Question

The rule on adequacy of consideration reflects the laissez-faire assumption of freedom of contract.

a. True
b. False

Answer 1

true. The rule on adequacy of consideration reflects the laissez-faire assumption of freedom of contract.

Step-by-step explanation:

The statement 'The rule on adequacy of consideration reflects the laissez-faire assumption of freedom of contract.' is true.

Adequacy of consideration refers to the fairness and value of the exchange between parties in a contract. In a laissez-faire economy, the government does not interfere in private contracts and allows individuals to freely negotiate and determine the terms, including the consideration.

For example, if a person agrees to sell a car for $1, the consideration may be nominal, but it is still deemed valid as long as both parties willingly and knowingly agreed to the terms.