(Q1) Consideration & Illegal Agreements pg 12-13

Question 1

Consideration

Answer 1

• Whatever a promisor (offeror) gives or promises to give to another in exchange for that other person’s promise or action to give to them.
• Both parties must give consideration but does not have to be equal. Must be something of value

Question 2

Forbearance

Answer 2

promising not to do something. Can act as consideration if you had a legal right to do it.

Question 3

Partial payment of a past due obligation; can discharge the entire debt if

Answer 3

A) the lesser sum is accepted on a disputed amount
b) a receipt marked paid in full is given to debtor
c) there is a composition of creditors agreement

Question 4

Exceptions when consideration is not required by both parties

Answer 4

a) charitable subscriptions, pledges, etc.
b) promissory estoppel

Question 5

Divisible Contracts

Answer 5

Many parts that can be preformed separately

Question 6

Indivisible

Answer 6

All parts are performed as one

Question 7

What contracts are illegal by statute?

Answer 7

a) Gambling Contracts
b) Sunday Contracts
c) Usury
d) Unlicensed Operators
e)Sale of Prohibited Articles
f) Restraint of Trade

Question 8

Usury

Answer 8

charging an excessive rate of interest for the loaning of money

Question 9

Legal rate

Answer 9

by state statute

Question 10

Contract Rate

Answer 10

Agreed to by parties but regulated by statute

Question 11

Restraint of Trade

Answer 11

Price fixing, dividing trade territories, and lesson competition

Question 12

Contracts not to compete

Answer 12

can be legal if reasonable re: time and area

Question 13

Unlicensed Operators

Answer 13

illegal to operate certain businesses without a license; contracts made under unlicensed operators are void