Business Law I Chapter 9 Answers
Business Law I Chapter 9 Answers
1. Consideration consists of mutual exchange of gains and losses between contracting parties. In the exchange, a gain by the offer is at the same time a loss to the offeror. The legal term used to designate the gain that each party experiences is that party’s legal benefit. Consideration has three characteristics 1) The agreement must involve a bargained-for exchange; 2)the contract must involve adequate consideration; and 3) the benefits and detriments promised must themselves be legal. 2. A legal detriment can be any of the following: 1) doing something that one has a legal right not to do; 2) giving up something that one has a legal right to keep; and 3) regaining from doing something that one has a legal right to do. 3. The law will not enforce an agreement that has not been bargained for. An agreement involves a bargained-for exchange when 1) a promise is made in exchange for another promise, 2) a promise is made in exchange for an act, or 3) a promise is made for forbearance of an act.
4. A court may refuse to enforce a contract or any clause of a contract if is considers the contract or clause unconscionable, that is, the consideration is so ridiculously inadequate that it shocks the court’s conscience. This designation usually happens when there is a great inequality in bargaining power between the two parties. 5. Consideration can be a promise not to sue. A promise not to sue, when there is right, or at least the apparent right, to sue, is enforceable when it is supported by consideration. Promising not to sue is forbearance. Acceptance of an agreement not to sue, supported by consideration, terminates one’s right to continue any lawsuit, presently or on the future, on grounds described in the agreement.
6. There are three ways that the courts can seek to uphold charitable pledges. The first way involves actual consideration, which occurs when charitable contributions are made on the condition that the promisor be remembered for the gift by having his or her name inscribed in some way on a memorial associated with the project. Another approach is to use either promissory estoppel or public policy to support the claim. Also, when there is no promise to carry out a specific project, the courts have held each pledge made is supported by the pledges of all others who have made similar pledges. This concept of consideration is used in support of all promises of money for undefined causes.
7. If a creditor accepts as full payment an amount that is less than the amount due, the dispute has been settled by an accord and satisfaction. Accord is the implied or expressed acceptance of less than what has been billed the debtor. Satisfaction is the agreed-to settlement contained in the accord. Only if the dispute is honest, and the offer to settle made in good faith, and not superficial or trivial will the courts entertain arguments based on accord and satisfaction. 8. The agreements that be enforceable by a court of law even though they lack consideration are: a) Promises under seal – enforceable in some states for contracts not involving goods Unenforceable under UCC for contracts involving goods.
b) Promises after discharge in bankruptcy – enforceable in most states. c) Promise to pay debts barred by statute of limitation – enforceable. d) Promises enforced by promissory estoppel – enforceable only if offeror knew that offeree would rely on the promise and offeree places himself in a different and difficult position as a result of that promise. e) Option – enforceable under UCC if made by a merchant, in writing, stating the time period over which the offer will remain.
9. Promissory estoppel is a legal doctrine that restricts a party from denying that a promise was made under certain conditions, even though consideration has not been exchanged to bind an agreement. To be effective, promissory estoppel requires that the party making the promise know, or be presumed to know, that the other party might otherwise make a definite and decided change of position in contemplation of those promises. In reaching this doctrine, courts have accepted the principles of justice and fairness in protecting the party receiving the promise from otherwise unrecoverable loses. 10. Shopping online is one of the fastest growing market places on record. Despite its many advantages (quick & efficient, comparison shopping, availability of hard-to-get products) , there are many difficulties: – Cyber-payment option: Wide variety of methods. One of the most popular methods is by credit/debit card.
Most online sellers will accept the major credit cards such as Visa, Master Card. This type of system protects both the buyer and the seller. This process may become the most acceptable process because most of the times when people buy and sell in cyberspace they are dealing with strangers. The online payment process eliminates the identity verification problem. This is important because one of the biggest concerns about online shopping is security. – Cyber-Payment Security Issues: the ease and efficiency of using credit/debit cards is frequently offset by the security concerns associated with their use. The US is not up-to-date as the EU in providing data and privacy protection to its consumers.
The EU Data Protection Directive along with EU E-Privacy Directive guarantee the rights of European citizens while at the same time ensuring the smooth exchange of data among those nation-states that honor the privacy and data protection standards themselves. US corporations that are involved with EU corporations must demonstrate that, despite the lack of legislation in the US, the companies themselves will promise to honor the same degree of protection to data and to privacy as guaranteed by the EU. These guarantees have been labeled the Safe Harbor Principles. They are enforced by the US Department of Commerce. It is best for a consumer to check directly with the US Department of Commerce to determine the true status of a company rather than just relying on the company’s blanket assertion that they follow the safe harbor standards.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 17 October 2016
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