The Code provides an exception to the executory promise rule in:
A) the making of an irrevocable obligation to a third party.
B) the giving of a negotiable instrument.
C) the lack of notice.
D) Both the giving of a negotiable instrument and the making of an irrevocable obligation to a third party are correct.

Question

The Code provides an exception to the executory promise rule in:
A) the making of an irrevocable obligation to a third party.
B) the giving of a negotiable instrument.
C) the lack of notice.
D) Both the giving of a negotiable instrument  and the making of an irrevocable obligation to a third party  are correct.

Quizplus · Accepted Answer

The Code, referring to the Uniform Commercial Code (UCC), provides exceptions to the executory promise rule in both the cases of giving a negotiable instrument and making an irrevocable obligation to a third party. These exceptions allow for these types of promises or obligations to be considered as adequate consideration, even though they might not have been fully executed at the time of the agreement.

The Code Provides an Exception to the Executory Promise Rule