Question

When Dina graduates from high school, she wants to go to Antelope University. However, her boss Chris tells Dina that he will pay her $40,000 if she gets at least her bachelor's degree from his alma mater, Eagle College. Dina enrolls in Eagle, attends full-time for four years, and graduates with her BS. When Dina asks Chris for the $40,000, Chris says, “I don’t remember promising you $40,000. But if there was a promise, it’s not enforceable, because we didn’t bargain for it. And even if there was a promise that would otherwise be enforceable, I revoke it now.” Can Dina enforce Chris’s “promise”? Why or why not? In your answer, you should walk through all the elements of a contract and apply them to this factual situation.

Answer 1

Dina can enforce Chris’s promise. The elements of a valid contract include agreement, consideration, contractual capacity and legality. There is an agreement between Dina and Chris because Chris has made the offer to pay her $40,000 if she gets at least her bachelor's degree from Eagle College and Dina has accepted the same by enrolling in Eagle. It satisfies the elements of legality and contractual capacity as it is for a legal purpose and both have attained majority. The main element to be satisfied to make a promise enforceable is consideration which has two elements; legally sufficient value and bargained for exchange. There is legally sufficient value because it includes a promise to do something that one has no prior legal duty to do. Another element is bargained for exchange which requires the item of value to be promised by the promise in return for the promisee’s promise or performance. Bargained for exchange is satisfied here because $40,000 was offered in return for Dina’s performance by acquiring the bachelor's degree from Eagle College instead of Antelope University. Hence a valid contract exist here. Moreover Dina has completed her performance in reliance of Chris’s promise. She has spent her four years in the Eagle college and the enforcement of promise is necessary to avoid injustice. Hence promissory estoppel would be applied which makes the promise enforceable even without valid consideration. Hence Chris cannot revoke the promise and the promise is enforceable.