BUL 3310 Ch10

Consideration is often broken down into two parts: something of legal value and:

A bargained-for exchange.

Which of the following is a necessary element for the doctrine of promissory estoppel to be applied?

A clear and definite promise.

Which of the following is of value in the eyes of the law so that it makes something legally sufficient?

A promise to do something that one has no legal duty to do.

An agreement in which one party gives up the right to pursue a legal claim against another party is a:

A release.

If a party is already bound by contract or law to perform a certain duty, that duty cannot serve as consideration for a second contract under:

The preexisting duty rule.

Stan hired a team of workers to complete a project. He told them that if they came in ahead of schedule and under budget, he would share the cost savings with them in the form of cash bonuses if his boss allowed it.

This is not enforceable because it is an illusory promise.

One exception to the preexisting duty rule, in which the promise to do something for which one already has a legal duty to perform, is:

Unforeseen difficulties.

Thomas Weinsaft signed an agreement with his son Nicholas. Thomas agreed that during his lifetime he would not sell any of his shares of stock in his company without first giving Nicholas an opportunity to buy the company. On Thomas's death, under the agreement, Nicholas had the option to buy Thomas's stock. The agreement stated that the consideration for the contract was $10, along with Nicholas's agreement to remain the chief executive officer (CEO) of the company. Nicholas has served and continued to serve as CEO of the company. When Thomas died, Nicholas gave notice that he intended to buy the stock, but one of the beneficiaries under Thomas's will sued, claiming that he was entitled, as an heir, to the stock, because there was no consideration for Thomas's promises to Nicholas. The court most likely held that there:

Was consideration, because Nicholas remained CEO of the company.

While in high school, James's father promises James that he will pay for college if James refrains from drinking alcohol until his 21st birthday. This contract:

lacks legally sufficient consideration because James has a preexisting legal duty to refrain from drinking alcohol until he is 21.

Liz agrees to cook 20 dinners for Brian, and in exchange Brian will repair all of the plumbing in Liz's house. Liz has offered legally:

sufficient consideration, because Liz has promised something of value in exchange for the promise.

Rescission is:

the unmaking of a contract so as to return the parties to the position they were in before the contract was formed.

Carol Rogers, a local millionaire, promises to donate $500,000 to the Springfield Humane Society, which the society plans to use to build a new animal hospital. Based on Carol's promise, the society begins work on the hospital. Carol then backs out of her offer.

Carol can be sued for the money under theory of promissory estoppel.

Kreft Systems contracted with TableauCorp to upgrade certain software on all of its computers. Tableau provided Kreft with system specifications regarding its computers and servers before the contract was signed. When work began, Kreft ran into extraordinary difficulties—not all computers were running the operating system indicated in the specifications received from Tableau. Some of the computers had older versions that were not compatible with the software upgrades. Tableau agreed to pay extra compensation to cover the cost of upgrading the systems as needed in order to run the new software. A court would most likely:

Enforce the agreement to pay more because of unforeseen difficulties.

Bob enters into a contract with Jim and Jen to build their new custom dream home in Florida, and they agree on a price. Before construction begins, a hurricane hits the Florida coast, causing lumber to become scarce. Bob is able to obtain lumber from Texas at twice the itemized cost in the contract, and Jim and Jen agree to pay the difference. Midway through construction, Jim and Jen change their minds and do not want to pay for the increased costs. The court will likely find the agreement is:

Enforceable, because due to unforeseen difficulties Jim and Jen agreed to pay extra to overcome them.

The act of refraining from doing something that one has a legal right to do is known as:

Forbearance.

The Langleys' tree has branches that extend into the Bellows' yard. The seeds and leaves fall into the Bellows' yard, making a mess every spring and fall. The Bellows would prefer that the tree be trimmed back. The Langleys say that cutting back the tree would impact its beauty and also reduce the amount of shade it provides. The Langleys promise to pay the Bellows $500 and the Bellows agree to not cut back the tree. This promise:

Is enforceable because the Bellows' promise is a forbearance.

Les agrees to install a new hard drive and software in Marilee's computer in exchange for four of her used textbooks. After he installs the hard drive, Les says he won't install the software unless Marilee gives him two more books. What legal position are the parties in now?

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

Sheriff McAdams sees a poster offering a $5,000 reward for solving a crime. He solves the crime and contacts the number on the poster to claim the reward. Is the individual offering the reward (the offeree) required to pay Sheriff McAdams?

No, because Sheriff McAdams already has a legal duty to solve the crime.

Bill, an employee at Chuck Donovan's Body Shop, is offered a job from a competing shop at a higher pay. Chuck asks Bill not to take the job. Chuck says that while he cannot match the pay from the other shop, he promises to "take care of Bill" if Bill stays on. Bill turns down the job offer. He then asks Chuck to make good on his promise, but Chuck doesn't come through. Can Bill sue Chuck under the doctrine of promissory estoppel to force Chuck to keep the promise?

No, the reliance was not clear and definite.

Hamlin Township has an ordinance requiring property owners to keep their yards presentable. One requirement is that grass cannot be more than eight inches high. Residents complained to the town council that some property owners are letting their grass grow too high. The council instituted the following incentive program: Any property owner who violated this rule would receive a 5% reduction on their annual township property tax if they went 12 months without another violation. The program was very successful, as most previous violators maintained their grass at the proper height and will receive the tax break the next time taxes are due. As a result, the township is expecting to collect lower revenues and is planning to cut some services in order to meet its budget. Residents who never violated this township ordinance are not getting the tax break and are upset by the suggested cuts in services. They are suing the township, saying the incentive program was illegal and should not be honored. The court will likely rule that this incentive program is:

Not enforceable, because it is asking property owners to do something they have a prior legal duty to do.

The doctrine that can prevent an offeror from revoking an offer once the offeree has detrimentally relied on it is known as:

Promissory estoppel.

Consideration can be defined as:

Something of value given in return for a promise.

D'Andre does something outrageously funny. Steve says, "That was hysterical! Because you really made me laugh, when I get paid on Friday, I'm going to give you $50."

Steve's promise is not enforceable because there is no bargained-for exchange.