MindTap: Worksheet 12.2: Consideration

Constance tells Jill, her best employee, "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.

A preexisting duty might exist because of _____ and a duty imposed by law.

a duty imposed by a previous contract

Carmen agrees to cook twenty 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 three.

Undue influence Duress Fraud

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

prior

Something of 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.

refraining

Consideration can be defined as

something of value given in exchange for a promise

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.

Match the left-hand words to their appropriate definitions on the right-hand side.

Past consideration: something given or some act done in the past, which cannot ordinarily be consideration for a later bargain Rescission: a remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made

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

contract performance involves unforeseen difficulties