Courts generally do not consider the economic adequacy of consideration when deciding whether to enforce a contract.

Question

BlackTom AI · Accepted Answer

In evaluating contract formation, the key issue is whether consideration exists and is bargained-for, not whether the deal is economically fair. 
Option 1: True. Courts typically do not assess the economic adequacy of consideration; they focus on whether consideration exists and whether there is a voluntary agreement, unless there are issues like duress, fraud, or unconscionability that would require intervention. Broadly speaking, unequal or seemingly one-sided deals are not automatically invalidated simply due to poor economic value. 
Option 2: False. Claiming that courts consider economic adequacy would imply they routinely strike down or invalidate contracts because one side’s consideration is worth far less than the other’s, which is not how contract law operates in most ordinary cases. The law expects parties to negotiate and accept risk, and it generally defers to their assessment of value unless there are special circumstances such as misrepresentation, duress, or gross unconscionability that would invalidate the agreement. 
Option 3: False. If the evaluation were about only whether there is any consideration at all, that would be true, but the statement asserts a broader standard about economic adequacy, which is contrary to standard practice. The reality is that adequacy is not typically a controlling factor. 
Option 4: True. Some scholars worry that courts should consider fairness, but the prevailing doctrine remains that economic adequacy is not a prerequisite for enforceability, reinforcing the principle that the substance of the bargain matters more than its comparative value.

BUSFIN 3500 AU2025 (2111) Final Exam Au_1_25- Requires Respondus LockDown Browser

Courts generally do not consider the economic adequacy of consideration when deciding whether to enforce a contract.

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