the project, Walsh asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." Valley agrees but later refuses to pay. Their agreement is

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

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 release does not require consideration to be legally binding.

A promise to do what one already has a legal duty to do constitutes legally suf?ficient consideration.

Twyla's dock is damaged in an accident caused by Ulric's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulric fails to pay, Twyla can bring an action for breach of contract. This agreement is

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

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

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

For accord and satisfaction to occur, the amount of the debt cannot be in dispute.

Gustaf and Hilltop Country Club disagree as to the exact amount Hilltop owes Gustaf for his landscaping work. They form a new agreement that, on fulfillment, will discharge the prior obli?gation. This is

Forbearance is the act of refraining from doing something that one has a legal right to do.

Lea signs a contract with Metro Business Loans, Inc., to borrow $25,000 to remodel Lea's Hair Care Salon. Lea does not repay the loan. Metro fails to sue within the time prescribed by the applicable statute of limitations. Later Lea promises to pay the debt. To be enforceable, this promise needs

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

The doctrine of promissory estoppel does not apply if there exists a clear and definite promise.