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.

Question

Quizplus · Accepted Answer

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.

Henry Agrees to Give Beth $100 in Exchange for Her