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Short CASE Studies
Problem 1:
Consider the following situations and indicate whether consideration is present and whether Jack has an enforceable agreement:
a) Jane is going overseas and she offers to give her Lotus Super 7 sports car to Jack. The market value for this type of vehicle in good condition is around $25 000. Jack accepts.
b) Jane offers to sell Jack her Lotus Super 7 sports car for $25 000. The market value for this type of vehicle in good condition is around $25 000. Jack accepts.
c) Jane offers to sell Jack her Lotus Super 7 sports car for $2500. The market value for this type of vehicle in good condition is around $25 000. Jack accepts.
Problem 2:
A shipbuilder had contracted to build a tanker for North Ocean Tankers. The contract was in US dollars and didn't contain any provisions for currency fluctuations. Approximately halfway through construction of the ship, the United States devalued its currency by 10 per cent. As the shipbuilder stood to make a loss on the contract, it demanded that an extra US$3 million be paid or it would stop work. The buyer reluctantly agreed under protest to pay, as he already had a charter for the tanker and it was essential that it be delivered on time. The buyer didn't commence action to recover the excess payment until some nine months after delivery. Will the buyer succeed in recovering the excess?
Words Limit: 2000
Reference: Required
Verified Expert
In this case, Jane offers to sell her sports car to Jack on a price which is lower than the market price of the car. The market value of the car is $25 000 while Jane offer to sell it for only $2500. Jack accepts the offer to buy the car in $2500. For a good consideration to take place, the promisee negotiates and pays the amount in exchange of the promised service or performance.
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