ADMS 2610 Chapter 8: chapter8. The requirement of consideration.docx

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pearimpala756

16 Jun 2012

School

York University

Department

Administrative Studies

Course

ADMS 2610

Professor

Robert Levine

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Document Summary

The requirement of consideration: nature of consideration: the something that the promisor receives in return for the. Performance of a particular service promisor"s promise is called consideration- a vital element of every simple contract. A promise not to do something by a promisor. Note: no consideration arises unless the promisor gets something in return from the promise, till then it is an act of gratuitous. All acts of gratuitous does not form consideration and is not a contract. Where a gratuitous offer of a service if accepted, must be performed with care and skill, otherwise, the promisor will be liable for any loss suffered as a result of careless performance or negligence. (an act of tort) In the case of negotiable instruments, a person may be liable on a promissory note or other negotiable instrument to a subsequent endorser, even though no consideration exists between them.

Related Questions

1. Assume that the high costs of performing cause the promisor to breach a contract and pay perfect expectation damages to the promisee. Would the promisee have preferred that the promisor perform?

2. Explain the gain in total payoffs from allowing the promisor to breach and pay expectation damages when performing is efficient.

Variable Consideration-One of the more difficult issues that companies face in recognizing revenue is determinin the transaction price. In cases where the consideration in a contract includes a variable amount, an entity should estimate the amount of consideration to which it is entitled in exchange for transferring the promised goods or services. Required: Discuss the methods a company may use to estimate variable consideration and the situations in which one method may be preferred over another

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Negotiable instruments are transferred every business day of the year. Make a checklist for the potential buyer or holder of a negotiable instrument. Remember they are going to give something of value in return for this document and they don't want to risk losing their value. Also, this is someone who knows nothing about negotiable instruments. Make sure you discuss all types of negotiable instruments. Be practical and creative. Think of the person who is thinking of taking a promissory note for payment of a debt or a second party taking a check. Try and think of ways that you can help them from making a bad mistake. Post your list. Example: You have been approached by a mortgage lender to buy several notes at a discount what would you want to know about the notes?

blackdeer622

ADMS 2610 Chapter 8: chapter8. The requirement of consideration.docx

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