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Exam 11: Consideration

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Question 1

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A promise made in return for an act or event that has not yet taken place is unenforceable. 

A) True
B) False

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False

Question 2

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For consideration to have "legally sufficient value," it must consist of goods or money. 

A) True
B) False

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Question 3

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Dean,the president of Billing & Credit Company,promises to pay his employee Ewing,who is dangerously obese,$10 for every pound that he loses within the next two years.Ewing agrees,diets and exercises,loses 154 pounds,and asks Dean for $1,540.Dean refuses to pay,saying that he does not remember the promise,but that even if he did make it,there was no consideration,and Ewing's improved health is a sufficient benefit for his effort and sacrifice.Ewing files a suit against Dean.In whose favor is the court likely to rule,and why?​

Fact Pattern 11-5 Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury. -Refer to Fact Pattern 11-5.In Carmen's suit against Dex to recover her repair and medical expenses,Carmen will most likely recover​ 

Refer to Fact Pattern 11-1.Estelle's forbearance from towing is legally sufficient consideration​ 

A release does not require consideration to be legally binding. 

After an accident with a vehicle licensed to Guardian Security Company,Heidi signs a covenant not to sue Guardian Security for damages in a tort action if it pays for the damage to her car.This covenant is​ 

Martha is the sheriff of Junction,Texas.Alex robs a gas station on the edge of town and then evades capture.A $500 reward is offered for his capture.The following week,Martha captures Alex.Martha​ 

Valley Paragliders Association files a suit against Wing Designers,Inc.,claiming that the consideration for their contract is inadequate.The court will most likely not examine the adequacy of the consideration if​ 

Aaron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country tunes at select social events for Banquet's payment of a certain amount.To constitute consideration,the value of whatever is exchanged must be​ 

Rescission is the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made. 

Fact Pattern 11-3 Sally contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract. -Refer to Fact Pattern 11-3.Sally and Tasty​ 

If a promise is made,it will be enforced. 

Essentially,adequacy of consideration concerns the fairness of the bargain. 

Applied Methods Corporation promises to give stock options to Belden,a production designer,for processes he has already designed.This promise is​ 

Fact Pattern 11-4 Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay. -Refer to Fact Pattern 11-4.If Teatro offers no reason for the extra $250,000,but says only that it will stop work if it is not paid,the agreement is​ 

A transaction that lacks a bargained-for exchange lacks an element of consideration. 

Kingston promises to pay Melina $500 to install a sump pump in his warehouse.Melina completes the installation.The act of installing the pump​ 

Fact Pattern 11-1  Dave's Hobby Town and Estelle's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Estelle a discount on purchases from Dave's store if Estelle will not tow the cars of Dave's customers who park in Estelle's lot. -Refer to Fact Pattern 11-1.Dave's discount is legally sufficient consideration​ 

Centre City Properties,Inc.,owns and manages a warehouse.DIY Home Improvement Stores agrees to lease the warehouse for six years.Under the lease,DIY is obligated to pay all of the utility costs.Two years into the term,DIY asks Centre City to modify the lease to provide that the utility costs will be split equally between them.The landlord agrees,but later decides it does not want to share the costs and refuses to pay.Is Centre City bound to its agreement to share the utility costs? Why or why not?​