Contracts

Issue Spotting Exercise

CONTRACTS

CONTRACTS ISSUE SPOTTING EXERCISE

Consider the fact pattern below and then answer the questions that follow:

Sam was walking down the sidewalk when he heard shouts coming from a burning
house. Sam immediately called 911 on his cell phone and rushed into the house.
Inside the house, Sam discovered Resident trying to coax Resident’s frightened dog
from behind a couch. Sam, at great risk to his safety, crawled behind the couch and
pulled the dog from its hiding place. Sam, carrying the dog, and Resident then safely
made their way outside.

Once outside, Resident thanked Sam and asked Sam about his work. Sam told Resi-
dent, “I was hoping to start training as a paramedic in the fall, but I don’t think I’ll be
able to afford the cost of the program.”

Resident responded, “We need all the good paramedics that we can get! If you are
going to start paramedic training, I want to help you. Also, my dog means everything
to me. I want to compensate you for your heroism. Give me your address, and I will
send you a check for a thousand dollars.”

Sam said, “Thank you so much! Here is my address. I’ll apply to the paramedic pro-
gram tomorrow.”

Sam applied to the paramedic training program but was denied admission. Sam then
applied for and was accepted into a cosmetology training program and owes that pro-
gram $1,000. Sam cannot pay the $1,000 he owes because when Resident learned
Sam was not attending the paramedic program, he refused to give Sam the $1,000.

Sam sued Resident to recover the $1,000.

What theories could Sam assert to recover all or some portion of the $1,000, and
what is the likelihood of success on each theory? Explain.

Copyright © 2009 by the National Conference of Bar Examiners

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 ISSUE SPOTTING EXERCISE

In this exercise, you will practice reading through an essay prompt and identifying the
relevant issues and their corresponding facts. The goal is not to write out, or even
create a complete outline for, this essay. Instead, this exercise will help you:

● Understand how this subject has been tested on past essays;

● Practice using facts to identify tested issues;
● Practice identifying relevant facts in a fact pattern; and
● Practice analyzing the call(s) of the question to determine what issues are
being tested.

The call of this question can be broken out into several issues. What issues
are the bar examiners testing in this essay?

ISSUE 1:
The issue is whether there was a consideration to the promise between Sam and the
Resident

Identify two key facts from the prompt that implicate this issue:

1. The resident ofered a check for his heroism

2. Sam rescued the Resident and his dog.

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CONTRACTS

ISSUE 2:
The issue is whether a past act is valid as a consideration

Identify two key facts from the prompt that implicate this issue:

1. The Resident didnt ask Sam to act.

2. Sam´s act is a past act. Acts that already ocurred are not valid as a consideration

ISSUE 3:
The issue is whether Sam may recover something for his reliance on the Resident´s
promise.

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 ISSUE SPOTTING EXERCISE

Identify two key facts from the prompt that implicate this issue:

1. The resident offered the check for applying to paramedic

2. Sam was not admitted. Applied to something else.

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CONTRACTS

CONTRACTS ISSUE SPOTTING EXERCISE ANSWER KEY

The call of the question can be broken out into several issues. What issues are
the bar examiners testing in this essay?

ISSUE 1:

Whether there was consideration for Resident’s promise to pay toward the cost of
Sam’s program

Identify two key facts from the prompt that implicate this issue:

1. Sam rescued the dog before Resident offered to help pay for his program

2. Resident offered to pay before Sam promised to sign up for paramedic program

ISSUE 2:

Whether a material benefit to Resident created moral consideration for his promise
to pay

Identify two key facts from the prompt that implicate this issue:

1. Sam rescued the dog at great risk to his own safety; no indication that motive
was compensation

2. Resident said “my dog means everything to me”; offered $1,000

ISSUE 3:

Whether the theory of promissory estoppel will allow Sam to enforce Resident’s promise

Identify two key facts from the prompt that implicate this issue:

1. Sam told Resident that he would not be able to afford cost of paramedic program

2. Sam signed up for program after Resident promised to pay $1,000 toward
Sam’s program

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 ISSUE SPOTTING EXERCISE

JULY 2009 Q005

SAMPLE ANSWER—CONTRACTS

I. BARGAINED-FOR EXCHANGE
The issue is whether there was a bargained-for consideration between Sam and
Resident.

A valid contract requires an offer, acceptance, and consideration. Generally a prom-

ise is unenforceable unless supported by consideration. The promissor must ask for
and receive something of value in return for his promise to pay. The promise to pay
must be in exchange for the thing sought. Recognition of a prior act is not sufficient
to create consideration.

Here, there was a rescue of the dog by Sam before Resident’s offer to give money.
Sam mentioned an interest in paramedic school but had no money to attend. Resi-
dent said he would send money because Sam rescued the dog. There was no
bargained-for exchange in the conversation.

Therefore, Resident’s promise to pay Sam was not a contract because there was no
bargained-for consideration for his promise.

II. MORAL CONSIDERATION

The issue is whether the benefit Sam conferred on Resident by saving his dog cre-
ates a moral obligation on Resident to fulfill his promise.

The Second Restatement recognizes moral consideration where a promissor re-

ceives a material benefit from the promisee. Not all states recognize moral consider-
ation. In states that recognize moral consideration, if the material benefit was intend-
ed as a gift, then no moral consideration exists. Similarly, if the material benefit is
disproportionate to the promise, then the promise may be only partially enforceable.
There must not be simply a sentimental or affective benefit. The material benefit
must be received by the promissor and not someone else.

Here, it is unclear whether Sam intended his rescue of Resident’s dog to be a gift or
whether he anticipated the possibility of a reward. If Sam acted without thought of
compensation, then he probably did not create moral consideration for Resident’s
subsequent promise. Even if there was moral consideration, Resident’s promise of
$1,000 may be disproportionate to the value of saving the dog. Moral consideration
will bind Resident only to a proportionate promise.

If the rescue of the dog was not a gift, there may be moral consideration, but it will
likely be reduced to the value of the dog.

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CONTRACTS

III. PROMISSORY ESTOPPEL

The issue is whether Sam can enforce payment from resident based on the theory of
promissory estoppel.

A promisee that reasonably relies to his detriment on a gratuitous promise may be

able to enforce that promise. The doctrine of promissory estoppel allows for the en-
forcement of certain promises even where there is no consideration in return. Prom-
issory estoppel requires that (1) there is a promise; (2) the promisee’s reliance was
foreseeable; (3) the promisee’s reliance was actual; and (4) the action in reliance
was detrimental to the promisee, resulting in injustice unless the promise is enforced.

Here, Resident made a definite promise to Sam and Sam said he was going to act
on it immediately. Resident promised to give Sam $1,000. Sam applied to paramedic
school in reliance of receiving money. Sam was not admitted but did apply to cos-
metology school. Sam’s reliance created detriment for him by putting him in debt to
the school. Resident may be able to argue that no injustice occurred because Sam
did not register for paramedic school but, instead, registered for cosmetology school.
However, Resident told Sam that the reward was for Sam’s heroism. Therefore, Sam
could argue that his choice of careers was incidental to the promise. Any recovery on
this theory, however, is limited to the amount necessary to prevent injustice.

Sam may be able to recover portion or all of money promised sufficient to prevent
injustice.