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Question 1

What is sham/nominal consideration?

Answer 1

A promise made by one party that isn’t intended to be performed

Question 2

What is an example of sham consideration?

Answer 2

If you want to give your sister your car, so you sell it to her for one dollar (consideration in name only).

Question 3

Does nominal consideration make a conditional donative promise enforceable?

Answer 3

No, even though it looks like a bargain, fulfilling the condition is not the price of the promisor’s performance

Question 4

How do you know if a conditional promise is donative?

Answer 4

• donative: parties think the condition is just part of making the gift
• bargain: parties think the condition is the price of the promise

Question 5

If you call your friend and tell him you have a gift for him, and he must come over right away to get it, is that enforceable?

Answer 5

No, because coming over was not the price of the gift, it was just a way to make it happen

Question 6

What can you use to prove there wasn’t a contract in donative promise situations?

Answer 6

Parol evidence

Question 7

What are the two views about whether donative promises are enforceable?

Answer 7

• majority: consideration has not been paid

- minority: consideration present

Question 8

If you surrender a valid claim, can that be consideration?

Answer 8

Yes, if it is bargained for

Question 9

If you are trying to surrender a claim that you know is unfounded as consideration, what is your duty?

Answer 9

Not to assert it

Question 10

Contracts entered under threat will be set aside for what?

Answer 10

Duress

Question 11

If you surrender an invalid claim as consideration, but are unsure about its validity, is that good consideration?

Answer 11

Yes, if it was asserted in good faith and if a reasonable person would believe it was well-founded

Question 12

Under the UCC, does a promise to pay a pre-existing debt need new consideration?

Answer 12

No

Question 13

What are two different views about promises to pay for benefits that are already received when there was no expectation of payment at the time?

Answer 13

• Majority: enforceable, and so are promises to pay for services rendered as favours. Liable to pay reasonable value
• Minority: promise is a rebuttable evidentiary admission of value of services

Question 14

Forbearance to sue is valid consideration if the claimant honestly believes what?

Answer 14

That he has a valid claim, regardless of how reasonable that belief is

Question 15

What is the best way for a donative gift to be enforced?

Answer 15

Promissory estoppel, after the promise was injuriously relied on

Question 16

If your mom says she’ll pay for your education, so you quit your job, and then she doesn’t pay, what happens?

Answer 16

The courts will probably give damages for quitting your job, but not for the full cost of your education (based on promissory estoppel).

Question 17

What is the extent that promissory estoppel will enforce a promise?

Answer 17

To the extent of the reliance

Question 18

Promissory estoppel says that reliance is a substitute for what?

Answer 18

Consideration

Question 19

If your aunt promises to reimburse you $1000 for opera tix you will use yourself, and you buy the tickets for $500, and she refuses to pay, how much will promissory estoppel make her pay?

Answer 19

• Williston’s view: entitled to the full extent of promised sum ($1000)
• R2: $500, which is the extent of reliance

Question 20

Promissory estoppel can save agreements that fail for enforceability, like what?

Answer 20

• indefiniteness
• not complying with SOF
• noncompliance with parole evidence rule