Courts Generally Do Not Examine the Adequacy of Consideration

question 55

Essay

Courts generally do not examine the adequacy of consideration.Under what circumstances will a court look into the adequacy of consideration in a contract? Should the courts be more proactive or less proactive in this area?

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Definitions:

Direct Labor-hours

The overall hours that workers, who are a part of the manufacturing operations, put in.

Activity-based Costing

A costing method that allocates overhead costs to products based on the activities required to produce those products.

Record-keeping Cost

Expenses associated with maintaining accurate and comprehensive records of a company’s financial transactions and operations.

Overhead Cost Pool

A collection of indirect costs that are grouped together to aid in their allocation to cost objects.