Dan,President of BAZ Co. ,is happy with the extraordinary performance of Naomi,a BAZ Co.senior accountant.Dan informs Naomi that because of her superlative work in the past fiscal year,he is going to give her a 5 percent raise effective next month.Naomi,who has never heard of anyone at BAZ Co.getting a raise,is thrilled and thanks Dan.Later that day,Dan realizes that giving Naomi this raise might cause all senior accountants to demand salary increases.Dan decides not to give Naomi a raise after all.He believes that his promise to give her a raise is not legally binding.Dan is correct because:
A)there was no bargained-for exchange for the raise.
B)of the "preexisting duty" rule.
C)past consideration is not an act or promise.
D)past consideration is not liquidated.

Question

Quizplus · Accepted Answer

The fact that a promisee's act or promise provides legal value is not,in itself,a sufficient basis for finding that it amounted to consideration.In addition,the promisee's act or promise must have been bargained for and given in exchange for the promisor's promise.In effect,it must be the price that the promisor asked for in exchange for making his promise.