Chapter 12 Consideration (B-Law) LEARNING INFO

Liquidated Debt

A debt that is due and certain in amount

Unliquidated Debt

A debt that is uncertain in amount

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.

1. obligated 2. refraining

A preexisting duty might exist because of ___________________ or a duty imposed by law.

a duty imposed by a previous contract

Shockingly inadequate consideration can indicate the existence of what exceptions? Choose three. a. Fraud b. Unawareness c. Mistake of law d. Undue influence e. Duress f. Ignorance

a. Fraud d. Undue influence e. Duress

Carmen agrees to cook twenty dinners for Hal. In exchange, Hal will repair all the plumbing in Carmen's house. Carmen has offered legally sufficient consideration, because Carmen has promised something of value. T or F

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. T or F

TRUE

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

TRUE

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

prior

Consideration can be defined as ________________________.

something of value given in exchange for a promise

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 or 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: a. Jill will not win, because this is an illusory promise without consideration. b. Jill will not win, because Jill didn't prove that her work was satisfactory. c. Jill will win, because this an accord and satisfaction.

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

What elements are required for the promissory estoppel doctrine to apply? (choose all that apply) a. The promisee reasonably relied on the promise. b. The promisee acted or refrained from some act. c. The promise suffered some type of harm. d. There must be a clear and definite promise. e. The promisor should have expected that the promise would rely on the promise. f. The promisor intended for harm to occur. g. Enforcement of the promise is necessary to avoid injustice.

a. The promisee reasonably relied on the promise. b. The promisee acted or refrained from some act. c. The promise suffered some type of harm. d. There must be a clear and definite promise. e. The promisor should have expected that the promise would rely on the promise. g. Enforcement of the promise is necessary to avoid injustice.

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

b. an accord and satisfaction.

If a promise is made without consideration: a. it will always be enforced. b. it can sometimes be enforced. c. it can never be enforced.

b. it can sometimes be enforced.

The goal of the doctrine of promissory estoppel is: a. to prevent unfairness when the terms of the contract are vague. b. to prevent unfairness even if no promise was made. c. to prevent unfairness even though no contract exists.

c. to prevent unfairness even though no contract exists.

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

contract performance involves unforeseen difficulties

Promissory estoppel is also known as ____________.

detrimental reliance

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): a. specified accord. b. preliminary accord. c. accord and satisfaction. d. covenant not to sue. e. release.

e. release.

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

estopped from asserting