Chapter13

Consideration is the __, price, or promise that causes a person to enter into a contract.

Inducement

The two basic elements of consideration are and .

Value / Bargained-for exchange

Consideration requires that each party receive a legal and incur a legal .

Benefit / Detriment

__ means refraining from doing something that one has a legal right to do.

Forbearance

A promise to act or __ counts as valid consideration.

Forbear

The parties must __ for the consideration exchanged.

Bargain

Courts do not evaluate the __ of consideration.

Adequacy

An __ promise is not valid consideration.

Illusory

Under the UCC, a __ contract requires a buyer to purchase all goods from one seller.

Requirements

Under the UCC, an __ contract requires the seller to sell all of its production to one buyer.

Output

Both parties in a UCC contract must act in __.

Good faith

If a person is already obligated to perform a duty, it is not valid consideration. This is called the __ rule.

Preexisting duty

When a party agrees to do something above and beyond their obligation, it is called __.

Additional work

Under the UCC, contract modifications need no new consideration if made in __.

Good faith

When unforeseen circumstances arise and a promise is made regarding an unfinished project, that promise is valid consideration due to __.

Unforeseen circumstances

A completed act cannot serve as consideration. This is known as __.

Past consideration

A debt with no dispute about the amount owed is called a __ debt.

Liquidated

If the debtor offers a different performance and the creditor accepts, the agreement is __.

Binding

A debt that is disputed about its existence or amount is called an __ debt.

Unliquidated

The settlement of an unliquidated debt for less than demanded is called __.

Accord and satisfaction

Writing “full settlement” on a check may result in an __ when the creditor cashes it.

Accord and satisfaction

An agreement where an employee promises not to work for a competitor after leaving a company is a __ agreement.

Non-compete

A court may enforce a promise without consideration if breaking it would cause injustice. This is called __.

Promissory estoppel

A promise based on moral duty rather than legal obligation is called __ consideration.

Moral

A student promises to quit smoking and drinking until age 21 if his uncle pays him $5,000. The student complies, but the uncle refuses to pay. Is there valid consideration?

Yes — the student gave up legal rights (forbearance), which counts as consideration.

A construction company demands more money to finish a job it already agreed to complete. The owner agrees but later refuses to pay extra. Can the company enforce the promise?

No — preexisting duty rule applies

A seller agrees to provide all the steel produced to one manufacturer. What kind of contract is this?

Output contract

A buyer agrees to purchase all oil needed for a year from one supplier. What kind of contract is this?

Requirements contract

A creditor agrees to accept $8,000 as full payment of a $10,000 debt that is undisputed. Is the agreement binding?

No — it’s a liquidated debt

A creditor and debtor dispute how much money is owed. The debtor sends a $5,000 check marked “full settlement,” which the creditor cashes. What happens?

Accord and satisfaction — the cashing of the check settles the debt.

A company modifies a sales contract without new consideration, but both parties agree in good faith. Is the modification valid under UCC?

Yes — good faith modification under UCC §2-209 requires no new consideration.

A donor promises to give a charity $10,000, and the charity relies on that promise to start a program. The donor later refuses to pay. Can the charity enforce it?

Yes — under promissory estoppel, the court can enforce the promise to avoid injustice.

An employee is asked to sign a non-compete clause after already being hired, without any new benefits. Is there consideration?

No — no new consideration was provided in exchange for signing.

A past service performed before a promise to pay was made cannot be enforced because it lacks __.

Considerati