BA 226 Ch. 12.1 Consideration

Liquidated Debt

A debt that is due and certain in amount.

Unliquidated Debt

A debt that is uncertain in amount.

A preexisting duty might exist because of ____ and ____

A duty imposed by a previous contract, A duty imposed by law

Resission

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made

When a debtor offers to pay, and a creditor accepts, a lesser amount than the creditor originally claimed was owed, the agreement is called:

An accord and satisfaction

Carmen agrees to cook 20 dinners for Hal. In exchange, Hal will repair all of the plumbing in Carmen's house. Carmen has offered legally sufficient consideration because Carmen has promised something of value.

True

If two parties substitute a new contract for an old one and the court finds that there was a preexisting duty, then the new contract will be invalid because there was no consideration

True

Shockingly inadequate consideration can indicate the existence of what exceptions? Choose 3:

Undue influence, duress, fraud

There must be a ____ and definite promise

Clear

In the interest of fairness and equity, the courts may allow an exception to the preexisting duty rule when ____

Contract performance involves unforeseen difficulties

An agreement to substitute a contractual obligation for another legal action is called a

Covenant not to sue

The promisor should have ____ that the promisee would rely on the promise

Expected

Enforcement of the promise is necessary to avoid ____

Injustice

Constance tells Jill, her best employee, that, "Your work is so good, if I like what you do over the next six months, I'll give you a $1,000 bonus." Constance does not give Jill the bonus so Jill sues. Most likely:

Jill will not win because this is an illusory promise without consideration

Sergio contracts to hire Belinda to work for him at $3,000 per month, reserving the right to cancel the contract at any time. Two days before Belinda is scheduled to start work, Sergio exercises his option-to-cancel clause. Will Belinda be successful in a lawsuit against Sergio?

No, because the promise was illusory and therefore unenforceable

Something legally sufficient value may consist of the performance of an action that one is otherwise not ____ to undertake. Something of legally sufficient value may consist of the ____ from an action that one has a legal right to undertake, called a forbearance

Obligated Refraining

Something of legally sufficient value may consist of a promise to do something that no one has no ____ legal duty to do

Prior

The promise ____ relied on the promise by acting or ____ from some act

Reasonably, Refraining

Francisca collides with Wyatt's car. Francisca writes Wyatt a letter offering to pay Wyatt $10,000 if he agrees to forfeit all of his rights to pursue a lawsuit. If Wyatt agrees and signs the letter, Wyatt will have agreed to a(n):

Release

Past Consideration

Something given or some act done in the past, which cannot ordinarily be consideration for a later bargain

Consideration can be defined as

Something of value given in exchange for a promise

The promisee's reliance was definite and resulted in ____ detriment

Substantial