Question 1

Define legal detriment.

Accepted Answer

Legal detriment means (1) doing (or unde

Question 2

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The central idea behind consideration is that the parties have intentionally entered into a bargained-for exchange with one another and have given each other something in exchange for a promise or performance.

Accepted Answer

A) True 
 B)False

Question 5

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

Accepted Answer

A) True 
 B)False

Question 6

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

Accepted Answer

A) True 
 B)False

Question 7

William agrees to drill a well up to 200 feet deep for John's rural cabin.The contract price is $3,000.After drilling 100 feet, William strikes solid granite rock.He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract.He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price.Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job.However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount.In this case:

Accepted Answer

A) the parties have agreed to a substitute contract which discharges the original contract.John is obligated to pay the additional $1,000. 
B) the substitute contract is binding under the UCC because there is the payment of additional money. 
C) William is in breach of contract.John need not pay any additional money. 
D) William is under a pre-existing moral duty to perform at the originally agreed-upon price. 
A) the parties have agreed to a substitute contract which discharges the original contract.John is obligated to pay the additional $1,000. 
B) the substitute contract is binding under the UCC because there is the payment of additional money. 
C) William is in breach of contract.John need not pay any additional money. 
D) William is under a pre-existing moral duty to perform at the originally agreed-upon price.

Question 8

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated.She expects to know for sure how much she will receive within a week or so.In this case:

Accepted Answer

A) this is an illusory contract, because Darla doesn't know whether she will receive the money for sure. 
B) the consideration of the promise of $6,000 is insufficient because it is subject to a condition. 
C) Darla's conditional promise is sufficient consideration unless Darla knows she cannot receive at least $6,000 from her uncle's estate. 
D) There is no consideration. 
A) this is an illusory contract, because Darla doesn't know whether she will receive the money for sure. 
B) the consideration of the promise of $6,000 is insufficient because it is subject to a condition. 
C) Darla's conditional promise is sufficient consideration unless Darla knows she cannot receive at least $6,000 from her uncle's estate. 
D) There is no consideration.

Question 9

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

Mary agrees to sew Georgia's prom dress for $50 plus costs.Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60.When Mary finishes the dress (with ruffles), Georgia must pay:

Accepted Answer

A) $50, since that is the original agreement. 
B) $50, since a modification must be in writing. 
C) $60, since the modified agreement is supported by additional consideration. 
D) $60, since any subsequent agreement is enforceable. 
A) $50, since that is the original agreement. 
B) $50, since a modification must be in writing. 
C) $60, since the modified agreement is supported by additional consideration. 
D) $60, since any subsequent agreement is enforceable.

Question 12

In which of the following situations will a smaller sum be unable to discharge a larger debt?

Accepted Answer

A) If the smaller sum is paid before the due date of the larger debt. 
B) If an additional article or service is given together with the payment of the smaller sum. 
C) If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency. 
D) A smaller sum is never able to discharge a larger debt. 
A) If the smaller sum is paid before the due date of the larger debt. 
B) If an additional article or service is given together with the payment of the smaller sum. 
C) If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency. 
D) A smaller sum is never able to discharge a larger debt.

Question 13

The Code has changed the common law rule regarding modification of a preexisting contract by providing that a contract for the sale of goods can be effectively modified by the parties without new consideration, provided they intend to do so and act in good faith.

Accepted Answer

A) True 
 B)False

Question 14

Define consideration.

Accepted Answer

Consideration is the inducement for a pr

Question 15

In most states, a contract under seal is binding without consideration.

Accepted Answer

A) True 
 B)False

Question 16

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 17

A promise to pay $1,000 a year to a local police officer to not have your store vandalized is legally unenforceable under the rule that makes performance of a pre-existing legal obligation legally insufficient consideration.

Accepted Answer

A) True 
 B)False

Question 18

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

Accepted Answer

A) True 
 B)False

Question 19

The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.

Accepted Answer

A) True 
 B)False

Question 20

The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production.After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.

Accepted Answer

A) True 
 B)False

Exam 12: Consideration

Define legal detriment.

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

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

The central idea behind consideration is that the parties have intentionally entered into a bargained-for exchange with one another and have given each other something in exchange for a promise or performance.

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated.She expects to know for sure how much she will receive within a week or so.In this case:

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

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

Mary agrees to sew Georgia's prom dress for $50 plus costs.Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60.When Mary finishes the dress (with ruffles), Georgia must pay:

In which of the following situations will a smaller sum be unable to discharge a larger debt?

The Code has changed the common law rule regarding modification of a preexisting contract by providing that a contract for the sale of goods can be effectively modified by the parties without new consideration, provided they intend to do so and act in good faith.

Define consideration.

In most states, a contract under seal is binding without consideration.

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?

A promise to pay $1,000 a year to a local police officer to not have your store vandalized is legally unenforceable under the rule that makes performance of a pre-existing legal obligation legally insufficient consideration.

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.

The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production.After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.

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

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.

Filters