STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—1ȱQUIZȱ
LegalȱConceptsȱ
Directions:ȱInȱtheȱAnswersȱcolumn,ȱwriteȱtheȱletterȱfromȱColumnȱ1ȱthatȱrepresentsȱ
theȱwordȱorȱphraseȱthatȱmatchesȱtheȱstatementȱinȱColumnȱ2.ȱ
ȱColumnȱ1ȱȱColumnȱ2ȱAnswersȱ
ȱȱ 1.ȱAȱpersonȱwhoȱreceivesȱaȱgiftȱ1. _______ ȱ
ȱȱ 2.ȱAȱpromiseȱnotȱtoȱdoȱsomethingȱ2. _______ ȱ
ȱȱ 3.ȱAȱpersonȱwhoȱpromisesȱanȱactionȱorȱȱ 3. _______ ȱ
forbearanceȱ
ȱȱ 4.ȱAȱtokenȱamountȱofȱmoneyȱgivenȱasȱȱ 4. _______ ȱ
considerationȱ
ȱȱ 5.ȱ
Aȱlegalȱconceptȱthatȱdistinguishesȱbetween
ȱȱ 5. _______ ȱ
socialȱpromisesȱandȱseriousȱtransactionsȱ
ȱȱ 6.ȱAȱchangeȱinȱaȱparty’sȱlegalȱpositionȱasȱaȱȱ 6. _______ ȱ
resultȱofȱaȱcontractȱ
ȱȱ 7.ȱAȱtransferȱofȱownershipȱwithoutȱreceivingȱȱ 7. _______ ȱ
anythingȱinȱreturnȱ
ȱȱ 8.ȱAȱpersonȱtoȱwhomȱaȱpromiseȱisȱmadeȱ8. _______ ȱ
ȱȱ 9.ȱTheȱmostȱcommonȱformȱofȱlegalȱvalueȱ9. _______ ȱ
2-38 Chapter 8 Consideration
ȱȱ 10.ȱAȱpersonȱwhoȱgivesȱaȱgiftȱ10._______ ȱ
A.ȱforbearanceȱ
B.ȱconsiderationȱ
C.ȱpromiseeȱ
D.ȱexchangeȱofȱȱ
ȱtwoȱbenefitsȱ
E.ȱdonorȱ
F.ȱnominalȱȱ
ȱconsiderationȱ
G.ȱpromisorȱ
H.ȱlegalȱvalueȱ
I.ȱdoneeȱ
J.ȱgiftȱ
LegalȱApplicationsȱ
11.ȱTheȱCromikasȱareȱgoingȱonȱaȱcruiseȱforȱtheirȱfiftiethȱweddingȱanniversary.ȱTheyȱ
college.ȱIsȱthereȱconsiderationȱforȱbothȱparties?ȱIsȱtheȱcontractȱenforceable?ȱ
Explainȱyourȱanswer.ȱ
ȱ
12.ȱYourȱneighborȱownsȱanȱantiqueȱcar,ȱbutȱheȱnoȱlongerȱhasȱroomȱtoȱstoreȱit.ȱYouȱ
knowȱtheȱcarȱwouldȱbeȱworthȱ$30,000ȱifȱitȱwereȱrestored.ȱYouȱofferȱtoȱgiveȱyourȱ
neighborȱ$1,500ȱforȱtheȱcar.ȱIsȱthisȱaȱvalidȱcontract?ȱExplainȱyourȱanswer.ȱ
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—1ȱPRACTICEȱACTIVITY
Readȱtheȱfollowingȱcasesȱandȱanswerȱtheȱquestionsȱaboutȱthem.ȱAttachȱaȱpageȱifȱadditionalȱ
spaceȱisȱneededȱforȱanswers.ȱ
ȱ
1.ȱWilliamȱE.ȱStoryȱpromisedȱhisȱnephewȱthatȱheȱwouldȱpayȱhimȱ$5,000ȱonȱhisȱ21stȱ
birthdayȱifȱheȱwouldȱnotȱsmoke,ȱdrink,ȱswear,ȱorȱgambleȱbeforeȱthatȱtime.ȱWhenȱ
becauseȱtheȱnephewȱhadȱactuallyȱbenefittedȱfromȱhisȱbehaviorȱandȱthereȱwasȱ
thereforeȱnoȱconsiderationȱforȱtheȱpromise.ȱIsȱtheȱexecutorȱcorrect?ȱExplain.ȱ
[Hamerȱv.ȱSidway,ȱ27ȱN.E.ȱ256ȱ(N.Y.ȱCt.ȱApp.ȱ1891)]ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
2.ȱMrs.ȱAhernȱcalledȱaȱrepairȱpersonȱtoȱfixȱherȱairȱconditioner,ȱwhichȱhadȱbrokenȱ
duringȱaȱheatȱwave.ȱTheȱrepairsȱcameȱtoȱ$762.ȱAlthoughȱtheȱfirstȱrepairȱpersonȱ
moneyȱheȱchargedȱherȱlessȱtheȱcostȱofȱtheȱsecondȱrepair.ȱTheȱrepairȱpersonȱ
claimedȱthatȱheȱdidȱsomeȱworkȱandȱthatȱtheȱcourtȱwasȱnotȱentitledȱtoȱlookȱatȱtheȱ
adequacyȱofȱtheȱconsideration.ȱWhatȱdoȱyouȱthink?ȱ[Ahernȱv.ȱKnecht,ȱ563ȱN.E.ȱ2dȱ
787ȱ(Ill.ȱApp.ȱCt.ȱ1990)]ȱ
Chapter 8 Consideration 2-39
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—1ȱRETEACHȱ
Directions:ȱȱWriteȱtheȱanswersȱtoȱQuestionsȱ1–14ȱonȱtheȱblanksȱprovided.ȱTheȱanswerȱ
toȱQuestionȱ15ȱshouldȱappearȱinȱtheȱverticalȱboxes.ȱ
ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱ15.ȱ
ȱȱ1.ȱȱȱȱȱȱȱȱȱȱȱȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱȱ__ȱȱ
ȱȱ2.ȱȱȱȱȱȱȱȱȱȱȱȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱȱ__ȱȱ
ȱȱ3.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ__ȱ__ȱȱ__ȱ__ȱ__ȱȱ
ȱȱ4.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ__ȱȱ__ȱ__ȱ__ȱȱ
ȱȱ5ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ__ȱȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ
ȱȱ6.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ__ȱ__ȱ__ȱ__ȱ__ȱȱ__ȱ__ȱȱ
ȱȱ7ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ ȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ
ȱȱ8.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ__ȱȱ ȱ__ȱ__ȱȱ
ȱȱ9.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ ȱ__ȱ__ȱ__ȱ__ȱ__ȱ
11.ȱȱȱȱȱȱȱȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱȱ__ȱ__ȱ__ȱ__ȱȱ
12.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ__ȱ__ȱ__ȱȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ__ȱ
13.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ__ȱ__ȱȱ__ȱ__ȱ__ȱ__ȱ__ȱȱ
14.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ__ȱ__ȱ__ȱȱ__ȱ__ȱ__ȱȱȱ
ȱ
ȱȱ1.ȱChangeȱinȱaȱparty’sȱlegalȱpositionȱ
ȱȱ2.ȱConsiderationȱcanȱbeȱconferredȱbyȱgivingȱaȱbenefitȱorȱincurringȱa(n)ȱ__________.ȱ
ȱȱ3.ȱPaymentȱofferedȱinȱfullȱsettlementȱbyȱtheȱdebtorȱandȱacceptedȱbyȱtheȱcreditorȱtoȱ
settleȱaȱdisputedȱclaimȱisȱa(n)ȱ_________ȱandȱsatisfaction.ȱ
ȱȱ4.ȱPersonȱwhoȱreceivesȱaȱgiftȱ
ȱȱ5.ȱTypeȱofȱconsiderationȱthatȱinvolvesȱaȱtokenȱamountȱofȱmoneyȱ
ȱȱ6.ȱPersonȱtoȱwhomȱaȱpromiseȱisȱmadeȱ
ȱȱ7.ȱPersonȱtoȱwhomȱaȱdebtȱisȱowedȱ
ȱȱ8.ȱTransferȱofȱownershipȱwithoutȱreceivingȱanythingȱinȱreturnȱ
ȱȱ9.ȱAnȱagreementȱtoȱbuyȱallȱofȱtheȱproducer’sȱproductionȱisȱa(n)ȱ__________ȱȱȱȱȱȱȱ
contract.ȱ
10.ȱPersonȱwhoȱgivesȱaȱgiftȱ
11.ȱDistinguishingȱfactorȱbetweenȱsocialȱpromisesȱandȱrealȱtransactionsȱ
12.ȱPromiseȱnotȱtoȱdoȱsomethingȱ
13.ȱClauseȱinȱaȱcontractȱthatȱallowsȱyouȱtoȱescapeȱtheȱlegalȱobligationȱ
14.ȱSomethingȱforȱwhichȱaȱdetrimentȱcanȱbeȱexchangedȱ
15.ȱContractȱwhereinȱtheȱconsiderationȱisȱgrosslyȱinadequateȱsoȱasȱtoȱshockȱtheȱ
conscienceȱofȱtheȱcourtȱ
ȱChapter 8 Consideration
2-40
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—1ȱENRICHMENT
Thereȱisȱaȱwholeȱnewȱworldȱofȱlegalȱcontractsȱwithȱtheȱadventȱofȱcontractsȱbeingȱ
madeȱonline.ȱInternetȱlawȱisȱcurrentlyȱevolving,ȱandȱmanyȱlawsuitsȱhaveȱrecentlyȱ
beenȱbroughtȱbeforeȱtheȱcourts.ȱTheseȱwillȱserveȱasȱtestȱcases,ȱasȱtheȱissuesȱareȱsoȱ
new.ȱResearchȱoneȱorȱmoreȱofȱtheȱlawsuitsȱbroughtȱbeforeȱtheȱcourtsȱregardingȱ
onlineȱcontractsȱandȱInternetȱlaw.ȱUseȱtheȱspaceȱprovidedȱtoȱexpandȱonȱtheȱcase.ȱ
ȱ
1.ȱDescribeȱtheȱcase.ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
2.ȱIsȱtheȱcaseȱinȱaȱstateȱorȱfederalȱcourt?ȱHasȱtheȱcaseȱbeenȱdecidedȱyet?ȱIfȱso,ȱisȱtheȱ
caseȱbeingȱappealed?ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
3.ȱWhatȱissuesȱareȱimportantȱinȱthisȱcaseȱforȱtheȱfutureȱofȱcontractsȱmadeȱonline?ȱ
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—2ȱQUIZȱ
LegalȱConceptsȱ
Directions:ȱWriteȱYesȱorȱNoȱinȱtheȱAnswersȱcolumnȱtoȱindicateȱtheȱcorrectȱanswer.ȱ
ȱAnswersȱ
ȱ
1.ȱIfȱaȱpromiseȱisȱgivenȱforȱconsideration,ȱwillȱitȱbeȱbinding?ȱ1.ȱ______ ȱ
2.ȱIfȱaȱcontractȱcontainsȱaȱterminationȱclauseȱforȱanyȱreason,ȱȱ 2.ȱ______ ȱ
ȱisȱtheȱpromiseȱtoȱperformȱillusory?ȱ
3.ȱIfȱaȱcontractȱclauseȱallowsȱterminationȱonlyȱafterȱaȱchangeȱinȱȱ 3.ȱ______ ȱ
ȱdefinedȱcircumstances,ȱisȱtheȱpromiseȱillusory?ȱ
4.ȱDoesȱanȱoutputȱcontractȱrequireȱaȱsellerȱtoȱsupplyȱallȱtheȱneedsȱȱ 4.ȱ______ ȱ
ȱofȱaȱparticularȱbuyer?ȱ
5.ȱCanȱaȱpartyȱterminateȱaȱrequirementsȱcontractȱbyȱstoppingȱȱ 5.ȱ______ ȱ
ȱproduction?ȱ
6.ȱDoesȱexistingȱpublicȱdutyȱlimitȱpublicȱofficialsȱinȱtheirȱpromiseȱȱ 6.ȱ______ ȱ
ȱmaking?ȱ
7.ȱ
Canȱaȱpersonȱunderȱcontractȱsignȱanotherȱcontractȱthatȱoffersȱmore
ȱȱ 7.ȱ______ ȱ
ȱmoneyȱandȱbenefits?ȱ
8.ȱCanȱaȱdebtorȱsettleȱaȱclaimȱbyȱpayingȱlessȱthanȱtheȱfullȱamountȱȱ 8.ȱ______ ȱ
ȱandȱpromisingȱadditionalȱconsideration?ȱ
9.ȱIsȱtheȱpaymentȱofȱmoneyȱsufficientȱconsiderationȱforȱtheȱpromiseȱȱ 9.ȱ______ ȱ
ȱnotȱtoȱsue?ȱ
10.ȱDoesȱtheȱdebtorȱhaveȱtoȱagreeȱnotȱtoȱfileȱforȱbankruptcyȱinȱaȱȱ 10.ȱ______ ȱ
ȱcompositionȱofȱcreditors?ȱ
11.ȱIfȱtwoȱgiftsȱhaveȱlegalȱvalue,ȱareȱtheyȱconsiderationȱwhenȱȱ 11.ȱ______ ȱ
ȱtheyȱareȱpromised?ȱ
12.ȱCanȱanȱactȱthatȱhasȱalreadyȱbeenȱperformedȱserveȱasȱȱ 12.ȱ______ ȱ
ȱconsideration?ȱ
LegalȱApplicationȱ
13.ȱMarkȱowesȱConsueloȱ$800,ȱwhichȱheȱisȱtoȱpayȱbackȱinȱsixȱmonths.ȱMarkȱcannotȱ
payȱtheȱfullȱamount,ȱbutȱheȱcanȱpayȱConsueloȱ$650ȱrightȱaway.ȱIfȱConsueloȱ
acceptsȱtheȱ$650ȱinȱsatisfactionȱofȱtheȱdebtȱMarkȱowesȱtoȱhim,ȱisȱthereȱvalidȱ
considerationȱforȱbothȱparties?ȱWhyȱorȱwhyȱnot?ȱ
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom useȱ
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—2ȱPRACTICEȱACTIVITY
Readȱtheȱfollowingȱcasesȱandȱanswerȱtheȱquestionsȱaboutȱthem.ȱAttachȱaȱpageȱifȱadditionalȱ
spaceȱisȱneededȱforȱanswers.ȱ
ȱ
1972.ȱShortlyȱbeforeȱheȱwasȱscheduledȱtoȱretire,ȱheȱspokeȱtoȱoneȱofȱtheȱfoundersȱ
hisȱretirementȱcontinue.ȱWillȱitȱbeȱcontinued?ȱExplain.ȱ[Hayesȱv.ȱPlantationsȱSteelȱ
Co.,ȱ438ȱA.ȱ2dȱ1091ȱ(R.I.ȱ1982)]ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
2.ȱCarlȱWidmerȱowedȱseveralȱbills,ȱtotalingȱ$67.80,ȱtoȱtheȱGibbleȱOilȱCompany.ȱ
WidmerȱneverȱdisputedȱthatȱheȱowedȱGibbleȱtheȱamountȱofȱ$67.80,ȱandȱinȱhisȱ
claimedȱthatȱwhenȱGibbleȱcashedȱhisȱcheck,ȱitȱactedȱasȱanȱaccordȱandȱsatisfactionȱ
ofȱaȱdisputedȱdebt,ȱthusȱextinguishingȱtheȱdebt.ȱDidȱit?ȱExplain.ȱ[Widmerȱv.ȱ
GibbleȱOilȱCo.,ȱ421ȱS.W.ȱ2dȱ886ȱ(Ark.ȱ1967)]ȱ
Chapter 8 Consideration 2-43
STUDENT _______________________________________ CLASS _______________________ DATE _________
ȱLESSONȱ8—2ȱRETEACH
Directions:ȱUnscrambleȱtheȱlettersȱfollowingȱeachȱquestionȱandȱwriteȱtheȱanswerȱinȱ
theȱblankȱprovided.ȱAnswersȱmayȱconsistȱofȱmoreȱthanȱoneȱword.ȱ
ȱ
ȱȱ ȱȱȱȱ Answersȱ
2.ȱWhatȱpartȱofȱaȱcontractȱallowsȱbusinessesȱtoȱȱ 2.ȱ________________________ ȱ
withdrawȱifȱtheirȱcircumstancesȱchange?ȱȱ
3.ȱWhatȱtypeȱofȱcontractȱrequiresȱaȱbuyerȱtoȱȱ 3.ȱ________________________ ȱ
4.ȱWhatȱtypeȱofȱcontractȱrequiresȱaȱsellerȱtoȱȱ 4.ȱ________________________ ȱ
5.ȱWhatȱtypeȱofȱdebtȱoccursȱwhenȱtheȱpartiesȱȱ 5.ȱ________________________ ȱ
agreeȱtoȱtheȱexistenceȱandȱtheȱamountȱofȱtheȱ
6.ȱWhatȱtypeȱofȱagreementȱexistsȱifȱtwoȱpartiesȱȱ 6.ȱ________________________ ȱ
compromiseȱonȱtheȱamountȱofȱaȱdebt?ȱȱȱ
7.ȱWhatȱisȱaȱsettlementȱmadeȱbyȱpartiesȱwhenȱtheȱȱ 7.ȱ________________________ ȱ
8.ȱWhatȱisȱaȱgroupȱofȱcreditorsȱwhoȱagreeȱtoȱȱ 8.ȱ________________________ ȱ
acceptȱlessȱthanȱwhatȱtheyȱareȱentitledȱtoȱfromȱȱ
9.ȱWhatȱisȱaȱpersonȱtoȱwhomȱaȱdebtȱisȱowed?ȱȱ 9.ȱ________________________ ȱ
10.ȱWhatȱimpliedȱdutyȱdoȱbothȱpartiesȱhaveȱunderȱȱ 10.ȱ________________________ ȱ
contractsȱcontainingȱtermination,ȱoutput,ȱorȱ
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom useȱ
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—2ȱENRICHMENTȱ
Toȱbeȱconsideration,ȱaȱpromiseȱmustȱbeȱbinding.ȱSometimesȱcontractsȱcontainȱaȱ
clauseȱallowingȱanȱescapeȱofȱtheȱlegalȱobligation.ȱAsȱdefinedȱinȱtheȱlesson,ȱthisȱisȱ
saidȱtoȱbeȱanȱillusoryȱpromise.ȱAsȱyouȱdidȱinȱtheȱEnrichmentȱActivityȱforȱLessonȱ6—
2,ȱinterviewȱaȱcontractȱlawyerȱorȱaȱvarietyȱofȱindividualsȱwhoȱenterȱintoȱfrequentȱ
contractsȱasȱpartȱofȱtheirȱcareer.ȱSeeȱifȱyouȱcanȱfindȱexamplesȱofȱaȱcontractȱwithȱaȱ
terminationȱclause,ȱanȱoutputȱcontract,ȱandȱaȱrequirementsȱcontract.ȱIndicateȱ
pertinentȱdetailsȱofȱtheȱcontractsȱinȱtheȱspacesȱprovided.ȱ
ȱ
1.ȱTerminationȱclauseȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
3.ȱRequirementsȱcontractȱ
Chapter 8 Consideration 2-45
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—3ȱQUIZȱ
LegalȱConceptsȱ
Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ
whetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱ
ȱAnswersȱ
ȱ
1.ȱPromisesȱareȱenforcedȱunderȱtheȱdoctrineȱofȱpromissoryȱestoppel.ȱȱ1._____ ȱ
2.ȱPromisesȱcanȱbeȱenforcedȱifȱtheȱpromisorȱknewȱthatȱtheȱpromiseeȱȱ ȱ 2._____ ȱ
ȱwouldȱrelyȱonȱtheȱpromise.ȱ
3.ȱPromisesȱcanȱbeȱenforcedȱevenȱifȱtheȱpromiseeȱdoesȱnotȱactȱinȱȱ ȱ 3._____ ȱ
ȱrelianceȱonȱtheȱpromise.ȱ
4.ȱPromisesȱthatȱinvolveȱaȱminimalȱeconomicȱlossȱtoȱtheȱpromiseeȱȱ ȱ 4._____ ȱ
ȱareȱalwaysȱenforced.ȱ
5.ȱMostȱcourtsȱwillȱenforceȱaȱpromiseȱmadeȱtoȱaȱcharitableȱȱ ȱ 5._____ ȱ
ȱorganizationȱevenȱifȱnoȱspecificȱuseȱforȱtheȱmoneyȱisȱstated.ȱ
7.ȱAnȱindividualȱcannotȱsueȱforȱbreachȱofȱcontractȱorȱtortȱwhenȱtheȱȱ ȱ 7._____ ȱ
ȱstatuteȱofȱlimitationsȱhasȱpassed.ȱ
ȱ9.ȱMerchantsȱareȱboundȱbyȱfirmȱoffersȱforȱupȱtoȱthreeȱmonths.ȱȱ9._____
ȱȱ
LegalȱApplicationsȱ
10.ȱAȱlocalȱchurchȱisȱplanningȱtoȱexpandȱtheirȱsanctuaryȱtoȱaccommodateȱ300ȱ
additionalȱpeople.ȱTheȱcostȱofȱtheȱprojectȱisȱ$450,000.ȱYouȱmakeȱaȱpledgeȱofȱ
$20,000ȱforȱtheȱproject.ȱTheȱchurchȱboardȱhasȱnotifiedȱyouȱthatȱyourȱpledgeȱwillȱ
beȱusedȱforȱtheȱpurchaseȱofȱnewȱpews,ȱwhichȱhaveȱalreadyȱbeenȱordered.ȱWouldȱ
theȱcourtsȱenforceȱyourȱpromise?ȱExplainȱyourȱanswer.ȱ
ȱ
ȱ
11.ȱNathanȱwantsȱtoȱenterȱaȱcarȱinȱtheȱdemolitionȱderbyȱatȱtheȱlocalȱfairȱthisȱyear.ȱ
Nathan’sȱuncleȱtellsȱhimȱthatȱheȱwillȱgiveȱhimȱ$500ȱandȱpayȱforȱhisȱexpensesȱinȱ
enteringȱtheȱcarȱifȱheȱwinsȱfirstȱplace.ȱNathanȱwinsȱtheȱcompetition,ȱbutȱhisȱuncleȱ
refusesȱtoȱkeepȱhisȱpromise.ȱWouldȱtheȱpromiseȱtoȱNathanȱbeȱenforceableȱunderȱ
theȱdoctrineȱofȱpromissoryȱestoppel?ȱExplainȱyourȱanswer.ȱ
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom useȱ
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—3ȱPRACTICEȱACTIVITYȱ
Readȱtheȱfollowingȱcasesȱandȱanswerȱtheȱquestionsȱaboutȱthem.ȱAttachȱaȱpageȱifȱadditionalȱ
spaceȱisȱneededȱforȱanswers.ȱ
ȱ
1.ȱLeeȱTaylorȱandȱhisȱwifeȱhadȱaȱtroublesomeȱmarriageȱandȱoftenȱfought.ȱWhenȱ
Leeȱbeganȱhittingȱhisȱwife,ȱsheȱknockedȱhimȱdownȱandȱwasȱaboutȱtoȱstrikeȱhimȱ
payȱanymore.ȱLenaȱsuedȱtoȱenforceȱtheȱpromise.ȱIsȱthereȱaȱsufficientȱlegalȱbasisȱ
forȱherȱtoȱrecover?ȱExplain.ȱ[Harringtonȱv.ȱTaylor,ȱ36ȱS.E.ȱ2dȱ227ȱ(N.C.ȱ1945)]ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
2.ȱAllenȱCampbellȱCompanyȱ[Campbell]ȱsubmittedȱaȱbidȱtoȱtheȱDepartmentȱofȱ
NavyȱtoȱconstructȱNavyȱbarracks.ȱCampbellȱreceivedȱtheȱcontractȱbecauseȱitȱ
submittedȱtheȱlowestȱbid.ȱAsȱpartȱofȱhisȱbidȱprice,ȱCampbellȱincludedȱtheȱcostȱofȱ
thatȱitȱreliedȱonȱtheȱoriginalȱcostȱasȱpartȱofȱitsȱbid.ȱWillȱCampbellȱbeȱableȱtoȱ
recoverȱfromȱVirginiaȱMetal?ȱExplain.ȱ[AllenȱM.ȱCampbellȱCo.ȱv.ȱVirginiaȱMetalȱ
Indus.,ȱInc.,ȱ708ȱF.ȱ2dȱ930ȱ(4thȱCir.ȱ1983)]ȱ
Chapter 8 Consideration 2-47
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—3ȱRETEACHȱ
Directions:ȱFindȱandȱshadeȱinȱtheȱanswerȱtoȱeachȱquestionȱandȱthenȱwriteȱeachȱ
answerȱinȱtheȱanswerȱcolumn.ȱWriteȱtheȱremainingȱunshadedȱlettersȱinȱorderȱfromȱ
leftȱtoȱrightȱonȱtheȱlineȱbelowȱtheȱtableȱtoȱrevealȱaȱstatementȱaboutȱpromises.ȱ
ȱȱ Answersȱ
1.ȱȱȱ Underȱwhatȱdoctrineȱareȱpromisesȱenforced?ȱ1._______________________ȱ
2.ȱȱȱ Whatȱtypeȱofȱlossȱtoȱtheȱpromiseeȱrequiresȱtheȱ
promiseȱtoȱbeȱenforced?ȱ
2._______________________ȱ
3.ȱȱȱ Promisesȱtoȱwhatȱtypeȱofȱorganizationsȱareȱ
enforcedȱifȱtheȱorganizationȱstatedȱaȱspecificȱ
useȱforȱtheȱcontribution?ȱ
3._______________________ȱ
4.ȱȱȱ Whatȱlengthȱofȱtimeȱdoȱmostȱstatesȱuseȱforȱaȱ
statuteȱofȱlimitations?ȱ
4._______________________ȱ
5.ȱȱȱ Whatȱisȱaȱmerchant’sȱpromiseȱtoȱleaveȱanȱofferȱ
openȱcalled?ȱȱ
5._______________________ȱ
6.ȱȱȱ Whatȱprincipleȱspecifiesȱaȱtimeȱlimitȱforȱ
bringingȱaȱlawsuit?ȱ
6._______________________ȱ
7.ȱȱȱ Underȱwhatȱtypeȱofȱlawȱisȱconsiderationȱ
necessaryȱforȱmodifyingȱaȱcontract?ȱ
7._______________________ȱ
8.ȱȱȱȱ UnderȱtheȱUCC,ȱwhatȱlengthȱofȱtimeȱmustȱȱȱ
merchantsȱleaveȱoffersȱopen?ȱ
8._______________________ȱ
9.ȱȱȱȱ Whatȱmustȱcharitableȱorganizationsȱspecificallyȱ
stateȱinȱorderȱforȱcourtsȱtoȱenforceȱtheȱpledge?ȱ
ȱ
9._______________________ȱ
ȱ
CȱOȱAȱUȱSȱEȱFȱOȱRȱTȱHȱEȱMȱ
OȱNȱEȱYȱUȱRȱEȱCȱOȱNȱOȱMȱIȱ
CȱTȱSȱCȱSȱTȱAȱTȱUȱTȱEȱOȱFȱ
EȱAȱRȱSȱTȱIȱEȱPȱRȱOȱMȱIȱSȱ
SȱOȱRȱYȱEȱSȱTȱOȱPȱPȱEȱLȱSȱ
ȱChapter 8 Consideration
2-48
STUDENT _______________________________________ CLASS _______________________ DATE _________
LESSONȱ8—3ȱENRICHMENTȱ
Interviewȱaȱfinancialȱofficerȱatȱaȱnonprofitȱchurch,ȱschool,ȱhospital,ȱorȱotherȱ
organizationȱthatȱheldȱaȱbuildingȱcampaignȱforȱnewȱfacilitiesȱinȱrecentȱyears.ȱCourtsȱ
generallyȱenforceȱpledgesȱtoȱpayȱfutureȱcontributionsȱifȱtheȱcharityȱstatesȱaȱspecificȱ
useȱforȱtheȱmoneyȱandȱactuallyȱactsȱinȱrelianceȱonȱtheȱpledge.ȱThus,ȱindividualsȱ
needȱtoȱthinkȱseriouslyȱaboutȱsuchȱpledgesȱandȱtheirȱabilityȱtoȱfulfillȱthem.ȱAskȱtheȱ
followingȱquestions.ȱ
ȱ
1.ȱWhatȱpercentageȱofȱcontributorsȱholdȱtoȱtheirȱinitialȱpledgeȱbyȱtheȱdateȱpledged?ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
2.ȱWhatȱmethodsȱdoesȱtheȱorganizationȱemployȱtoȱfollowȱupȱonȱuncollectedȱ
pledges—aȱseriesȱofȱletters,ȱpersonalȱphoneȱcalls,ȱaȱcollectionȱagency?ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
3.ȱAreȱuncollectedȱpledgesȱaȱsignificantȱproblem?ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
4.ȱWouldȱtheȱorganizationȱeverȱbringȱaȱlawsuitȱagainstȱanȱindividualȱwhoȱdidȱnotȱ
fulfillȱaȱpledge?ȱ
STUDENT _______________________________________ CLASS _______________________ DATE _________
ȱ
CHAPTERȱ8ȱTESTȱ
SECTION I—IDENTIFY LEGAL TERMS
Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ
whetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱ
Answers
1.ȱTheȱtransferȱofȱownershipȱwithoutȱreceivingȱanythingȱinȱreturnȱisȱ
calledȱaȱgift.ȱ
3.ȱConsiderationȱneverȱconsistsȱofȱaȱchangeȱinȱaȱparty’sȱlegalȱpositionȱ
asȱaȱresultȱofȱtheȱcontract.ȱ
4.ȱGenerally,ȱwhatȱtheȱpartiesȱgiveȱandȱgetȱasȱconsiderationȱneedȱtoȱ
6.ȱAȱdebtorȱcannotȱsettleȱaȱclaimȱbyȱpayingȱlessȱthanȱtheȱfullȱamountȱ
evenȱifȱadditionalȱconsiderationȱisȱgiven.ȱ
7.ȱPastȱperformanceȱbyȱoneȱpartyȱtoȱaȱcontractȱisȱalwaysȱlegallyȱ
sufficientȱconsiderationȱforȱaȱnewȱpromiseȱbyȱtheȱsecondȱparty.ȱ
8.ȱToȱpromiseȱtoȱdoȱsomethingȱthatȱyouȱareȱalreadyȱobligatedȱtoȱdoȱ
byȱlawȱcannotȱserveȱasȱconsideration.ȱ
considerationȱisȱnecessaryȱforȱaȱvalidȱcontract.ȱ
10.ȱTheȱstatuteȱofȱlimitationsȱspecifiesȱaȱtimeȱlimitȱforȱconsideration.ȱ
ȱ1.ȱȱ ȱ
ȱ
ȱ
ȱ3.ȱȱ ȱ
ȱ
ȱ4.ȱȱ ȱ
ȱ6.ȱȱ ȱ
ȱ
ȱ7.ȱȱ ȱ
ȱ
ȱ8.ȱȱ ȱ
ȱ
ȱ9.ȱȱ ȱ
ȱ
ȱ10.ȱȱ ȱ
SECTION II—THINK CRITICALLY ABOUT LEGAL CONCEPTS
Directions:ȱInȱtheȱAnswersȱcolumnȱatȱtheȱrightȱofȱeachȱstatement,ȱwriteȱtheȱletterȱthatȱ
representsȱtheȱword,ȱorȱgroupȱofȱwords,ȱthatȱcorrectlyȱcompletesȱtheȱstatement.ȱ
ȱ
ȱȱ Answersȱ
11.
ȱ
Whichȱofȱtheȱfollowingȱdoesȱnotȱrequireȱmutualȱconsideration?ȱ
(a)ȱanȱact,ȱ(b)ȱaȱgift,ȱ(c)ȱforbearance,ȱ(d)ȱaȱpromiseȱ
11._______ȱ
ȱ
ȱChapter 8 Consideration
2-50
Chapter 8 Consideration 2-51
12.ȱLegalȱvalueȱisȱfoundȱinȱ(a)ȱtheȱexchangeȱofȱtwoȱbenefits,ȱ(b)ȱtheȱ
exchangeȱofȱtwoȱdetriments,ȱ(c)ȱtheȱexchangeȱofȱaȱbenefitȱforȱaȱ
detriment,ȱ(d)ȱallȱofȱtheseȱȱ
12._______ȱ
13.ȱȱ Ifȱaȱcontractȱcontainsȱaȱclauseȱthatȱallowsȱyouȱtoȱescapeȱtheȱlegalȱ
obligation,ȱtheȱpromiseȱisȱsaidȱtoȱbeȱ(a)ȱnominalȱconsideration,ȱ
(b)ȱillusory,ȱ(c)ȱadequateȱconsideration,ȱ(d)ȱnoneȱofȱtheseȱȱ
13._______ȱ
14.ȱWhenȱbuyersȱagreeȱtoȱpurchaseȱallȱofȱaȱparticularȱproducer’sȱ
production,ȱitȱisȱcalledȱ(a)ȱanȱoutputȱcontract,ȱ(b)ȱanȱoptionȱ
contract,ȱ(c)ȱaȱproductionȱcontract,ȱ(d)ȱaȱrequirementsȱcontractȱ
14._______ȱ
15.ȱAȱliquidatedȱdebtȱisȱoneȱwhereȱtheȱpartiesȱagreeȱ(a)ȱthatȱtheȱdebtȱ
15._______ȱ
16.ȱȱ Whichȱofȱtheȱfollowingȱisȱnotȱaȱpartȱofȱconsideration?ȱ(a)ȱfutureȱ
performance,ȱ(b)ȱimmediateȱperformance,ȱ(c)ȱpastȱperformance,ȱ
(d)ȱpresentȱperformanceȱ
16._______ȱ
17.ȱTheȱstatuteȱofȱlimitationsȱspecifiesȱ(a)ȱtheȱmaximumȱamountȱofȱ
moneyȱoneȱcanȱreceiveȱonȱaȱclaim,ȱ(b)ȱtheȱtimeȱlimitȱforȱbringingȱ
aȱlawsuit,ȱ(c)ȱtheȱmaximumȱamountȱofȱpeopleȱwhoȱcanȱfileȱonȱtheȱ
sameȱclaim,ȱ(d)ȱtheȱtimeȱlimitȱforȱconsiderationȱ
17._______ȱ
18.ȱWhenȱconsiderationȱisȱprovidedȱtoȱkeepȱanȱofferȱopen,ȱitȱcreatesȱ
18._______ȱ
19.ȱAnȱimportantȱexceptionȱtoȱtheȱgeneralȱruleȱthatȱmutualȱ
considerationȱisȱnecessaryȱforȱaȱvalidȱcontractȱorȱbindingȱpromiseȱ
isȱ(a)ȱpromissoryȱestoppel,ȱ(b)ȱoptionȱcontract,ȱ(c)ȱfirmȱoffer,ȱ(d)ȱ
noneȱofȱtheseȱ
19._______ȱ
20.ȱȱ Aȱbigȱdifferenceȱinȱeconomicȱvalueȱofȱwhatȱoneȱgivesȱandȱ
receivesȱmayȱbeȱevidenceȱofȱ(a)ȱduress,ȱ(b)ȱmutualȱmistake,ȱ(c)ȱ
fraud,ȱ(d)ȱallȱofȱtheseȱȱ
20._______ȱ
ȱ
SECTION III—APPLY LEGAL PRACTICES
21.ȱJamieȱwasȱfailingȱinȱschool.ȱȱHisȱfatherȱpromisedȱtoȱgiveȱhimȱ$10ȱeveryȱtimeȱheȱ
receivedȱanȱAȱonȱhisȱreportȱcard.ȱJamieȱgotȱexcitedȱandȱbeganȱstudying.ȱOnȱhisȱ
nextȱreportȱcard,ȱheȱhadȱthreeȱAs.ȱWasȱthisȱaȱbindingȱpromise?ȱExplainȱyourȱ
answer.ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
22.ȱLuisaȱcombinedȱherȱandȱCarol’sȱbabysittingȱjobsȱforȱtwoȱweeksȱinȱJanuaryȱsoȱ
Carolȱcouldȱgoȱonȱaȱskiingȱtrip.ȱInȱexchange,ȱCarolȱpromisedȱtoȱcoverȱLuisa’sȱ
babysittingȱjobȱforȱtwoȱweeksȱinȱJuneȱsoȱsheȱcouldȱgoȱtoȱtheȱbeach.ȱAȱdayȱafterȱ
Luisaȱarrivedȱatȱtheȱbeach,ȱsheȱreturnedȱhomeȱdueȱtoȱaȱhurricaneȱcomingȱashore.ȱ
Sheȱresumedȱherȱbabysittingȱjobȱonceȱhome.ȱIsȱLuisaȱstillȱdueȱconsideration?ȱ
Explainȱyourȱanswer.ȱ
2-52 Chapter 8 Considerationȱ
Chapter 8 Consideration 2-53
ANSWERS
Lessonȱ8—1ȱ
Quiz
ȱ
11.ȱTheȱconsiderationȱforȱCraigȱisȱthatȱheȱwillȱsaveȱmoneyȱonȱhisȱcollegeȱexpenses.ȱ
12.ȱTheȱcontractȱisȱvalidȱbecauseȱeconomicȱvalueȱisȱunimportantȱasȱlongȱasȱaȱ
Practice Activity
1.ȱNo,ȱtheȱuncle’sȱexecutorȱisȱincorrect,ȱandȱtheȱnephewȱcanȱcollectȱtheȱmoney.ȱInȱ
orderȱtoȱbeȱadequateȱconsiderationȱtoȱsupportȱaȱpromise,ȱtheȱconsiderationȱmustȱ
includeȱaȱlegalȱdetriment.ȱAȱlegalȱdetrimentȱisȱsomeoneȱpromisingȱtoȱdoȱ(orȱnotȱ
2.ȱTheȱcourtȱfoundȱforȱMrs.ȱAhernȱonȱtheȱgroundsȱthatȱtheȱexcessiveȱchargesȱbyȱtheȱ
Reteach
Enrichment Activity
Lessonȱ8—2ȱ
Quiz
ȱ
13.ȱYes.ȱMarkȱwouldȱreceiveȱtheȱbenefitȱofȱpayingȱ$150ȱlessȱthanȱheȱowed.ȱConsueloȱ
Chapter 8 Consideration 2-55
Practice Activity
1.ȱNo,ȱtheȱcourtȱdidȱnotȱcontinueȱHayes’ȱretirementȱpension.ȱInȱorderȱforȱtheȱnewȱ
ownerȱtoȱbeȱrequiredȱtoȱcontinueȱtoȱpayȱtheȱpension,ȱthereȱmustȱbeȱaȱcontractualȱ
ȱ
2.ȱNo,ȱGibble’sȱcashingȱofȱtheȱcheckȱforȱlessȱthanȱtheȱfullȱamountȱonȱanȱundisputedȱ
debtȱdidȱnotȱactȱasȱanȱaccordȱandȱsatisfactionȱthatȱwouldȱsatisfyȱtheȱdebt.ȱTheȱ
courtȱheldȱthatȱbeforeȱacceptanceȱofȱaȱlesserȱamountȱthanȱisȱowedȱcanȱdischargeȱ
Gibbleȱinȱwhichȱtheȱamountȱowedȱwasȱcontested.ȱInȱfact,ȱWidmerȱadmittedȱheȱ
Reteach
Enrichment Activity
Lessonȱ8—3ȱ
Quiz
ȱ
ȱ
10.ȱTheȱcourtsȱwouldȱenforceȱyourȱpromiseȱbecauseȱitȱwasȱmadeȱtoȱaȱcharitableȱ
11.ȱTheȱpromiseȱwouldȱbeȱenforcedȱbecauseȱNathanȱactedȱinȱrelianceȱonȱtheȱ
Practice Activity
1.ȱNo,ȱthereȱisȱnotȱaȱsufficientȱbasisȱforȱLenaȱtoȱrecoverȱfromȱLee.ȱGoodȱ
considerationȱrequiresȱaȱbargainedȬforȱlegalȱdetrimentȱexchangedȱbetweenȱtheȱ
parties.ȱHere,ȱthereȱwasȱnoȱbargainingȱbetweenȱtheȱpartiesȱpriorȱtoȱLena’sȱactȱofȱ
2.ȱYes,ȱCampbellȱcanȱrecoverȱfromȱVirginiaȱMetal.ȱTheȱinclusionȱinȱtheȱbidȱofȱtheȱ
priceȱprovidedȱbyȱotherȱmerchantsȱpermittedȱpromissoryȱestoppelȱtoȱsupportȱ
Reteach
5.ȱfirmȱofferȱ
2-56 Chapter 8 Considerationȱ
Chapter 8 Consideration 2-57
Courtsȱcanȱenforceȱpromisesȱtoȱcharities.ȱ
ȱ
CȱOȱAȱUȱSȱEȱFȱOȱRȱTȱHȱEȱMȱ
CȱTȱSȱCȱSȱTȱAȱTȱUȱTȱEȱOȱFȱ
LȱIȱMȱIȱTȱAȱTȱIȱOȱNȱSȱAȱNȱ
OȱNȱTȱRȱAȱCȱTȱTȱOȱCȱHȱAȱRȱ
SȱOȱRȱYȱEȱSȱTȱOȱPȱPȱEȱLȱSȱ
Enrichment Activity
ȱ
ANSWERS TO TEST QUESTIONS
SECTION I
SECTION II
ȱ
SECTIONȱIIIȱ