Which of the following is an example of a situation where the court will consider adequacy of consideration?

A) When someone purchases a TV for $500 and later discovers it is worth less than $100.
B) When someone purchases a car which is later subject to a manufacturer recall.
C) When someone purchases a house and discovers later that property values in the neighborhood are falling.
D) When someone divests himself of all his assets for a very small amount of money and then declares bankruptcy.
E) The court never considers adequacy of consideration.

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Jacqueline Aquino · Accepted Answer

Final Answer : D, Explanation :  The court will consider the adequacy of consideration if the transaction appears to be unconscionable or if there's evidence of fraud, duress, or undue influence. Divesting oneself of all assets for a very small amount of money and then declaring bankruptcy could indicate an attempt to defraud creditors, which is why the court would scrutinize the adequacy of consideration in this scenario.

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