Question

Smithers is retiring after working for Springfield International for 20 years. Upon hearing the news of his retirement, the president of the company announces at the annual company picnic that Smithers will receive a bonus of $250,000 for his exceptional services over the years when he retires. But upon retiring, Smithers isn't paid the bonus. He decides to sue the company to recover the promised bonus.

Which of the following is true of this case?
a.Smithers will lose because of past consideration
b.Smithers will lose because of unjust enrichment
c.Smithers will win because of misrepresentation
e. Smithers will win because bonuses are legal

Answer 1

The answer is: A) Smithers will lose because of past consideration

Step-by-step explanation:

Past consideration in contract law refers to acts that were done before the contract was made. Since those acts were already performed, they are not affected by the other party´s actions or promise of actions.

Smithers had already worked for the company for 20 years (and received a salary for doing so), so his prior work cannot be part of a new contract with the company.