BLW302 Chapter 13

Adequacy of consideration refers to

"how much" consideration is given

Key promises to pay Liv, his niece, $5,000 if she obtains her degree at Metro College, where she is in her third year. Liv graduates. Key must pay because

Liv obtained a degree at Metro.

To constitute consideration, there must be

a bargained-for exchange

Ann's Sandwich Shop and Bob's Coffee Bar are adjacent businesses. Ann, whose small shop has little room for her customers to sit, offers Bob a discount on purchases if he will allow her customers to sit at the tables on the sidewalk in front of his store. Bob's forbearance from asking Ann's customers not to use his tables is legally sufficient consideration

because Bob has a legal right to restrict the use of his tables.

Sports Bar and Tasty Tacos are adjacent businesses with adjoining parking lots. Sports Bar offers Tasty a discount on purchases if the restaurant will not tow the cars of Sports Bar's patrons who park in the restaurant's lot. The discount is legally sufficient consideration

because it is a promise of something of value.

EcoEnergy LLC files a suit against Fiber Optics Inc., claiming that the consideration for their contract is inadequate—that the plaintiff will not realize sufficient financial benefit from the deal to make it worthwhile. Most likely, the court will

not question the adequacy of consideration.

Fritz offers to buy a guitar owned by Holle for twice what she paid for it. She accepts and hands the guitar to Fritz. Holle's delivery of the guitar is

consideration

A promise made in return for an act or event that has already taken place is fully enforceable.

false

A promise to do something that one has no prior legal duty to do is not legally sufficient consideration.

false

A release enables recovery beyond that specified in its terms.

false

An accord and satisfaction is an agreement in which one party gives up the right to pursue a legal claim against another party

false

An option to cancel the performance of a contract before it begins does not make the promise illusory.

false

Consideration refers to one party's assessment of the other party to a contract.Consideration refers to one party's assessment of the other party to a contract.

false

Consideration refers to the objective determination of how much a bargain is worth.

false

If a party is already bound by contract to perform a certain duty, that duty can serve as consideration for a second contract.

false

In general, courts question the adequacy of consideration.

false

The elements of consideration, in a bilateral contract for a sale of goods, are the sale and the goods.

false

The performance of an action that one is not otherwise obligated to undertake is not legally sufficient consideration.

false

To apply the doctrine of promissory estoppel in a given situation, there must exist no clear or definite promise.

false

When the doctrine of promissory estoppel is applied, the promisor is estopped, or barred, from performing the promise

false

With respect to consideration, a bargained-for exchange refers to the location, such as a stock exchange, where the contracting parties negotiated their deal.

false

Normally, a court will evaluate the adequacy of consideration based solely on the comparative value of the things exchanged as part of agreement.

fasle

Sol offers Tiff $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely

not question the adequacy of the consideration

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump

is the consideration that creates Kim's obligation to pay Leo

Kris buys Liz's house for $300,000, which is the fair market value of the house. If the contract is later disputed in court, the court is likely to declare Kris's consideration

legally sufficient

Rory questions whether there is consideration for his contract with Silver Spurs Club to exchange his performance of country music on certain dates for Silver's payment of a certain amount. To constitute consideration, the value of whatever is exchanged must be

legally sufficient.

Maria is the sheriff of Narez, Texas. Oscar robs a Narez gas station and a $500 reward is offered for his capture. When, later, Maria finds and arrests him, with respect to the reward, she can

not collect it because she had a preexisting duty to capture Oscar.

Jen promises to pay Kam $500 because "she does not have as much money as other people." Jen's promise is

not enforceable because Kam has not given consideration in return

Raj defends against a breach-of-contract suit by Student Loan Corporation by claiming that their deal—a student loan—was unfair because the consideration for the contract was inadequate. With respect to Raj's defense, the court will most likely rule in favor of the lender on the ground that

the adequacy of the consideration is not for the court to determine.

A preexisting duty may arise out of a previous contract.

true

A preexisting duty may be imposed by law.

true

A promise is illusory when its performance depends solely on the discretion of the promisor.

true

A promise to pay a previous debt barred by a statute of limitations can be enforced without consideration.

true

Adequacy of consideration refers to "how much" consideration is given.

true

Consideration is the value given in return for a promise or in return or a performance.

true

Consideration must provide the basis for the bargain struck between contracting parties.

true

Exceptions to the preexisting duty rule include rescission.

true

Exceptions to the preexisting duty rule include unforeseen difficulties.

true

Forfeiting a right to sue to recover further damages can constitute consideration.

true

If a debt is liquidated, an accord and satisfaction cannot take place

true

Painting a garage can constitute "something of legally sufficient value."

true

Providing accounting services is "something of legally sufficient value."

true

Shockingly inadequate consideration can indicate fraud in a contract

true

Situations in which agreements lack consideration include those involving a preexisting duty.

true

To be legally sufficient, consideration must be something of value in the eyes of the law.

true

To enforce a contractual promise, there must be an exchange of consideration underlying the bargain.

true

To pay on receipt of certain goods is "something of legally sufficient value."

true

Two parties can mutually agree to rescind a contract only to the extent that it has been executed—otherwise, there is nothing to rescind.

true

With respect to consideration, the application of the rule regarding preexisting duty is meant to prevent extortion.

true

Under a contract with Soy Farms, Tai begins grading a terraced hillside for planting. Halfway through the project, Tai asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." The farm agrees but later refuses to pay. The agreement to pay more is

unenforceable because Tai's performance was a preexisting duty.