think tank forum

I am engaging in this contract with a fellow classmate.

Terminology:
Contract proposal: to start a new contract.
Contract buyout: to terminate a contract.
Full Completion: To fully satisfy the requirements of the contract.
Partial Completion/Partial Breach: To partially fulfill the terms of
the contract.
Breach: To fail to satisfy the contract.

Rules:
1. Contract Proposal: Contract proposal is free.
2. Normal Buyout: Contract buyout 15 USD.
3. Exchange: Contract exchange. The contract buyout fee is only 5 USD
if the bet is exchanged for a new bet.
4. Trivialization Buyout: A contract that has been fully completed for
the last 10 occasions as well as the last 5 weeks may be deemed
'trivial'. A contract can be terminated at no cost if it has been
deemed 'trivial'.
5. No exceptions: A contract must either be completed or breached.
There is no room for extenuating circumstances.
6. Contract adjustment: A contract may be adjusted to change the terms
of the contract for 5 USD.
7. New contract adjustment: A contract that has been proposed within
the last 2 weeks may be adjusted at no charge.
8. Contract Extension: Rather than declaring a breach, some contracts
that are at risk of breach may be extended into the subsequent
contract period at a penalty outlined in the contract.
9. Payments: Will be made on an ongoing basis based on convenience

INITIAL CONTRACT PROPOSALS for Francis Smart

TIME-FRAME: All of 2010.
1. Workout: Francis will workout for a minimum of 30 minutes. Each
workout must be done within 2 days of the previous workout. There is
a 2 USD fee for each contract period missed. The workout contract may
be extended once so long as the subsequent workout is at least 1 hour
and 3 days after the previous workout. Failure to make the subsequent
workout results in a 4 USD fee.
2. Minimum Focus: Francis will spend at least two 30 minute time
blocks focusing on research or studying each day. There is a 1 USD
fee per 30 minute time block. This contract may be extended for one
day.
3. Tardiness: A fee of 2 USD will be assessed to Francis for arriving
late a class.
4. Truancy: A fee of 5 USD will be assessed to Francis for missing class.

that contact is non-binding for lack of consideration.

does your counterparty pay you to enter the contract?

$1 is usually insufficient consideration. but in this contract, the payoffs are very small. so you should have your counterparty simply pay you $1 as consideration. the contract would then likely bind.

in my business practices for photographers book. the author suggests that the photographer carry some dollar bills around with model releases. then when you photograph someone, you ask them to sign the release, and you pay them $1 in consideration. i have problems with this.

as i said before, $1 is usually deemed by courts to be insufficient for consideration. the photographer probably needs to pay an amount commensurate with market wages. the problem is that snapping a photo of someone may not consume any of their time. they're simply forfeiting an intangible right of which the market value is extremely difficult to determine. even if you might go on to sell the photo for $10,000, the probability of that happening is extremely low, so the expected value of the photo may easily be $1. so would a court deem $1 to be valid consideration in that case?

i would think it unlikely, though that sounds like a valid argument

i wasn't even thinking about it from that perspective. i was thinking that this contract has a positive expected value for the counterparty.. why wouldn't you sell it?

well, the only thing is that this isn't the whole deal. this is my side of the contract and i wait to see what she says for her side. if she agrees to similar terms then we have consideration.

> why wouldn't you sell it?

because he's such a nice guy!

ah, that makes more sense.

give me $1,000 and i'll give you $5 back every time you work out

i would think that such a proposal would require a well specified time frame. what would happen if i took to working out in the mornings and evenings for 1/2 hour each day for the next 3-months? after that it would all be cash in the pocket. for the rest of my life?