©BRIGHTSTARS EXAM SOLUTIONS
11/14/2024 12:19 PM
BMGT380 Chapter 12: Consideration Exam
Questions With Verified Answers
Consideration - answer✔is the legal value, bargained for and given in exchange for an act or a
promise.
Promisee has to give something of legal value in exchange for the promise to be enforce against
the promiser.
The requirement of consideration means that a promisee must pay the price that the promisor
asked to gain the right to enforce the promisor's promise.
What if a promisor did not ask for anything in exchange for making her promise or if the
promisor asked for something that does not have legal value? Is the promise enforceable? (or
promise was purely gratuitous) - answer✔No, it is not enforceable against her because it is not
supported by consideration.
What does the consideration requirement do for the promiser? - answer✔1. tended to limit the
scope of a promisor's liability for his promises by insulating him from liability for gratuitous
promises and by protecting him against liability for reliance on such promises.
2. The mechanical application of the requirement often produced unfair results.
An act or a promise can have legal value in one of two ways: - answer✔1. If in exchange for the
promisor's promise, the promisee does, or agrees to do, something he had no prior legal duty
to do, something he had no prior legal duty to do, that provides legal value.
2. If in exchange for the promisor's promise, the promisee refrains from doing, or agrees not to
do, something she has a legal right to do, that also provide legal value.
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, ©BRIGHTSTARS EXAM SOLUTIONS
11/14/2024 12:19 PM
Hamer v. Sidway - answer✔What constitutes**An uncle's promise to pay his nephew $5,000 if
he refrained from using tobacco, drinking, swearing, and playing cards or billiards for money
until his 21st birthday was held to be supported by consideration.
Nephew did refrain even though he may have benefited from so refraining. he had legal right to
indulge in activities yet he refrained at his uncle's requests and in exchange for his uncle's
promise. This was all that was required for consideration.
Adequacy of Consideration - answer✔As long as the promisee's act or promise satisfies the
legal value test the courts do not ask whether that act or promise was worth what the promisor
gave, or promised to give, in return for it.
Gross inadequacy of consideration is not by itself ordinarily a sufficient reason to set aside a
contract.
Bargained-For Exchange - answer✔Fact that a promisee's act or promise provides legal value is
not, in itself a sufficient basis for finding that it amounted to consideration.
In addition, the promisee's act or promise must have been bargained for and given in exchange
for the promisor's promise.
Gottlieb v. Tropicana Hotel and Casino - answer✔Illustrates the concept of bargained-for legal
value.
According to Tropicana, the participation in a promotion such as the million dollar wheel cannot
constitute consideration that would support the formation of an enforceable contract.
Ms. Gottelieb provided adequate consideration to form a contract because:
She had to go to the casino, wait in line, present her diamond club card, permitted the casino to
conduct information, by participating in the game she was a part of the entertainment. All of
these determents to Ms. Gottlieb were the requested detriments to the promisee induced by
the promise of Tropicana to offer her a chance to win money.
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11/14/2024 12:19 PM
BMGT380 Chapter 12: Consideration Exam
Questions With Verified Answers
Consideration - answer✔is the legal value, bargained for and given in exchange for an act or a
promise.
Promisee has to give something of legal value in exchange for the promise to be enforce against
the promiser.
The requirement of consideration means that a promisee must pay the price that the promisor
asked to gain the right to enforce the promisor's promise.
What if a promisor did not ask for anything in exchange for making her promise or if the
promisor asked for something that does not have legal value? Is the promise enforceable? (or
promise was purely gratuitous) - answer✔No, it is not enforceable against her because it is not
supported by consideration.
What does the consideration requirement do for the promiser? - answer✔1. tended to limit the
scope of a promisor's liability for his promises by insulating him from liability for gratuitous
promises and by protecting him against liability for reliance on such promises.
2. The mechanical application of the requirement often produced unfair results.
An act or a promise can have legal value in one of two ways: - answer✔1. If in exchange for the
promisor's promise, the promisee does, or agrees to do, something he had no prior legal duty
to do, something he had no prior legal duty to do, that provides legal value.
2. If in exchange for the promisor's promise, the promisee refrains from doing, or agrees not to
do, something she has a legal right to do, that also provide legal value.
1|Page
, ©BRIGHTSTARS EXAM SOLUTIONS
11/14/2024 12:19 PM
Hamer v. Sidway - answer✔What constitutes**An uncle's promise to pay his nephew $5,000 if
he refrained from using tobacco, drinking, swearing, and playing cards or billiards for money
until his 21st birthday was held to be supported by consideration.
Nephew did refrain even though he may have benefited from so refraining. he had legal right to
indulge in activities yet he refrained at his uncle's requests and in exchange for his uncle's
promise. This was all that was required for consideration.
Adequacy of Consideration - answer✔As long as the promisee's act or promise satisfies the
legal value test the courts do not ask whether that act or promise was worth what the promisor
gave, or promised to give, in return for it.
Gross inadequacy of consideration is not by itself ordinarily a sufficient reason to set aside a
contract.
Bargained-For Exchange - answer✔Fact that a promisee's act or promise provides legal value is
not, in itself a sufficient basis for finding that it amounted to consideration.
In addition, the promisee's act or promise must have been bargained for and given in exchange
for the promisor's promise.
Gottlieb v. Tropicana Hotel and Casino - answer✔Illustrates the concept of bargained-for legal
value.
According to Tropicana, the participation in a promotion such as the million dollar wheel cannot
constitute consideration that would support the formation of an enforceable contract.
Ms. Gottelieb provided adequate consideration to form a contract because:
She had to go to the casino, wait in line, present her diamond club card, permitted the casino to
conduct information, by participating in the game she was a part of the entertainment. All of
these determents to Ms. Gottlieb were the requested detriments to the promisee induced by
the promise of Tropicana to offer her a chance to win money.
2|Page
