Question

Assume that all other requirements for a valid contract are present and indicate which of the following would not be a binding agreement because of a problem with consideration.

A) Laura promises to pay a carpenter, who is renovating the living room of her home, an additional $100 if he will install an extra cabinet to store her files.
B) Smith sold a valuable watch to Sarah for only $1.
C) John tells his neighbour, Eric, that he will give him $30 to show his gratitude for Eric's extraordinary work for Little League.
D) Mr. N promises to give $50 to the cystic fibrosis society and makes that promise under seal.
E) Jones agrees to accept $80 as full payment of a $100 debt if Kahn, the debtor, agrees to pay the $80 a week before the due date.

Answer 1

The scenario without a binding agreement due to problems with consideration is C) John's promise to pay Eric for past work. 'Consideration' must involve an exchange of value for something new, not for benefits previously received.

Step-by-step explanation:

When considering which of the given scenarios would not result in a binding agreement because of an issue with consideration, it is C) John tells his neighbour, Eric, that he will give him $30 to show his gratitude for Eric's extraordinary work for Little League. This scenario lacks the necessary elements of consideration because it is an attempt to pay after the fact for a benefit already received, also known as a past consideration, which is not enforceable. The other scenarios listed involve valid consideration: A) represents a modification of an existing contract with new consideration; B) involves a nominal consideration, but still a legally sufficient one; D) is a promise under seal, which traditionally does not require explicit consideration, and E) represents accord and satisfaction, where a lesser amount is accepted in exchange for an early payment, altering the terms and creating new consideration.