Ch 11

Question 1

pre existing contractual duty

Answer 1

219
something a person is already under an obligation to do. a promise lacks consideration if a person promises to perform a pre existing duty
ex. firefighter cannot demand payment for fighting fires.

Question 2

special business contracts

Answer 2

221
law imposes an obligation of good faith on the performance of the parties to requirements and outputs contracts
output contract, requirements contract, best efforts contract

Question 3

promissory estoppel

Answer 3

fasle

222

Question 4

gratuitous promise

Answer 4

217

promise that is unenforceable because it lacks consideration.

Question 5

consideration- forbearance

Answer 5

216
something of legal value given in exchange for a promise.
forbearance of legal right such as accepting an out-of-court settlement in exchange for dropping a lawsuit

Question 6

Ralph, knowing that his son, Ed, desires to purchase a tract of land, promises to give him the $25,000 he needs for the purchase. Ed, relying on this promise, buys an option on the tract of land. Can Ralph rescind his promise?

Answer 6

It probably depends on how much Ed paid for the option. Under the doctrine of promissory estoppel, the promise will be enforced if injustice can be avoided only by the enforcement of the promise. If Ed paid $25 or $50, the promise will probably not be enforced and Ralph can rescind his promise.

Question 7

George owed Keith $800 on a personal loan. Neither the amount of the debt nor George’s liability to pay the $800 was disputed. Keith had also rendered services as a carpenter to George without any agreement as to the price to be paid. When the work was completed, an honest and reasonable difference of opinion developed between George and Keith with respect to the value of Keith’s services. Upon receiving Keith’s bill for the carpentry services for $600, George mailed in a properly stamped and addressed envelope his check for $800 to Keith. In an accompanying letter, George stated that the enclosed check was in full settlement of both claims. Keith endorsed and cashed the check. Thereafter, Keith unsuccessfully sought to collect from George an alleged unpaid balance of $600. May Keith recover the $600 from George?

Answer 7

Keith may recover some amount from George. Cashing the check did not constitute consideration for the $600 bill as George already owed an undisputed amount of $800 to Keith, so George did not pay any amount toward the $600 and thus there was no consideration.

Question 8

Discuss and explain whether there is valid consideration for each of the following promises:

a. A and B entered into a contract for the purchase and sale of goods. A subsequently promised to pay a higher price for the goods when B refused to deliver at the contract price.
b. A promised in writing to pay a debt, which was due from B to C, on C’s agreement to extend the time of payment for one year.
c. A orally promised to pay $150 to her son, B, solely in consideration of past services rendered to A by B, for which there had been no agreement or request to pay.

Answer 8

a. Maybe–if the failure to pay was for a good faith reason under the Uniform Commercial Code
b. Yes–extending time is a legal detriment
c. No–past consideration