Business Law

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Chapter 8 Chapter questions 1,2,3,5,6,7,10

1. When does a promise constitute consideration?

For a promise to constitute consideration, the promise must impose an obligation on the person making it.

2. May a promise that is conditional constitute consideration?

Yes, such a promise consideration even if the condition is unlikely to occur.

3. What is the general rule about the adequacy of consideration?

The adequacy of the consideration is irrelevant because the law does not prohibit bargains.

5. Is there consideration when a secured note for a lesser amount is given and accepted in discharge of an unsecured note for a greater amount? Explain.

No, because if a secured not for a lesser amount is given and accepted in discharge of an unsecured note for a greater amount, the difference between the two notes is discharged. The security is the consideration to support the contract to settle for a lesser sum.

6. George agrees to remodel a kitchen for Harry for $30,000 but after beginning work asked Harry to pay $34,000. Can George enforce Harry’s new promise to pay $4000?

No, for the new contract to be enforceable there must be some added features that benefit both parties, although not necessarily to an equal extent.

7. If a boy promises his father that he will not own and operate an automobile until he is 18 in exchange for his father’s promise to pay him $2,000, is there a valid contract?

Yes, when one refrains or promises to refrain from doing something this conduct is called forbearance. If a promisor had a right to do the act, forbearance is a valid consideration.

10. When will courts apply the doctrine of promissory estoppel?

The courts will apply promissory estoppel when the promise would be substantially harmed if it were not enforced.

CASE STUDY QUESTIONS 3,4,6,8
3. Yes, because both parties benefited from the settlement agreement.

4. Yes, because even though such promises lack the technical requirements of ordany contracts, the courts in most states will enforce the promise as a matter of public records.

6. I believe he had, because in the contract it stated Prudential contracted with Apfel to pay him to use the system even if the technique became public knowledge.

8. Yes, Promissory estoppel is substitute for consideration when another acts in reliance on a promisor’s promise, and Mary performed her duties on a promisor promise that she would get retroactive pay.

CHAPTER 9 QUESTIONS 1,3,5,7,8,9

1. What is the difference between a mutual mistake and a unilateral mistake?

A unilateral mistake is when one party makes a mistake regarding the contract; mutual mistake is when both parties to a contract make the same mistake.

3. When will courts allow an unilateral mistake of fact to impair the enforceability of a contract?

If the non-mistaken party has caused the mistake or knew or should have known of the other party’s mistake, and the mistaken party exercised ordinary care.

5. What type of mutual mistakes do not make a contract defective?

1. Value, quality, or price
2. The terms of the contract
3. The law
4. Expectations

7. When can a statement of opinion constitute fraud?

If the speaker is an expert or has special knowledge not available to the other party and should realize that the other party relies on this expert opinion, then a misstatement of the opinion or value, intentionally made, would amount to fraud.

8. What is duress?

Duress is a means of destroying another’s free will by one party obtaining consent to a contract as a result of a wrongful threat to do the other person or family members some harm.

9. Why should the victims of acts that make contracts voidable, such as duress or undue influence, take steps to protect their tights?

If you don’t take steps to protect your rights your right to avoid the contracts provisions may be lost. Furthermore you may ratify the contract by some act or word...
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