Question

Identify the true statements about past consideration. (Check all that apply.)

1) It is enforceable if a party unexpectedly benefits from the past consideration provided by the other party.
2) It is enforceable to the extent necessary to avoid injustice.
3) It is enforceable if it was given with the expectation of future payment.
4) It is enforceable if the circumstances of the party that provided the past consideration change.

Answer 1

Past consideration is not enforceable simply because a party benefits unexpectedly. It is enforceable to prevent injustice, particularly when consideration was provided with the expectation of payment. Changes in circumstances of the providing party do not establish enforceability.

Step-by-step explanation:

Identifying the true statements about past consideration is essential to understanding the enforceability of contracts. The question posits four possible statements, each addressing different circumstances under which past consideration might be enforceable.

Firstly, past consideration is not generally enforceable merely because a party unexpectedly benefits from it. Contracts require a bargain for exchange, and benefits received in the past do not constitute a present consideration. Secondly, past consideration can be enforceable to the extent necessary to avoid injustice, particularly if it was reasonably expected to be compensated. This exception is especially relevant in the context of quantum meruit or where there is a pre-existing moral obligation that has been formalized in a subsequent agreement. Thirdly, if the past consideration was given with the expectation of future payment, and especially if this expectation was induced by the party benefitting from the consideration, it might also be enforceable.