Question

Business Law List the four types of consideration. 2. Can $1.00 be adequate consieration? Why or why not? 3. List the three exceptions to the preexisting-duty rule.

Answer 1

1. Four types of consideration

• Executory/Future consideration: Consideration to move at a future date. For example, A promising to deliver goods to B after one week and B promising to make the payment after the delivery.
• Executed/Present consideration: Consideration that moves simultaneously with the promise. Ex: A delivering a product to B today upon B's promise to make the payment at a future date.
• Past consideration: If consideration of one party is given before the date of promise. When something is done before the date of agreement, it is considered as past consideration.
• A promise to refrain from doing something. Ex: A promise to stay away from drugs while being in the team.

2. Whether $1.00 is consideration or not depends on whether the $1.00 had actually been bargained for and does not depend on the benefit received. If a friend promised you his/her car for $1.00 because he/she needed to get rid of it, then the $1.00 can be considered as adequate. However, if your friend wrote down "I give you my car in consideration of one dollar," on your birthday, this same consideration would not seem adequate.

3. The three exceptions to the preexisting-duty rule

• Unforeseen difficulties
• Rescission
• New contact