BUSINESS LAW

Consideration

1.    Stefano, a 20-year-old college student pursuing a degree in Business and Culinary Arts, has a part-time job working in a small, but successful Italian restaurant where the Chef is teaching him all the tricks of the trade. Stefano is a quick learner with a strong work ethic, and in appreciation for all that his mentor has done for him, Stefano promises, "When I make it big, I promise to pay for that trip to Italy you always wanted to take!"  Define illusory promise and explain whether Stefano has made an illusory promise.  If yes, what can Chef do to make it a binding contract? If not, what must happen for the Chef to know that Stefano has achieved enough success that it is time for the trip to Italy?

2.    Gwen runs a small second hand clothing and furniture shop that takes consignments. Janice contracts with Gwen to sell all the furniture from her deceased parent's home. The consignment contract offers to display furniture for 6 months, with a sliding scale percentage payment system that provides Janice with 50% of the sale price if it sells in the first month, 40% in the second month, and progressively less if it takes more time to sell. Thirty days later, Gwen's business is so slow she can't pay her rent, so she decides to downsize to smaller space and limit her stock to clothing. Gwen notifies Janice along with all customers with furniture consignments that they must remove all furniture from stock or pay a storage fee of $100 per month.  Define the pre-existing duty rule and the exceptions to the pre-existing duty rule.  Explain whether the pre-existing duty rule applies and then explain whether any of the exceptions to the rule apply. Based on your analysis, conclude by stating whether Gwen can change Janice the $100 a month extra storage fee.

3.    Vanessa volunteered at the dog shelter all through high school and quit when she was leaving for college.  When she quit, the manager, Joe, said to her "you were such a good worker for the past three years, I am going to give you $1000 in appreciation for your work to help with your college expenses."  Joe never pays Vanessa the $1000.  Since Vanessa really needs the money for college, what advice would you give her about trying to collect the $1000? What contract principles must be considered to determine if it is worth her effort? What if Vanessa relied on Joe's promise?

4.    Brendon asks Dylan to fill in for him in his landscaping job, mowing lawns for three condominium complexes for a week while Brendon takes a vacation. Brendon agrees to pay Dylan $300 if he does so.  Dylan gets the jobs done, but when Brendon returns he does not pay Dylan, claiming he did not give adequate consideration for the contract because several homeowners complained that the work was not done as well as Brendon did it.  Explain the principle of adequacy of consideration and whether Brendon is legally obligated to pay Dylan.

5.    Dusty ran a small neighborhood bar that often hired ex-offenders to help them transition back into the job market after their release from prison. To help keep his employees productive, Dusty maintains a strict "no drug" policy and offered to give $1000 bonus at the end of the year if all employees stayed clean, and no one ever showed up to work under the influence of illegal drugs. What type of consideration is Dusty requesting?  Is it adequate consideration that creates an enforceable contract?

6.    Accountant, Lin Jing, agrees to provide her client, ABC Pest Control, with annual services for $5000, which could include a variety of accounting services. When C.J. Willis, the owner of ABC Pest Control, gets a bill for $5,000 for the preparation of the company's state and federal tax returns, he does not agree that he owes Jing that much money and sends her a check for $500. He writes "paid in full" on the check. Jing cashes the check and then bills Willis for the balance of $4500.00, adding on a monthly service charge of 21%.  Define all the element of accord and satisfaction and apply each element to the facts in this case to reach a conclusion about whether Willis is legally obligated to pay any more money to Jing.