Which of the following is an example of a situation where the court will consider adequacy of consideration?
A)When someone purchases a TV for $500 and later discovers it is worth less than $100.
B)When someone purchases a house and discovers later that property values in the neighborhood are falling.
C)When someone purchases a car which is later subject to a manufacturer recall.
D)The court never considers adequacy of consideration.
E)When someone divests himself of all of his assets for a very small amount of money and then declares bankruptcy.

Question

Quizplus · Accepted Answer

A)If the court believes fraud or undue influence occurred,the court may look at the adequacy of consideration.If someone divests himself of all his assets for pennies on the dollar and then declares bankruptcy,the court would review the consideration paid to determine whether there was fraud by the debtor against the creditors.
B)If the court believes fraud or undue influence occurred,the court may look at the adequacy of consideration.If someone divests himself of all his assets for pennies on the dollar and then declares bankruptcy,the court would review the consideration paid to determine whether there was fraud by the debtor against the creditors.

Which of the Following Is an Example of a Situation