Question

George helped Warren study all night for his business law test. After Warren got an A on the exam, he told George 'I will give you 10 for helping me get a good grade.' George said, 'thanks, i'll take it.' Is there a contract in this scenario?

1) There is a contract because there is mutual assent
2) There is no contract because there is no valid consideration
3) There is no contract because 10 is reasonable inadequate consideration
4) There is a contract with sufficient consideration

Answer 1

The scenario lacks a valid contract because George helped Warren before Warren promised a reward, making the consideration past consideration and therefore not valid for forming a contract.

Step-by-step explanation:

In the scenario described, there is no contract because there is no valid consideration. Consideration is a fundamental aspect of a legally binding contract and involves the exchange of something of value between the parties. In this situation, Warren's promise to give George '10' after George has already helped Warren study cannot be considered valid consideration because George's act of helping occurred in the past. For consideration to be valid, it must be something bargained for in exchange for the promise being made; past acts do not fulfill this requirement. Therefore, the correct answer is that there is no contract because there is no valid consideration.