BLAW Chapter 11 – Flashcards
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Kingston promises to pay Melina $500 to install a sump pump in his warehouse. Melina com¬pletes the installation. The act of installing the pump
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is the consideration that creates Kingston's obligation to pay Melina.
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Jenilee promises to pay Kyle $500 because "he does not have as much money as other people." Jenilee's promise is
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not enforceable because Kyle has not given consideration in return.
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Henry promises not to open his restaurant before 10:00 A.M. if Suzy, who owns a bakery next door to him, promises to close her bakery by 4:00 P.M. Henry's consideration is
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a forbearance.
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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 consid¬eration ex-changed by the parties must be
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legally sufficient.
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Aron 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
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legally sufficient.
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Sparky offers Teodora $1,000 for her collection of rare coins. She ac¬cepts. If a dispute arises, a court would likely
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not question the adequacy of the consideration.
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Quentin questions whether there is consideration for his contract with Rainey to exchange his performance with the Symphonic Saxophone Sextet 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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Mobile Minutes Company offers Nate an unlimited number of monthly phone minutes for $4.50 per month. Nate ac¬cepts. If a dispute arises, a court would likely
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not question the adequacy of the consideration.
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Bridey defends against a suit for breach of contract by Continental Mortgage Company by claiming that their deal—a mortgage loan secured by Bridey's purchase of a house—was unfair because the consideration for their contract was inadequate."Adequacy" of consideration refers to
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"how much" consideration is given.
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Bridey defends against a suit for breach of contract by Continental Mortgage Company by claiming that their deal—a mortgage loan secured by Bridey's purchase of a house—was unfair because the consideration for their contract was inadequate.The court is most likely to evaluate the adequacy of consid¬era¬tion if
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there is a large disparity in the amount or value of the consideration exchanged.
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Bridey defends against a suit for breach of contract by Continental Mortgage Company by claiming that their deal—a mortgage loan secured by Bridey's purchase of a house—was unfair because the consideration for their contract was inadequate.If, as Bridey claims, the consideration for this contract is inadequate, it may indicate a lack of
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voluntary consent to the contract on Bridey's part.
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Under a contract with Valley Vineyard, Walsh begins grading a terraced hillside for the planting of grapes. Halfway through the project, Walsh asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." Valley agrees but later refuses to pay. Their agreement is
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unenforceable because Walsh's performance was a preexisting duty.
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Frisco offers to buy a Gibson guitar owned by Hayden for twice what she paid for it. She accepts and hands the guitar to Frisco. Her delivery of the guitar is
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consideration.
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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. 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
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unenforceable due to the preexisting duty rule.
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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. If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased, the agree¬ment is
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unenforceable due to the preexisting duty rule.
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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. If Teatro says it is asking for the extra $250,000 because it has encountered extraordinary unforeseen difficulties that will add consid¬erable cost to the project, the agreement is
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enforceable because of unforeseen difficulties.
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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. The next day, Sally changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sally and Tasty
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may agree to a new contract that includes the new price.
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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. Sally and Tasty
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may rescind their contract to the extent that it is executory.
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Mariah promises to pay her assistant Nadine $10,000 in consideration of the ser¬vices she provided over the years. Mariah never pays Nadine. Mariah is
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not liable, because the consideration is in the past.
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Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable
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under no circumstances.
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Mobile Media Company contracts to hire Nada for one year at $35 per hour, reserving the right to cancel the contract at any time after Nada begins performance by giving two weeks' notice. This promise is
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an enforceable contract.
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Dave's uncle tells Dave that if "he feels that Dave deserves it," he will give Dave $1,000 when Dave graduates from college. Dave's uncle's promise is
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illusory.
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Sully signs a contract to borrow $200,000 from Riverside Bank to buy a house. In the contract, Sully agrees to pay a certain rate of interest on the amount of borrowed funds at monthly intervals for thirty years. This debt is
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liquidated.
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Produce Packaging Company promises its employees a 10 percent raise at the end of the year if productivity has increased and management feels the raise is warranted. Produce Packaging must
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do nothing.
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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 considera¬tion if
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something of value passed between the parties.
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Gustaf and Hilltop Country Club disagree as to the exact amount Hilltop owes Gustaf for his landscaping work. They form a new agreement that, on fulfillment, will discharge the prior obli¬gation. This is
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an accord and satisfaction.
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Apple & Pear Orchards contracts to hire Brigit for one year to tend the fruit in its commercial orchards but reserves the right to cancel the employment on thirty days' notice at any time after Brigit begins work. This promise is
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enforceable.
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Qiana writes a check to Payday Loans, Inc., in an amount that represents half of her debt to the lender. On the back of the check, Qiana includes the words "payment in full." Payday agrees to accept the lesser sum and cashes the check. This dis¬charges the entire debt
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if the debt is unliquidated.
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Franzea is injured in an accident caused by Gentry. Gentry agrees to pay Franzea $2,500 if she agrees to release him from further liability. She agrees. If Franzea's damages ultimately exceed $2,500, she can collect
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nothing more from Gentry.
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After an accident with a driver for Onyx Security Company, Paul signs a covenant not to sue Onyx for damages in a tort action if it pays for the damage to his car. This covenant
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bars recovery only if Onyx pays.
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Twyla's dock is damaged in an accident caused by Ulric's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulric fails to pay, Twyla can bring an action for breach of contract. This agreement is
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a covenant not to sue.
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Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is
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liable to Niki under the doctrine of promissory estoppel.
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Rudy files a suit against Shakes & Shingles, Roofing Contractor, Inc., under the doctrine of prom¬issory estoppel. Rudy must show that
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he justifiably relied on Shakes & Shingles' promise to his detriment.
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Lea signs a contract with Metro Business Loans, Inc., to borrow $25,000 to remodel Lea's Hair Care Salon. Lea does not repay the loan. Metro fails to sue within the time prescribed by the applicable statute of limitations. Later Lea promises to pay the debt. To be enforceable, this promise needs
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no consideration.
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Claudia pledges to donate $10,000 to Disaster Relief & Recovery Inc. (DR&R). On the basis of the pledge, DR&R orders additional supplies. If Claudia does not fulfill the pledge, a court may enforce it
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under the doctrine of promissory estoppel.
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Richard is an adult. He enters into a contract to sell sixteen-year-old Jane his car for $3,000. The next day Richard receives an offer of $4,000 for his car from twenty-year-old Bill. Richard
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cannot disaffirm his contract with Jane because he is an adult.
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Chris, a minor, signs a contract to purchase alcoholic beverages for Dine & Drink, his parents' restaurant. The contract is
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void as a matter of law.
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Katie buys a car when she is seventeen. When she is twenty-five, Katie tries to disaffirm the contract and recover all her car payments. A court will likely find that the contract was
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ratified and Katie cannot recover her payments.
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At age seventeen, Daryl enters into a contract to buy a dozen movies from eHD TV Stream, Inc., an online video service. Soon after reaching the age of ma-jority, Daryl attempts to disaffirm the contract. eHD files a suit against him. The court will most likely consider the contract ratified if it is
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executed.
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Olivia, a minor, signs a contract to buy a bike from Phil, the owner of SuperCycles Bike Store. Olivia's right to disaffirm the contract
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does not change the fact that Phil is bound by the contract.
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Gabriella and Esteban are emancipated minors who, after their emancipation, marry each other. Later, they enter into a contract to buy a condominium. In this sequence of events, most likely, their minority status
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terminated on their emancipation.
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Fletcher signs a contract to buy a new electric guitar and amplifier just before reaching the age of major¬ity. After reaching the age of majority, Fletcher does not take possession or make payments. With respect to the contract, most courts would hold that this is
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disaffirmance.
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Chet, a minor, signs a contract with Porsha, an adult. The contract is
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voidable at the option of Chet.
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On Mitchell's eighteenth birthday, he decides that he no longer wants to keep a fishing boat he bought from Water Craft, Inc., when he was seventeen. His right to disaffirm the deal will depend on
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whether Mitchell acts within a reasonable period of time.
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Eli, a minor, buys an automobile insurance policy from Faithful Insurance Company and pays a $1,000 pre¬mi¬um. If Eli can disaffirm the contract, he can most likely recover
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$1,000.
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Gaye, a minor, signs a contract to buy a motorcycle from Hi-Valu Cycles by mis¬representing her age as twenty-one. Gaye fails to make the pay¬ments. Hi-Valu sues. Ordinarily, Gaye can
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return the motorcycle and avoid further liability.
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Beth is a minor. She buys a set of sessions with a personal trainer, and a water bottle and some weights from a fitness store. Later, Beth decides that she does not want the water bottle or weights. In most states, Beth
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can only disaffirm the contract if she returns all the goods.
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Ruthie, a minor, charges the cost of an expensive leather jacket at a Girl's Trend store. Two nights later, Ruthie loses the jacket at Minors Only Club. She disaf¬firms the jacket's purchase. Ruthie owes Girl's Trend the reasonable value of the jacket
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if it is deemed a "necessary."
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Lucy, a minor, disaffirms a contract for necessaries without returning the goods. To Manny's Food Mart, the seller, Lucy is required to pay
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the reasonable value of the goods.
