Bar Exam (US) Contracts: Question below is based on the following fact situation. Asburn, Craig,...

Question

Question below is based on the following fact situation.

Asburn, Craig, and Thornberry were old friends who had served together in the Navy during World War II. For over forty years, they lived in the same neighborhood in the town of Metsville. While Asburn was away on a business trip to Philadelphia, someone broke into his garage and stole his golf clubs. The next week, Asburn was planning to go on vacation in Bermuda and asked Craig if he could borrow his golf clubs. Craig agreed and loaned his golf clubs to Asburn, who promised to return them after his vacation. When Asburn returned home from Bermuda, he kept Craig's golf clubs and continued to use them.

A few weeks later, Craig was having dinner with Thornberry and learned that he owed Asburn $4,000. Thornberry had just been laid offhis job and didn't have the money to repay Asburn. Craig felt indebted to Thornberry ever since he saved Craig's life during the battle of Iwo Jima. As a result, Craig told Thornberry that he would contact Asburn and make arrangements to repay the loan on his behalf.

Thereupon, Asburn and Craig entered into a written agreement wherein Craig promised to pay Asburn, at a rate of $400 a month, the matured $4,000 debt that Thornberry owed Asburn. In the same written instrument, Asburn promised to return Craig's golf clubs, which he still had in his possession. Asburn, however, made no written or oral commitment to forbear to sue Thornberry to collect the $4,000 debt, and Craig made no oral or written request for any such forbearance.

After this agreement between Asburn and Craig was signed and executed, Asburn promptly returned the golf clubs to Craig. For the next six months, Craig made the $400 monthly payments as agreed. During that period, Asburn did not take any legal action against Thornberry. Craig then repudiated his agreement with Asburn, and thirty days later, Asburn filed a contract action against Craig.

Assume for the purposes of this question only that the applicable statute of limitations on Asburn's antecedent claim against Thornberry expired the day before Asburn filed his contract action against Craig. Which of the following is the most persuasive argument that Craig is not liable to Asburn under the terms of their written agreement?

AnswerChoose the correct answer.Choose all that apply. Correct Partially correct Incorrect Don't Know

  1. A
    Correct Answer
    Since Asburn did not expressly promise to forbear to sue Thornberry to collect the antecedent $4,000 debt, Asburn's forbearance for six months could not constitute consideration for Craig's promise.
  2. B
    Correct Answer
    Since the written agreement between Craig and Asburn shows a gross imbalance between the value of the promises exchanged, the consideration for Craig's promise was legally insufficient to support it.
  3. C
    Correct Answer
    Since Thornberry, when the Craig- Asburn agreement was made, had a pre-existing duty to repay his $4,000 debt to Asburn, there was no consideration for Craig's promise to Asburn.
  4. D
    Correct Answer
    Since Asburn had a pre-existing duty to return Craig's golf clubs to him when the Craig-Asburn agreement was made, there was no consideration for Craig's promise to Asburn.
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