Swaggy-P: Consideration – Flashcards
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In contract law, "consideration" refers to the time that a party takes to evaluate a deal.
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If a promise is made, it will be enforced.
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To be legally sufficient, consideration must include something of economic value.
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Failing to use the word consideration in an agreement means that no consideration has been given.
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A bargained-for exchange is one of the elements of consideration.
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A promise to do something that one has a prior legal duty to do is not consideration
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Inadequate consideration may reflect a lack of bargained-for exchange.
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Risks ordinarily assumed in business constitute consideration for the modification of a contract.
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Extraordinary difficulties that were unforeseen at the time a contract was formed do not justify a demand for additional compensation.
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Rescission is the substitution of one party to a contract for a third party, who agrees to assume the contractual duties.
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An obligation is enforceable only if it is supported by past consideration.
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Any promise made with respect to a past event is enforceable because the event is certain—it has already occurred.
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If a debt is in dispute, an accord and satisfaction cannot take place.
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A covenant not to sue always bars further recovery.
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An accord and satisfaction is used to discharge an unliquidated debt.
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In many states, a release requires a signed writing.
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A release bars further recovery beyond the terms stated in the release.
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Promissory estoppel requires reliance of a substantial and definite character.
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The doctrine of promissory estoppel does not apply unless there is a clear and definite promise.
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A promise to pay a debt for which a statute of limitations bars recovery is an unenforceable promise.
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Rollo promises to perform, for a price, shoe repair services in affiliation with Togs 'n Things, a clothing store. To support a contract, the consideration exchanged by the parties must be
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legally sufficient.
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Triple-D Cinemas promises to pay Shakir $1,000 to repair and clean its marquee. The act of doing this work is
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consideration.
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Shila promises to pay Blaine $500 because "he does not have as much money as other people." Shila's promise is
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not enforceable because Blaine has not given consideration in return.
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Braxton questions whether there is consideration for his contract with Tawny to exchange his accounting services for her payment of a certain amount. To constitute consideration, there must be
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a bargained-for exchange.
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Sonic Board Corporation files a suit against Custom Fabricators Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if
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something of value passed between the parties.
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Chip's Chips Company agrees to supply Delicioso Café with all the corn chips that it requires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Chip's asks Delicioso to pay a higher price for the chips. This request is
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valid due to the unforeseen difficulty of the sudden price increase.
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Jeff offers Kelly $500 for her three-year-old laptop computer. Kelly accepts. If a dispute arises, a court would likely
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not question the adequacy of the consideration.
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Todos Ltd. agrees to supply United Steel, Inc., with minerals from Venezuela. When the government is unexpectedly overthrown in a revolution, Todos can obtain the goods only at a much higher price. United agrees to pay but later files a suit to recover the difference. The court will most likely rule that
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an unforeseen difficulty supported the contract modification here.
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Fact Pattern 12-B1 (Questions B9-B10 apply) Sal 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.
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Refer to Fact Pattern 12-B1. The next day, Sal changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sal and Tasty
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may agree to a new contract that includes the new price.
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Refer to Fact Pattern 12-B1. Sal and Tasty
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may rescind their contract to the extent that it is executory
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Suki works for Renaldo. At the end of her first year, Renaldo promises to pay her a bonus for her "four quarters of success." Renaldo's promise is
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unenforceable because Suki's performance is past.
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Metal Fabrication Corporation promises to give stock options to Sigourney for processes she has already designed for the firm. This promise is
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unenforceable.
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Speedy Assembly Company promises its employees a 10-percent raise at the end of the year if productivity has increased and management feels it is warranted. Speedy must
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do nothing.
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Joel contracts to hire Huong for one year to tend the orchids in his commercial greenhouse but reserves the right to cancel the employment on one month's notice at any time after Huong begins work. This promise is
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enforceable.
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Mei writes a check to Nat in an amount that represents half of her debt to him. On the back of the check, Mei includes the words "payment in full." Nat cashes the check. This discharges the entire debt
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if the debt is unliquidated.
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In a skateboarding accident with Ryan, Starla is injured. Ryan's insurance company's offers her $25,000 to release him from liability, and she accepts. Later, she learns that her injuries are more serious than she realized. The release
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bars Starla's further recovery from Ryan.
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George and Hildy disagree as to the exact amount one owes the other. They form a new agreement that, on fulfillment, will discharge the prior obligation. This is
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an accord and satisfaction.
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Quinn promises to sell his recreational vehicle (RV) to Sid, who builds a structure behind his house in which to keep it. Quinn's later attempt to renege on the promise is
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not effective if Sid detrimentally relied on Quinn's promise.
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Gino files a suit against Free-Flo Plumbing Corporation under the doctrine of promissory estoppel. Gino must show that
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he justifiably relied on Free-Flo's promise to his detriment.
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Credit & Debt Corporation loans Evelyn $25,000 to start a new business. Evelyn does not pay, but Credit & Debt fails to sue within the time prescribed by the applicable statute of limitations. Evelyn promises to pay a portion of the debt even though recovery is barred. Credit & Debt can sue to recover
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the amount promised.
