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Question 1
Mark graduated from the New York City School of Law on June 1st, 1999. During the three years that Mark was in school, the school had lent him $30,000 to cover tuition costs under an agreement that Mark would repay the loan within two years of the date of his graduation. June 1st, 2001, the date the loan is due, comes and Mark fails to repay the money he owes. Two more years go by and Mark has still not paid the loan back. However, now the debt is barred by the statute of limitations so the school can no longer sue Mark for the money. Mark writes a letter saying "I know that I have been delinquent in my loan payments but I have lost my job and fallen on some hard times. If I can find another job, I will pay you $10,000 in ten monthly installments of $1,000 each." Mark finds a job two weeks later but fails to pay the school any money. If the school sues mark, they will:
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Correct The traditional rule involving promises based on moral or past consideration is that they are unenforceable donative promises. One exception to this rule involves a promise to pay a debt barred by a statute of limitations, which is considered enforceable even if no new consideration has been given. In such cases, the promise does not revive the old debt. Rather, it is considered a new promise and therefore, only the terms of the new promise are enforceable. That being the case, Mark's promise is enforceable but the school will only be able to collect the $10,000 under the new promise. Therefore, D is the correct answer.
Incorrect! The traditional rule involving promises based on moral or past consideration is that they are unenforceable donative promises. One exception to this rule involves a promise to pay a debt barred by a statute of limitations, which is considered enforceable even if no new consideration has been given. In such cases, the promise does not revive the old debt. Rather, it is considered a new promise and therefore, only the terms of the new promise are enforceable. That being the case, Mark's promise is enforceable but the school will only be able to collect the $10,000 under the new promise. Therefore, D is the correct answer.
Question 2
Simon, a record producer, signs Kelly, a seventeen-year-old lounge singer, to a deal in which he will pay her $5 million and she will record three albums for his label. Her first album does not do very well and she decides that she no longer wants to be a singer. A few weeks later, at Kelly's eighteenth birthday party, Simon convinces Kelly to make another album. Kelly promises to not only make one album but to make both albums remaining on her contract with Simon. Her second album goes triple platinum within a week of being released. Kelly believes that other record companies will offer her much more money than what Simon is giving her so she tells Simon that she is terminating the contract. If Simon sues Kelly for breach of contract, he will probably:
Correct The traditional rule involving promises based on moral or past consideration is that they are unenforceable donative promises. One exception to this rule involves a promise to perform a voidable obligation. This promise is enforceable despite the absence of new consideration so long as the new promise is not subject to the same defense that made the original obligation voidable. Here, the original promise was voidable because Kelly was a minor when she and Simon made their contract. However, Kelly promised to honor the rest of the contract after her eighteenth birthday. Therefore, this promise to perform on an otherwise voidable contract is enforceable because Kelly is now an adult and her promise is not subject to the same defense that made the original promise voidable. That being the case, A is the correct answer.
Incorrect! The traditional rule involving promises based on moral or past consideration is that they are unenforceable donative promises. One exception to this rule involves a promise to perform a voidable obligation. This promise is enforceable despite the absence of new consideration so long as the new promise is not subject to the same defense that made the original obligation voidable. Here, the original promise was voidable because Kelly was a minor when she and Simon made their contract. However, Kelly promised to honor the rest of the contract after her eighteenth birthday. Therefore, this promise to perform on an otherwise voidable contract is enforceable because Kelly is now an adult and her promise is not subject to the same defense that made the original promise voidable. That being the case, A is the correct answer.
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Question 3
Cornelius goes over to Tony's house to visit with him one day. When Cornelius enters the house, he sees Tony on the floor gasping for breath. Realizing that Tony is having a heart attack, Cornelius rushes Tony to the hospital. Tony survives the heart attack and, once he returns home, Cornelius comes over every day to care for Tony. After a few months, Tony is completely recovered. Tony tells Cornelius that, in appreciation for all of the help that Cornelius gave Tony, Tony is going to give Cornelius his vintage 1957 Cadillac. Two days after making this promise, Tony suffers a second heart attack and dies. Tony's estate refuses to give Cornelius the car. If Cornelius sues to enforce the promise, he will probably:
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Correct The emerging modern rule is that a promise based on moral or past consideration is enforceable so long as the promise is based on a material benefit that was previously conferred by the promisee on the promisor and provided that the benefit gave rise to a moral obligation to make compensation. Here, Tony received a material benefit from Cornelius which gave rise to the promise he made. Therefore, the promise is enforceable, the estate will have to give Cornelius the car and D is the correct answer.
Incorrect! The emerging modern rule is that a promise based on moral or past consideration is enforceable so long as the promise is based on a material benefit that was previously conferred by the promisee on the promisor and provided that the benefit gave rise to a moral obligation to make compensation. Here, Tony received a material benefit from Cornelius which gave rise to the promise he made. Therefore, the promise is enforceable, the estate will have to give Cornelius the car and D is the correct answer.
Question 4
Cornelius goes over to Tony's house to visit with him one day. When Cornelius enters the house, he sees Tony on the floor gasping for breath. Realizing that Tony is having a heart attack, Cornelius rushes Tony to the hospital. Tony survives the heart attack and, once he returns home, Cornelius comes over every day to care for Tony. After a few months, Tony is completely recovered. Tony's father tells Cornelius that, in appreciation for all of the help that Cornelius gave his son, he is going to give Cornelius his vintage 1957 Cadillac. Two days after making this promise, Tony's father dies. Tony's father's estate refuses to give Cornelius the car. If Cornelius sues to enforce the promise, he will probably:
Correct The emerging modern rule is that a promise based on moral or past consideration is enforceable so long as the promise is based on a material benefit that was previously conferred by the promisee on the promisor and provided that the benefit gave rise to a moral obligation to make compensation. However, even under the modern view, a promise based on a moral obligation will not be enforceable where the promisor himself did not receive a material benefit. Here, the promisor, Tony's father, did not receive a material benefit from Cornelius. Therefore, his promise was simply an unenforceable donative promise. That being the case, Cornelius will not be able to recover for the promise and A is the correct answer.
Incorrect! The emerging modern rule is that a promise based on moral or past consideration is enforceable so long as the promise is based on a material benefit that was previously conferred by the promisee on the promisor and provided that the benefit gave rise to a moral obligation to make compensation. However, even under the modern view, a promise based on a moral obligation will not be enforceable where the promisor himself did not receive a material benefit. Here, the promisor, Tony's father, did not receive a material benefit from Cornelius. Therefore, his promise was simply an unenforceable donative promise. That being the case, Cornelius will not be able to recover for the promise and A is the correct answer.