Chapter 09 - Consideration and Cyber-Payments
VII. Related Cases
1. In the case of Frey v. Sovine, 58 N.C. App. 731, 294 S.E.2d 748 (1982), Michael
Sovine wrote two bad checks to Robert Barrett. Barrett then had warrants issued for
Sovine’s arrest. Barrett also went to Sovine’s mother, threatening to have her son put
in jail if he did not pay his debts. Frightened by his threats, Mrs. Sovine signed a
promissory note and a deed of trust giving security interest on her home to Barrett in
exchange for his promise not to pursue criminal charges against her son. The court
held that the note and deed of trust were void and unenforceable because they were
executed as a result of coercion and duress. The court also ruled that dismissal of the
criminal warrants against her son was not valid consideration because it was against
2. Danby guaranteed that the Osteopathic Association would receive credit for bank
loans totaling $55,000. The Association, a charity, was using the funds to build a
hospital. After the hospital had used $31,000 of the credit available, Danby became
dissatisfied with the construction of the hospital and attempted to withdraw his
guarantee for the rest of the promised funds. In Danby v. Osteopathic Hospital
Association of Delaware, 34 Del. Ch. 427, 104 A.2d 903(Del.1954), the court ruled
that, based on the doctrine of promissory estoppel, the guarantee could not be
withdrawn. The hospital relied on the promise—it might never have agreed to a loan
contract knowing funding might be withdrawn at any point in the project.
3. A Porsche owner was experiencing problems with the automobile’s clutch system, so
he took the car in to be repaired. The new maintenance included a six-month
warranty. When the Porsche owner soon after experienced the same problems, he
took the car back to the shop, where his chauffer was allegedly promised the repair
would be covered by the warranty. However, the repair shop later refused to pay for
the repairs, asserting that the repair was due to driver abuse. The court ruled that the
oral promise to repair allegedly made to the chauffer was not supported by any new
consideration and therefore did not constitute an enforceable contract. Schupak v.
Porsche Audi Manhattan, 541 N.Y.S.2d 412 (N.Y. 1989).
VIII. Teaching Tips and Additional Resources
1. Information from the Internal Revenue Service regarding bartering is available at
2. Additional information regarding Roman Emperor Justinian, referenced in the text,
can be found on the website of the Metropolitan Museum of Art at
3. A timeline for philanthropy in the U.S. is available from the website of the National
Philanthropic Trust at http://www.nptrust.org/history-of-giving/timeline/2000s/.
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