Exam 8: The Requirement of Consideration

Regarding consideration,the following questions can help determine whether there is a contract rather than a gratuitous promise: Is the consideration past consideration? Is the proposed consideration legal? Is there consideration flowing in both directions? Does it have value in each direction? If not,is there an exception?

Dimitri wrote to Pat offering to sell his neo-expressionist painting,"Red Sails in the Sunset," for $25,000.Pat replied that,since it would require that he redecorate,he could not really pay more than $18,000 for the painting.Dimitri replied that he was greatly hurt and deeply insulted by such an offer,especially from someone who was supposed to be a connoisseur of fine art,but that,since he was a little tight for cash,he would be willing to let it go to Pat for $13,000 for old times' sake.Pat immediately replied,saying that he accepted the painting at $13,000 and enquiring whether Dimitri wanted it in cash.Dimitri then realized that he had typed "$13,000" instead of "$23,000" in his second letter to Pat.

A and B are neighbours.Before A left on a holiday,he asked B to "keep an eye on his house." While A was on holidays,B noticed that A's lawn was in need of cutting,and proceeded to cut the lawn.On A's return from his holiday,B demanded $10 for cutting the lawn.A's statement was a request for service,and hence B may claim for his service of cutting of the lawn on the basis of quantum meruit.

Mark and his wife Jean had recently built a country home on a one-acre lot.Initially overwhelmed by the size of the lawn Mark arranged for Stanley,a neighbouring farmer,to cut their lawn with his riding mower.The first cut was difficult and time consuming as there were many tall grasses and weeds to cut through.On this occasion,Stanley charged $300.One week later,Stanley cut the lawn again and charged Mark $200.Reflecting on the substantial expense this represented,Mark thanked Stanley for his services and informed him that he planned to purchase his own lawn mower and take over the job himself.Mark also told Stanley that if he were stuck in the future he would call Stanley to help him out.Shortly thereafter Mark and Jean took a two-week vacation and on arriving home discovered that Stanley had mowed their lawn in their absence.There was an invoice stuck to their door stating $200 for mowing services and $100 for weed spraying.When questioned about the bill Stanley explained that he understood Mark wanted him to mow the lawn if he were unable to. What legal issues does this situation raise and what arguments would be used by the parties involved?

Quantum meruit and quantum valebant are two legal doctrines which result in essentially similar outcomes.

Anderson,a city employee,collected garbage along Smyth's street on Thursday of each week.One day Smyth said to Anderson: "You have done such a good job; I will give you $10 when you come by next week." The next week,when Anderson made his regular garbage pickup for the city,he met Smyth and asked for the $10.Smyth refused to pay.Smyth is not obliged to pay Anderson the $10,because his promise was gratuitous.

Mr.Ying,a successful lawyer,is asked by his daughter's daycare to do their legal work on a voluntary,unpaid basis and,since it is minimal,he agrees.As the result of an error he makes in drawing up the daycare's standard employment contract,a mistake which would not have been made by the reasonable lawyer,the daycare has to compensate an employee who was let go for failure to meet the job requirements.Since Mr.Ying received no consideration for his work,the daycare cannot hold him liable in contract for its loss.

Anderson,a city employee,collected garbage along Smyth's street on Thursday of each week.One day Smyth said to Anderson: "You have done such a good job; I will give you $10 when you come by next week." The next week,when Anderson made his regular garbage pickup for the city,he met Smyth and asked for the $10.Smyth refused to pay.The reason why Anderson would be unable to show consideration is that,as a city employee,he was already bound to collect Smyth's garbage as a part of his duty to his employer.

In a letter to his nephew,Peter,Mortimer promised to leave Peter all his money when he died,in memory of Peter's father for whom Mortimer had great respect.There is nothing Peter could do to ensure that Mortimer will keep his promise since it is gratuitous and a gratuitous promise can never be made enforceable.

The Big Book Store just received a shipment of 100 copies of Contemporary Business Law: Principles and Cases at wholesale price.The store contacted the local university to see if it was interested in purchasing the book.The bookstore faxed an offer of $5,000.00 for the 100 books.Due to a poor quality fax transmission the last three zeros were not visible.Upon receiving the offer it appeared that the 100 books were on sale for $500.The university accepted the offer,received the books and deposited $500.00 in the store's bank account.Upon receiving its bank statement,the store realized the error and decided to take action against the university.Will it succeed?

A and B are neighbours.Before A left on a holiday,he asked B to "keep an eye on his house." While A was on holidays,B noticed that A's lawn was in need of cutting,and proceeded to cut the lawn.On A's return from his holiday,B demanded $10 for cutting the lawn.B would not be entitled to claim anything for his service because his act was gratuitous.

A Canadian multinational was interested in developing a market in a third-world country,which had once been communist,and was moving to a free enterprise system.It negotiated with the government to buy and resurrect the fledging state-owned automobile industry.After presenting a contract under seal,the company got "cold feet" and decided to back out of the deal.The contract will be enforced against the company because the application of a seal together with a signature is considered to represent consideration for the contract.

June,an underworld enforcer,beats up Jason under an agreement with Monty by which she is to be paid $5,000 for her work.Although each party has given consideration,June cannot use the courts to enforce the contract if Monty will not pay her.

Chris offered to take Kelly to the movie.Kelly went to the movie theatre but Chris did not arrive.Can Chris sue Kelly for breach of contract?

Chu,a non-swimmer,fell off a boat into the lake."Help!" he cried."$100 to the person who saves me!" Frances then jumped in and held Chu's head above water until the boat's dinghy could reach them.

X owed Y a debt in the amount of $1,000.The debt was payable on June 1^st.If Z paid $900 as settlement for the debt owed by X to Y,Z would be entitled to an assignment of the debt owed by X,and could collect the debt from him.

The Queen's Wardrobe,a dressmaking boutique,agrees to make Rhonda's wedding dress for $2,000.The dress is to be ready for her wedding on June 1^st.On May 14^th,Jane,the owner called Rhonda to tell her that the dress would not be ready on time unless Rhonda agreed to pay an extra $500 so that Jane could hire someone to help her finish the lace embroidery.Rhonda is very upset,and feeling that she has no other choice,agrees.When she picks up the dress,she tells Jane that she does not think that it is fair that she should have to pay more than they had agreed upon and refuses to do so.

A small municipality advertised a "call for tenders" to complete road construction in several newspapers.After the tender had been closed the job was not awarded to any of the prospective bidders.The municipality,on the recommendation of a neighbouring township contacted another firm and awarded it the contract the basis of price and reputation.After learning of this development the companies who had bid on the advertised tender joined forces and brought a suit against the municipality.They will be successful.

The act of performing a contract or the offer of payment of money due under a contract is known as a(n):

A bicycle repair shop replaced a wheel on Zoe's mountain bike after she had run over a nail in the street.The repairman said that,although the new tire was not the same brand that had been on the bike when she bought it,not only was it better quality and would be dependable,it was less expensive too.As Zoe biked down a busy street the tire tube popped causing her to lose control and fall into traffic.She suffered broken bones and internal injuries resulting in lost pay at work.Zoe's lawyer suggested using estoppel as grounds for her case.Which of the following are elements upon which estoppel can be used to argue her case?