Sports Bar & Grill and Ace Medical Clinic are adjacent businesses with adjoining parking lots. Sports Bar & Grill offers Ace Medical Clinic a discount on purchases if Ace Medical Clinic will not tow the cars of Sports Bar & Grill patrons who park in Ace Medical Clinic's parking lot. Ace Medical Clinic agrees. Ace Medical Clinic's forbearance from towing is legally sufficient consideration

Question

BlackTom AI · Accepted Answer

First, let's restate the scenario to set the stage: Sports Bar & Grill and Ace Medical Clinic are neighboring businesses with adjoining parking lots. The bar agrees to give Ace a discount on purchases in exchange for Ace not towing the cars of the bar's patrons who park in Ace's lot. Ace agrees. The question asks about Ace Medical Clinic's forbearance from towing being legally sufficient consideration.
Option 1: 'Under no circumstances.' This is incorrect because the forbearance from towing can constitute valid consideration if it is bargained-for in exchange for the discount. The law recognizes forbearance from a legal right as valid consideration when a party gives up a right in exchange for a promise.
Option 2: 'Only if Sports Bar & Grill's patrons park in Ace Medical Clinic's lot.' This is overly narrow and introduces an unnecessary condition. While the arrangement involves parking, the key issue is that Ace relinquishes its towing right in exchange for the discount, not that a subset of patrons must park there. The consideration can be present even without a specific subset meeting the condition.
Option 3: 'Because it is a promise of something of value.' This is the core concept of consideration in contract law: a bargained-for exchange where each party gives something of value (Ace forgoing the right to tow, in exchange for the discount). This statement accurately characterizes why the forbearance from towing satisfies consideration.
Option 4: 'Only if Ace Medical Clinic's customers cannot park in its lot because it is full.' This option introduces an artificial constraint unrelated to whether forbearance from towing constitutes consideration. The legality of the forbearance depends on the existence of a bargained-for exchange, not on parking lot occupancy levels.
In summary, the correct reasoning is that forbearance from towing is valid consideration because it represents a promise of something of value given in exchange for a promise (the discount). The other options misstate or overcomplicate the concept of consideration and do not accurately describe why the arrangement suffices as consideration.

ACCT:4300:0001 Fall25 Examination #1 - Accounting Ethics and Law- Requires Respondus LockDown Browser

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