After an accident with a vehicle licensed to Guardian Security Company,Heidi signs a covenant not to sue Guardian Security for damages in a tort action if it pays for the damage to her car.This covenant is
A)a bar to recovery only if Guardian Security pays.
B)an illusory contract.
C)barred by the preexisting duty rule.
D)barred by the doctrine of promissory estoppel.

Question

Quizplus · Accepted Answer

The covenant not to sue is only effective if Guardian Security actually pays for the damage to Heidi's car. If they do not pay, she can still bring a tort action against them. Therefore, the covenant is not illusory (choice B), and it is not barred by the preexisting duty rule (choice C) or promissory estoppel (choice D).

After an Accident with a Vehicle Licensed to Guardian Security