ALTERNATE CASE PROBLEM ANSWERS
CHAPTER 13
CONSIDERATION
13-1A. Contract modification
13-2A. Preexisting duty
The court held that DePretis was entitled to the $20,000 reward. The court found that although
13-3A. Detrimental reliance
Yes. Even though no contract was ever signed, Red Owl was liable to the Hoffmans for the
damages they suffered. Red Owl made a number of promises and assurances, which the
B-2 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 13
13-4A. Accord and satisfaction
Kelly wins. After receiving the checks, Kelly immediately told Kowalsky that he would not accept
13-5A. Adequacy of consideration
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
13-6A. Past consideration
The question suggests that under different circumstances than existed in this case, Cornwell’s
initial hiring could have constituted consideration for his signing of the confidentiality agreement.
There are two elements to consideration: (1) something of legal value given in exchange for a
promise and (2) a bargained-for exchange. Hiring is something of legal value. Thus, the issue
13-7A. Preexisting duty
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 intermediate appellate court affirmed the judgment of the trial court. The
APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 13 B-3
13–8A. Past consideration
The non-compete agreement fails for lack of consideration. Promises made in return for actions
that have already taken place are unenforceable. They lack consideration because the element
13-9A. 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 educated and capable of understanding what they were signing. According to the
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
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
B-4 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 13
has to do with fraud and misrepresentation. In the case of Widener and Mozumder, no fraud or
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 a need to protect themselves from potential liability for