Asked by aradhana mehra on Jul 27, 2024
Verified
Why are "disguised gift" promises involving nominal consideration nonbinding because of the absence of consideration? Explain with one example.
Disguised Gift
A transaction or transfer of property where the true intent is to give the item rather than sell it at its full value.
Nominal Consideration
A token amount in a contract to validate it, which may not necessarily reflect the true value of the contract's subject matter.
Consideration
Something of value (such as money, service, promise, or goods) that is given by both parties to a contract that compels mutual obligation.
- Examine the function of nominal consideration within contracts and its effect on making agreements enforceable.
Verified Answer
JG
Jeron GallimoreAug 02, 2024
Final Answer :
"Disguised gift" promises involving nominal consideration are nonbinding due to the bargained-for exchange requirement.Suppose that Dad promises to give Donald a Toyota Supra Turbo for his graduation,in exchange for Donald's promise to pay Dad $1.No doubt Donald promised the $1 to get Dad's promise,but how could Dad have promised Donald the car to get Donald's promise of $1?
Learning Objectives
- Examine the function of nominal consideration within contracts and its effect on making agreements enforceable.