11 Powell worked for 13 years for CAIRE and then became its

11. Powell worked for 13 years for CAIRE and then became its CEO and president. Later, the parent company of CAIRE became controlled by a group of investors The president of the parent company asked Powell to resign but wanted him to continue to attend trade association meetings and lobby on CAIRE\'s behalf. He was also asked to tell people his resignation was voluntary. Powell said he was promised that he would be paid $125.456 per share for his stock in the parent. Powell did as requested for three months until asked to stop. When the company refused to pay him $125.456 for the stock, he sued. Did the agreement between Powell and the president of the parent lack consideration? Why or why not? 12. Barondes made a charitable pledge of $2,000 to the Jewish Federation that he later refused to pay. Can the pledge be enforced despite the lack of consideration

Solution

11. No, the agreement between Powell and the president of the parent did not lack consideration. As per business law consideration is something of value that is given in return for a performance. To put it simply consideration is the benefit that each party to a contract receives in a contract.

In this case Powell’s lobbying activities will be considered as consideration for the stock redemption. The consideration that Powell furnished in the form of lobbying activities is not as significant as the benefits being promised by CAIRE. However, nonetheless, it is still a consideration. The benefit received by Powell is in the form of promise for payments for stocks and the benefit received CAIRE is the lobbying done by Powell.

Thus the contract had consideration and hence is not void.