Asked by Angela Fuquay on Apr 27, 2024
Verified
Henry agrees to give Beth $100 in exchange for her $50.Which of the following statements is true?
A) The agreement violates the parties' freedom of contract.
B) The agreement is supported by nominal consideration.
C) The inadequacy of consideration is apparent on the face of the agreement.
D) The consideration is insufficient because it is based on past performance.
Nominal Consideration
A very small or token amount paid in a transaction to make it legally valid, even though the actual value of the transaction may be much larger.
Freedom of Contract
The freedom to enter into and enforce contracts without unnecessary interference by the state.
Adequacy
The state of being sufficient or appropriate in quantity, quality, or degree.
- Assess the contribution of nominal consideration to contractual agreements and its repercussions on their legality.
Verified Answer
MZ
michell zhengApr 30, 2024
Final Answer :
C
Explanation :
Several qualifications must be made concerning the general rule on adequacy of consideration.First,if the inadequacy of consideration is apparent on the face of the agreement,most courts conclude that the agreement was a disguised gift rather than an enforceable bargain.Thus,an agreement calling for an unequal exchange of money (e.g. ,$500 for $1,000)or identical goods (20 business law textbooks for 40 identical business law textbooks)and containing no other terms would probably be unenforceable.
Learning Objectives
- Assess the contribution of nominal consideration to contractual agreements and its repercussions on their legality.