Question

Frank is a loyal employee who has spent much time above and beyond the call of duty promoting his employer's company on weekends. Frank's boss says to him, "Because of all this extra work you have done, you'll get a $1,000 bonus next month." Because of this statement:

a. The company is not obligated to pay him because the consideration is past consideration.
b. The company is not obligated to pay because there was a preexisting duty.
c. The company is obligated to pay because Frank has performed the extra work.
d. The company is obligated to pay because there is an implied-in-law contract.

Answer 1

The company is obligated to pay because Frank has performed the extra work.

Step-by-step explanation:

The correct answer is c. The company is obligated to pay because Frank has performed the extra work.

In this scenario, Frank has gone above and beyond his regular duties by promoting his employer's company on weekends. His boss acknowledges Frank's extra work and promises him a $1,000 bonus next month. This promise creates a legal obligation for the company to pay Frank the bonus.

The consideration (Frank's extra work) is not past consideration because it was done in reliance on the promise of the bonus. It is also not a preexisting duty because Frank was not already obligated to perform the extra work. Therefore, the company is obligated to pay Frank the bonus.