B-50
ALTERNATE CASE PROBLEM ANSWERS
CHAPTER 12
CONSIDERATION
12-1A. Contract modification
(Chapter 12—Page 245)
Yes. Stating that the adequacy of consideration must be determined at the time a contract is agreed on,
and not from the hindsight of how parties fare under it, the court explained that insurance has value to
12-2A. Preexisting duty
(Chapter 12—Page 245)
12-3A. Detrimental reliance
(Chapter 12—Pages 250–252)
APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 12 B-51
12-4A. Accord and satisfaction
(Chapter 12—Page 249)
12-5A. Consideration
(Chapter 12—Page 245)
Martino cannot recover in a suit against Gray because the contract that Martino alleges was not
12-6A. Adequacy of consideration
(Chapter 12—Page 245)
The beneficiary’s claim that the terms of “$10 and other valuable consideration” were insufficient to
support a contract was deemed by the court to have no merit. The court held that the consideration
12-7A. Past consideration
B-52 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 12
two elements to consideration: (1) something of legal value given in exchange for a promise and (2) a
12-8A. Preexisting duty
(Chapter 12—Pages 245246)
The court concluded that the modification of the contract between Rock Services and Empire was valid,
and awarded Rock Services the amount owing under the modification. Empire appealed. The state
12-9A. A QUESTION OF ETHICS
1. As a general rule, the law presumes that persons signing contracts or any other documents
know what they are signing. In the case of Widener and Mozumder, both men were obviously well
2. Some exceptions are made to the rule that people are presumed to know the contents of the
documents they sign—particularly when the signer does not comprehend the language in which the
3. In answering this question, the first factor you will want to consider concerns the implications
of assenting to a contract. By signing a contract, a party indicates assent to that contract and its terms.
If the courts were to allow people to avoid contractual obligations by claiming that they did not consent
4. Increasingly in the last decade or so, firms have offered early retirement options to employees
as a compromise solution to an ethical dilemma. On the hand, to increase efficiency and profit margins,
firms often need to consolidate operations or weed out unnecessary personnel. On the other hand,
firms have both a duty to deal fairly with employees who have proved their loyalty and competence and