BMGT380 Chapter 12: Consideration Exam Questions With Verified Answers
0 view 0 purchase
Course
BMGT 380
Institution
BMGT 380
BMGT380 Chapter 12: Consideration Exam
Questions With Verified Answers
Consideration - answeris the legal value, bargained for and given in exchange for an act or a
promise.
Promisee has to give something of legal value in exchange for the promise to be enforce against
the promiser.
The requi...
BMGT380 Chapter 12: Consideration Exam
Questions With Verified Answers
Consideration - answer✔is the legal value, bargained for and given in exchange for an act or a
promise.
Promisee has to give something of legal value in exchange for the promise to be enforce against
the promiser.
The requirement of consideration means that a promisee must pay the price that the promisor
asked to gain the right to enforce the promisor's promise.
What if a promisor did not ask for anything in exchange for making her promise or if the
promisor asked for something that does not have legal value? Is the promise enforceable? (or
promise was purely gratuitous) - answer✔No, it is not enforceable against her because it is not
supported by consideration.
What does the consideration requirement do for the promiser? - answer✔1. tended to limit the
scope of a promisor's liability for his promises by insulating him from liability for gratuitous
promises and by protecting him against liability for reliance on such promises.
2. The mechanical application of the requirement often produced unfair results.
An act or a promise can have legal value in one of two ways: - answer✔1. If in exchange for the
promisor's promise, the promisee does, or agrees to do, something he had no prior legal duty
to do, something he had no prior legal duty to do, that provides legal value.
2. If in exchange for the promisor's promise, the promisee refrains from doing, or agrees not to
do, something she has a legal right to do, that also provide legal value.
Hamer v. Sidway - answer✔What constitutes**An uncle's promise to pay his nephew $5,000 if
he refrained from using tobacco, drinking, swearing, and playing cards or billiards for money
until his 21st birthday was held to be supported by consideration.
Nephew did refrain even though he may have benefited from so refraining. he had legal right to
indulge in activities yet he refrained at his uncle's requests and in exchange for his uncle's
promise. This was all that was required for consideration.
Adequacy of Consideration - answer✔As long as the promisee's act or promise satisfies the
legal value test the courts do not ask whether that act or promise was worth what the promisor
gave, or promised to give, in return for it.
Gross inadequacy of consideration is not by itself ordinarily a sufficient reason to set aside a
contract.
Bargained-For Exchange - answer✔Fact that a promisee's act or promise provides legal value is
not, in itself a sufficient basis for finding that it amounted to consideration.
In addition, the promisee's act or promise must have been bargained for and given in exchange
for the promisor's promise.
Gottlieb v. Tropicana Hotel and Casino - answer✔Illustrates the concept of bargained-for legal
value.
According to Tropicana, the participation in a promotion such as the million dollar wheel cannot
constitute consideration that would support the formation of an enforceable contract.
Ms. Gottelieb provided adequate consideration to form a contract because:
She had to go to the casino, wait in line, present her diamond club card, permitted the casino to
conduct information, by participating in the game she was a part of the entertainment. All of
these determents to Ms. Gottlieb were the requested detriments to the promisee induced by
the promise of Tropicana to offer her a chance to win money.
2|Page
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Brightstars. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
