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Throughout this module you learned the basics of contract formation. An additional requirement of contract formation is consideration. The courts separate legally binding obligations from mere agreements by checking for consideration. Under basic principles of contract law, consideration is the answer to the question, “Why are you entering this contract?” or “What are you receiving for being a party to this contract?”

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Consideration, quite simply, is the benefit that each party gets or expects to get from the contractual deal. For example, you paid your college tuition money for an education. You benefit by receiving the educational services of the college, and the college benefits by receiving your tuition money.

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For this written assignment, you will further explore the topic of consideration and whether it is present in the following scenarios. Read the facts of the scenario and answer the following questions:

  1. Is there proper consideration? (Further research on consideration is recommended)
  2. Why or why not is there valid consideration?

Your answer to each scenario should be a paragraph in length and must include the source of your information in a properly formatted APA citation.

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Scenario 1:

Tasha rents an apartment in an undesirable part of town. While others, such as her Aunt Rita, find it unsuitable, Tasha seems fine with her living situation. She never experiences any problems with the neighbors, and the rent is cheap. One day during a phone call, Aunt Rita tells her that she wants to gift her $10,000 for anything of her choosing. Tasha figures that this is her aunt’s backhanded way of getting her to move, so she decides to search for a home. Upon finding a home, Tasha calls her Aunt Rita and asks for the money. Rita changes her mind and tells Tasha that she no longer wants to give her the money. Angrily, Tasha hangs up the phone and heads to the courthouse to sue her aunt for the $10,000. Is there consideration?

Scenario 2:

Officer Friendly notices a poster announcing that a reward is being offered for the capture of a nefarious criminal, Fred Doesnogood. During his evening patrol, Officer Friendly apprehends and arrests Doesnogood. After he completes his shift he decides to call the number to get the reward seeing as he is the one who captured him. Will he be able to get the reward? Is there consideration?

Scenario 3:
Ezra loves watching home improvement shows, but is not that handy when it comes to doing the actual improvements at his house. During one of his favorite shows, an ad appears for a local painting company that is running a fantastic deal. He calls the number and arranges for Izzy to paint his house on Friday. Izzy shows up on Friday and they agree upon a price of $700.00 for the exterior of the house to be painted. Izzy completes the job to the satisfaction of Ezra, but he does not seem to want to pay. Is there consideration?

Submit your completed assignment by following the directions linked below. Please check the Course Calendar for specific due dates.

Save your assignment as a Microsoft Word document. (Mac users, please remember to append the “.docx” extension to the filename.) The name of the file should be your first initial and last name, followed by an underscore and the name of the assignment, and an underscore and the date. An example is shown below:

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