Question

enforceabie tonwu contract? -Answers to the even-numbered questions in this For Review section co Business Scenarios and Case Proble 10-1 Preexisting Duty. Ben hired Lewis to drive his racing car in a race. Tuan, a friend of Lewis, promised to pay Lewis $3,000 if he won the race. Lewis won the race, but Tuan refused to pay the $3,000. Tuan contended that no legally binding contract had been formed because he had received no consideration from Lewis forhis promise to pay Lewis or breach of contract, arguing that winning the race was the consideration given in exchange for Tuan's romise to pay. What rule of law discussed in this chapter sue supports Tuan's claim? Explain. (See Consideration.) 10-2 Past Consideration. Daniel, a recent college graduate, is on his way home for the Christmas holidays from his new job. He gets caught in a snowstorm and is taken in by an elderly couple who provide him with food and shelter. After the snowplows have cleared the road, Daniel pro- ceeds home. Daniel's father, Fred, is most appreciative of the elderly couple's action and in a letter promises to pay them $500. The couple, in need of funds, accept Freds offer. Then, because of a dispute with Daniel, Fred refuses to pay the couple the $500. Discuss whether the couple can hold Fred liable in contract for the services rendered to Daniel. (See Consideration.)

Answer 1

10-1. The rule of law which supports Tuan's claim is that a promise to perform a pre-existing  duty of the contract can not be considered as the consideration to support a contract. This is know as pre-existing duty rule. Lewis performed a pre-existing duty by winning the race. Therefore Tuan's offer is not a consideration and he can not be sued by Lewis.

10-2. The couple can not hold Fred liable in contract for the services rendered to Daniel because he promised to pay for the services which got delivered in past and as per rules past consideration is not a consideration. He is only liable to pay for the services to be provided in future.

10-4. An Arbitration Agreement is a type of agreement between parties in written to resolve differences out of the court. This agreement was unconscionable because Potamkin’s staff did not explain the explain an arbitration agreement which accompanied a English-language contract so the shortage of information and not making them fully aware about terms and conditions of the contract which prevented them from taking right decisions made it unconscionable.