First Principles of Business Law

Making a contract
3. The second essential element of formation: Formal execution or exchange of consideration
3.13. Promises to do something for a third party

 

 

 

Read the facts and the question and then choose the best answer.

A says to B: "I know that you bought C's car and must pay her $5,000 at the end of the month. C owes me $5,000 and I need the money. I will pay you $100 if you promise me that you will pay C on time."

B replies: "OK, for $100 I promise you that I will pay C what I owe her at the end of the month."

Has B given A sufficient consideration to make A's promise to B legally enforceable?

 

(b) No. B's promise to A to pay C is not sufficient consideration for A's promise to B.

(a) Yes. B's promise to A to pay C is sufficient consideration for A's promise to B.

 

 

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