CQ 13 Business Law

The Elements That Are Required for the Promissory Estoppel Doctrine to Be Applicable: 1. There must be a ___ and definite promise. 2. The promisor should have ____ that the promisee would rely on the promise 3. The promisee ___ relied on the promise by acting or _____ from some act. 4. The promisee's reliance was definite and resulted in ___ detriment. 5. Enforcement of the promise is necessary to avoid ___

1. clear 2.expected 3. reasonably, refraining 4. substantial 5. injustice

Liquidated Debt

A debt that is due and certain in amount

Unliquidated Debt

A debt that is uncertain in amount

Rescission

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

An accord and satisfaction can be used to settle any contract dispute with respect to any type of debt. T/F

False

If a promise is made without consideration, it can never be enforced. T/F

False

Jenkins agrees to repaint Celia's apartment in exchange for her used tablet device. When he is three-fourths finished, he says he will not continue unless she also gives him her used smartphone. His legal position is such that he can receive the smartphone in exchange for finishing the job because he has given good and fair consideration in exchange. T/F

False

Promissory estoppel and the doctrine of quasi contract are equivalent. T/F

False

Yolanda's parents tell her that if she builds a house with her own funds on land that they own, they will give her the land. If they refuse to do so after Yolanda finishes the house, she will NOT be able to use the doctrine of promissory estoppel because it does not apply to family disputes. T/F

False

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

Dewitt tells his daughter that, "In consideration of the fact that you are not as wealthy as your sisters, I'm going to give you $100,000." Is the element of bargain-for exchange evident here?

No, Because in fact no consideration has been given

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

You owe monthly payments on a car loan at fixed interest. After making 11 payments, you go to the bank and ask it to make an accord and satisfaction for a lessor amount. Will you succeed?

No, because your debt is a liquidated debt and therefore is not in dispute.

Past consideration

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

A basic rule is that there can be no satisfaction unless there is first an accord. T/F

True

A debtor who promises to pay a previous debt even though recovery is barred by the statute of limitations makes an enforceable promise that does not need consideration. T/F

True

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. T/F

True

Past consideration is the equivalent of no consideration. T/F

True

Wes agrees to install a new hard drive and modem in Mary's computer in exchange for four of her used textbooks. After he installs the hard drive, Wes says he won't install the modem unless Mary gives him two more books. What legal position are the parties in now? a. Mary can sue for breach of contract, because Wes had a preexisting duty to do all of the work. b. Mary must give Wes the additional books. c. Wes will only get one more book, because two is too many more to be fair. d. Wes can receive the extra books in exchange for doing more work, as he has given good and fair consideration in exchange.

a. Mary can sue for breach of contract, because Wes had a preexisting duty to do all of the work.

Promissory estoppel does NOT require: a. an indefinite promise. b. that justice be better served by enforcement of the promise. c. a signed writing explaining the promise.

a. an indefinite promise.

Kevin is harmed in Allister's store. Kevin claims his injuries have resulted in $12,000 worth of medical expenses, plus another $12,000 for emotional distress. Allister offers to pay Kevin $16,000 in exchange for his promise not to file a lawsuit against her for his injuries. Kevin accepts Allister's offer. Kevin and Allister have a. a covenant not to sue. b. no contract. c. a release of suit. d. a covenant not to compete

a. covenant not to sue

When a debtor offers to pay, and a creditor accepts, a lesser amount than the creditor originally claimed was owed, the agreement is called: a. a satisfaction. b. an accord and satisfaction. c. an accord.

b. an accord and satisfaction.

Frank is driving his car when he collides with Peter's car. Frank writes Peter a letter in which he offers to pay Peter $5,000 if Peter will agree to forfeit all of his rights to pursue a lawsuit against Frank for this accident. If Peter agrees and signs the letter, they will have a... a. delimited accord. b. release. c. covenant not to sue. d. concerted satisfaction.

b. release

Chuck tells Mia that he is looking for a rare edition of The Shining for his book collection, and would pay up to $500 if she were to find him a copy of the book in good condition. Mia is able to locate a copy of the book and pays $450 for it at an auction. She presents the book to Chuck and he refuses to pay her, stating that he was only joking. What are Mia's options? a. Mia may not recover the $450 from Chuck because there was no bargained-for exchange. b. Mia may not recover the $450 from Chuck because she did not have a contract with Chuck by formally accepting his offer. c. Mia may recover the $450 from Chuck because she reasonably and substantially relied on Chuck's promise. d. Mia may recover the $450 from Chuck because consideration is not necessary in an implied contract.

c. Mia may recover the $450 from Chuck because she reasonably and substantially relied on Chuck's promise.

An award is posted by a private group for information leading to the arrest of a criminal. Who of the following CANNOT claim such a reward: a. Senior citizens b. Emancipated minors c. Sheriffs d. Residents with work visas

c. Sheriffs

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

Lila tells her friend, Joanne, that she will give her $10,000 towards the purchase of a new car. Lila later changes her mind, and Joanne tells her that she will sue to enforce the contract. A court would likely find that this agreement is... a. enforceable because the $10,000 is the consideration for the agreement. b. unenforceable because their agreement was not in writing. c. enforceable because Lila made a promise to Joanne, which is the same as a contract. d. unenforceable because there is no bargained-for exchange.

d. unenforceable because there is no bargained-for exchange.

When all of the requirements are met to state a claim under the doctrine of promissory estoppel, the promisor will be _______ from asserting the lack of consideration as a defense.

estopped

Element of Consideration 2. Bargained-for Exchange: There must be a bargained-for _____

exchange

The law recognizes that two parties can mutually agree to cancel their contract to the extent that it is _____

executory

A charitable subscription is NOT a promise to make a donation to: a. Alcoholic's Anonymous. b. a college or university. c. the Human Society. d. a religious organization. e. United Fund. f. the U.S. Treasury.

f. the U.S. Treasury

Something of legally sufficient value may consist of the performance of an action that one is otherwise not ____ to undertake.

obligated

Element of Consideration 1. Legal Value: Something of legally sufficient value must be given in exchange for a promise. This may consist of a promise, a ____, or a _____.

performance forbearance

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

prior

The second element of consideration is that it must provide the basis for the bargain, so the item of value must be given or promised by the promisor in return for the promisee's:

promise, performance, or promise of performance

Something of legally sufficient value may consist of the ____ from an action that one has a legal right to undertake (called a forbearance).

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

Consideration can be defined as...

something of value given in exchange for a promise

two ways in which a preexisting duty might exist:

the duty imposed by previous contract and a duty imposed by law

In most states, a legally binding release does NOT require:

the signature of an attorney or notary

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. T/F

true

Something does not have to be of direct economic or financial value to be considered legally sufficient consideration. T/F

true

Which three responses: Shockingly inadequate consideration can indicate the existence of:

undue influence, duress, fraud

Consideration is the ____ given in exchange for a promise. A contract cannot be formed without ____ consideration. Consideration is often broken down into two elements

value sufficient