Question 1

According to the UCC, only a merchant can make a firm offer to a buyer.

Accepted Answer

A) True 
 B)False

Question 2

Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct?

Accepted Answer

A)  Marilyn will have to pay $20,000. 
B)  This is a contract under seal which is enforceable. 
C)  This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. 
D)  This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders. 
A)  Marilyn will have to pay $20,000. 
B)  This is a contract under seal which is enforceable. 
C)  This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. 
D)  This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.

Question 3

Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. In this case:

Accepted Answer

A)  the doctrine of promissory estoppel can be applied. 
B)  the promise to pay $20,000 is a promise to give a gift and is therefore not enforceable. 
C)  under the Restatement, Barbara's promise is enforceable only if it is in writing. 
D)  Barbara's promise is not enforceable because the church did not give consideration. 
A)  the doctrine of promissory estoppel can be applied. 
B)  the promise to pay $20,000 is a promise to give a gift and is therefore not enforceable. 
C)  under the Restatement, Barbara's promise is enforceable only if it is in writing. 
D)  Barbara's promise is not enforceable because the church did not give consideration.

Question 4

Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road. After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog. Marnie's promise is binding, because there is a bargained-for-exchange.

Accepted Answer

A) True 
 B)False

Question 5

An illusory promise has the form of a promise but imposes no real obligation.

Accepted Answer

A) True 
 B)False

Question 6

What transactions are enforceable even though they are not supported by consideration?

Accepted Answer

Such transactions would include: _promise_s_t_o_perfor_m_prio_r_unenforceabl_e_obligation_s_(promise_s_t_o_pa_y_debt_s_barred a. by

Question 7

An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following requires consideration in order to be binding upon the parties?

Accepted Answer

A)  A written promise by a merchant to keep an offer to buy goods open for 14 days 
B)  Material modification of a sale of goods contract under Article 2 of the UCC 
C)  Material alteration of a personal service contract 
D)  Settlement of a disputed debt 
A)  A written promise by a merchant to keep an offer to buy goods open for 14 days 
B)  Material modification of a sale of goods contract under Article 2 of the UCC 
C)  Material alteration of a personal service contract 
D)  Settlement of a disputed debt

Question 9

Consideration has only one basic element, which is a bargained-for exchange.

Accepted Answer

A) True 
 B)False

Question 10

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms and, under the common law, must be supported by mutual consideration to be enforceable.

Accepted Answer

A) True 
 B)False

Question 11

The adequacy of consideration, while not important to the existence of consideration, may be relevant to the availability of certain defenses or remedies.

Accepted Answer

A) True 
 B)False

Question 12

If a promise is illusory, mutuality of obligation is lacking.

Accepted Answer

A) True 
 B)False

Question 13

Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will. Janet has made:

Accepted Answer

A)  an illusory promise. 
B)  a legally sufficient promise unless Janet knew at the time she made the promise that she could not inherit the $1 million. 
C)  a conditional promise which is not sufficient to form consideration. 
D)  a legally inadequate promise, and the courts will therefore not enforce it. 
A)  an illusory promise. 
B)  a legally sufficient promise unless Janet knew at the time she made the promise that she could not inherit the $1 million. 
C)  a conditional promise which is not sufficient to form consideration. 
D)  a legally inadequate promise, and the courts will therefore not enforce it.

Question 14

The element of exchange is absent where a promise is given for an act that has already been done.

Accepted Answer

A) True 
 B)False

Question 15

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract?

Accepted Answer

A)  No, because Robbie gave no benefit to Aunt Ellie 
B)  No, because Robbie did not suffer any detriment 
C)  Yes, because stopping smoking will benefit Robbie's health 
D)  Yes, because Robbie gave up a legal right 
A)  No, because Robbie gave no benefit to Aunt Ellie 
B)  No, because Robbie did not suffer any detriment 
C)  Yes, because stopping smoking will benefit Robbie's health 
D)  Yes, because Robbie gave up a legal right

Question 16

In some states a promise under seal is binding without consideration.

Accepted Answer

A) True 
 B)False

Question 17

An agreement to sell the entire production of a particular plant to a particular purchaser is a requirements contract.

Accepted Answer

A) True 
 B)False

Question 18

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

Accepted Answer

A) True 
 B)False

Question 19

The requirement of legally sufficient consideration:

Accepted Answer

A)  is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor. 
B)  has nothing to do with the legal value of what is exchanged. 
C)  means the subject matter that the parties agree to exchange has to have the same value. 
D)  is the same as the requirement of adequacy of consideration. 
A)  is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor. 
B)  has nothing to do with the legal value of what is exchanged. 
C)  means the subject matter that the parties agree to exchange has to have the same value. 
D)  is the same as the requirement of adequacy of consideration.

Question 20

A unilateral contract may consist of a promise exchanged for an act or forbearance.

Accepted Answer

A) True 
 B)False

Exam 12: Consideration

According to the UCC, only a merchant can make a firm offer to a buyer.

Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road. After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog. Marnie's promise is binding, because there is a bargained-for-exchange.

An illusory promise has the form of a promise but imposes no real obligation.

What transactions are enforceable even though they are not supported by consideration?

An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.

Which of the following requires consideration in order to be binding upon the parties?

Consideration has only one basic element, which is a bargained-for exchange.

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms and, under the common law, must be supported by mutual consideration to be enforceable.

The adequacy of consideration, while not important to the existence of consideration, may be relevant to the availability of certain defenses or remedies.

If a promise is illusory, mutuality of obligation is lacking.

Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will. Janet has made:

The element of exchange is absent where a promise is given for an act that has already been done.

Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract?

In some states a promise under seal is binding without consideration.

An agreement to sell the entire production of a particular plant to a particular purchaser is a requirements contract.

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

The requirement of legally sufficient consideration:

A unilateral contract may consist of a promise exchanged for an act or forbearance.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property

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