Essentials of Business Law 9th Edition Anthony Liuzzo Solutions Manual Full Chapter PDF
Essentials of Business Law 9th Edition Anthony Liuzzo Solutions Manual Full Chapter PDF
Essentials of Business Law 9th Edition Anthony Liuzzo Solutions Manual Full Chapter PDF
INSTRUCTOR’S MANUAL
Chapter 10 Consideration
LESSON OVERVIEW
The previous chapters dealt with the various kinds of agreements. Chapter 9 discusses the
nature and essentials of consideration, and through the use of examples, depicts their
relevance in real life situations. Students will learn that consideration plays an
promisor, promisee, pledge, general release, barren promise, preexisting duty, gratuitous
the topics is evaluated through objective-type questions, discussion questions, and case
scenarios. Students are encouraged to conduct their own research through the use of the
CHAPTER OUTLINE
10-1
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
KEY TERMS
Key terms are listed at the beginning of the chapter, posted in the student textbook
margins, and placed in bold in the copy. They are listed here for your quick reference.
10-2
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
LEARNING OUTCOMES
The chapter Learning Outcomes will help you and the students discover the concepts and
information that should be understood upon completion of the chapter. You may want to
access the PowerPoint (PPT) slides for Chapter 10 when you begin the study of the
chapter and discuss each Learning Outcomes. Each Learning Outcome will be covered
separately in the Instructor Notes, but they are shown here in total as an overview of the
sections being presented in Chapter 10. The corresponding text page numbers and PPT
slides are listed next to each outcome. These slides should be used to reinforce the main
10-3
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
LECTURE OUTLINE
10-4
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
10-5
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
10-6
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
INSTRUCTOR NOTES
A resulting answer or explanation is provided below for each Learning Outcome in
Chapter 10. Every outcome is also mapped to corresponding text page numbers, PPT
slides, and relevant chapter assessment exercises and activities for ease of reference and
use.
LO1. Explain consideration and define forbearance.
Consideration is the promises exchanged by the parties to a contract: either to
give up something of value they have a legal right to keep; to do something they
are not otherwise legally required to do; or to refrain from an action. The promise
to refrain from doing something that a party has a legal right to do, or the promise
of inaction, is known as forbearance.
Text Pages: 154
PowerPoint: Slide 2
Discussion Questions: 26
Think Critically About the Law: 35
Case Questions: 38
LO2. Identify and explain the three essential characteristics of valid consideration.
The three essential characteristics of valid consideration are (a) legality—a valid
contract does not exist if the consideration is a promise to perform an illegal act,
or to avoid performing an act that is legally required to be performed; (b)
adequacy—many consumer statutes have now been passed and unconscionable
contracts and contracts of adhesion are no longer enforced; and (c) the possibility
of performance—a legally enforceable contract cannot be based on a promise that
is impossible to fulfill.
Text Pages: 154-155
PowerPoint: Slide 3
Discussion Questions: 27, 28, 30
Thinking Critically About the Law: 33, 34, 35
Case Questions: 37, 38 39
Case Analysis: 41. 42
LO3. Describe the kinds of valid consideration, including (a) a promise for a promise,
(b) a promise of forbearance, and (c) a pledge or subscription.
Consideration can be based on a promise being exchanged for another promise. It
also can be based on forbearance, a party’s promise not to do something he or she
has a legal right to do. A third kind of valid consideration is a pledge, or
subscription (a promise to make a donation).
Text Pages: 155-157
PowerPoint: Slides 4- 9
True/False Quiz 13
10-7
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
LO4. Discuss the situations in which the UCC dispenses with the requirement of
consideration in contracts to sell goods.
The UCC dispenses with the requirement of consideration in contracts to sell
goods in the following situations: (a) a merchant’s written firm offer that provides
that the contract is irrevocable, (b) a written discharge of a claim for an alleged
breach of contract, and (c) modifications of existing contracts.
Text Pages: 157
PowerPoint: Slide 10
10-8
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
1. b 4. d 7. g 10. j
2. f 5. h 8. c
3. a 6. i 9. e
True/False Quiz
Discussion Questions
26. If a promise of forbearance has value to one of the parties of a contract, it would
satisfy the legal requirements of consideration.
27. The three characteristics of valid consideration are (1) legality of consideration,
(2) adequacy of consideration, and (3) possibility of performance. An example is
the case of Jones and Smith. They agreed that Jones would paint Smith’s house,
and Smith would pay Jones $1,000. The legality is seen in the exchange of
promises. The work to be performed was legal, the amount to be paid was
adequate, and painting Smith’s house was possible for Jones.
28. In the past, the courts generally made no attempt to judge the adequacy of
consideration until spurred by consumer protection statutes. Now the notions of
unconscionable contracts and contracts of adhesion are more widely applied.
29. Agreements that lack consideration include agreements based on barren promises,
gratuitous promises, moral consideration, and past consideration.
30. The law assumed that, provided no undue pressure was used, the parties were free
to reject an unfair offer.
31. In an attempt to level the playing field, many consumer protection statutes have
been enacted to address unconscionable contracts (contracts that are shockingly
unfair and unjust) and contracts of adhesion (contracts where the parties have
unequal bargaining power).
10-9
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
37. a. N b. N c. N
38. a. N b. Y c. Y
39. a. N b. N c. N
Case Analysis
40. Principle of law: The courts normally do not attempt to rule on the adequacy of
consideration, except in the case of unconscionable contracts.
Decision: There was sufficient evidence in this case for the court to rule that the
consideration was grossly inadequate, and there was evidence of a confidential
relationship because of the widow’s reliance on her brother’s assistance in
financial affairs.
41. Principle of law: Consideration is the exchange of promises.
Decision: Appeal denied. The decision rested on the fact that Sears kept their
promise, which was to provide Forrer with “permanent employment,” but the
duration was not specified in the promise. This case illustrates the need for
precision and completeness in contract wording.
42. Principle of law: Consideration was represented by the exchange of promises.
Decision: Spring Well would collect their fee because the consideration they
promised was to drill the well and not necessarily to bring in an active well.
10-10
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 10 – Consideration
43. Principle of law: Pledges and subscriptions are considered legally acceptable
consideration.
Decision: Judgment for Maitland.
BONUS ACTIVITIES
• Have students locate various types of contracts that contain all six elements of a
contract. Discuss the contracts in class, and have students point out what portion
• Have students use the Internet to locate articles about illusory contracts. Ask
them to bring the articles to class and select several for discussion.
10-11
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
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