Question 1

Under the common law, a modification of a preexisting contract must be supported by mutual consideration; under the Code, a contract can be modified without new consideration.

Accepted Answer

A) True 
 B)False

Question 2

In a bilateral contract, if one party is not bound, neither party is bound.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The Restatement recognizes moral obligations as consideration.

Accepted Answer

A) True 
 B)False

Question 5

Orwin, owner of a used furniture store, gives Maggie a signed offer to buy her living room furniture for $800. This offer:

Accepted Answer

A)  is revocable at any time because no consideration was given. 
B)  would have been irrevocable if Orwin were a merchant, but he would not be considered a merchant under the UCC. 
C)  is irrevocable for a reasonable time, not to exceed three months, even if there was no consideration. 
D)  is revocable without consideration because it is an offer to buy rather than to sell. 
A)  is revocable at any time because no consideration was given. 
B)  would have been irrevocable if Orwin were a merchant, but he would not be considered a merchant under the UCC. 
C)  is irrevocable for a reasonable time, not to exceed three months, even if there was no consideration. 
D)  is revocable without consideration because it is an offer to buy rather than to sell.

Question 6

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 7

Andrew agrees to paint Rosalene's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job, unless Rosalene agrees to pay him $100 more. What principle applies to this fact situation?

Accepted Answer

A)  The acceptance of additional money to settle a disputed claim is supported by consideration. 
B)  A past obligation is sufficient consideration for a new promise. 
C)  Andrew was already obligated to paint the house. He gives no additional consideration in return for Rosalene's promise to pay more money. 
D)  Rosalene has made a promise in exchange for a forbearance. 
A)  The acceptance of additional money to settle a disputed claim is supported by consideration. 
B)  A past obligation is sufficient consideration for a new promise. 
C)  Andrew was already obligated to paint the house. He gives no additional consideration in return for Rosalene's promise to pay more money. 
D)  Rosalene has made a promise in exchange for a forbearance.

Question 8

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms.

Accepted Answer

A) True 
 B)False

Question 9

In the case of Denney v. Reppert the court allowed the employees of a bank to collect a reward, because they supplied information that led to the arrest and conviction of a bank robber.

Accepted Answer

A) True 
 B)False

Question 10

Abbey helped Greyson study for an important exam for about 8 hours. After Greyson got an "A" on the exam, he told Abbey , "I will give you $25 for helping me get a good grade." Abbey said, "Thanks, I'll take it." There is:

Accepted Answer

A)  no contract because there is no mutual assent. 
B)  no contract because there is no valid consideration. 
C)  no contract because $25 is not adequate consideration for 8 hours work. 
D)  a contract with sufficient consideration. 
A)  no contract because there is no mutual assent. 
B)  no contract because there is no valid consideration. 
C)  no contract because $25 is not adequate consideration for 8 hours work. 
D)  a contract with sufficient consideration.

Question 11

a. How does Article 2 of the UCC modify the common law of contracts with regard to consideration? 
b. Explain how output and requirements contracts differ from illusory promises.

Accepted Answer

a. Article 2 of the UCC states that the

Question 12

Consideration is the inducement to make a promise enforceable.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Bob promises to sell to Candy an automobile for $20,000, for which Candy promises $20,000. A unilateral contract exists.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Define a substituted contract and explain how it affects an agreement.

Accepted Answer

A substituted contract results when the

Question 17

Barbara, a wealthy widow, promises the pastor of her church that she will donate $30,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $60,000 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)  Barbara's promise to pay $30,000 is enforceable because it was a promise made to satisfy a preexisting moral obligation. 
B)  the promise to pay $30,000 is a promise to give a gift and is therefore not enforceable. 
C)  under the Restatement of Contracts, Barbara's promise is enforceable. 
D)  Barbara's promise is enforceable only if she put it in writing. 
A)  Barbara's promise to pay $30,000 is enforceable because it was a promise made to satisfy a preexisting moral obligation. 
B)  the promise to pay $30,000 is a promise to give a gift and is therefore not enforceable. 
C)  under the Restatement of Contracts, Barbara's promise is enforceable. 
D)  Barbara's promise is enforceable only if she put it in writing.

Question 18

Andrew agreed to exchange something clearly without value to enter a contract with Milt. The contract will likely fail for lack of consideration because many courts would consider this a sham.

Accepted Answer

A) True 
 B)False

Question 19

Under the common law, payment of a lesser sum of money than is owed in consideration of a promise to discharge a fully matured, undisputed debt is legally sufficient to support the promise of discharge.

Accepted Answer

A) True 
 B)False

Question 20

An illusory promise is consideration for a return promise.

Accepted Answer

A) True 
 B)False

Exam 12: Consideration

Under the common law, a modification of a preexisting contract must be supported by mutual consideration; under the Code, a contract can be modified without new consideration.

In a bilateral contract, if one party is not bound, neither party is bound.

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

The Restatement recognizes moral obligations as consideration.

Orwin, owner of a used furniture store, gives Maggie a signed offer to buy her living room furniture for $800. This offer:

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.

Andrew agrees to paint Rosalene's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job, unless Rosalene agrees to pay him $100 more. What principle applies to this fact situation?

A modification of a preexisting contract occurs when the parties agree to change one or more of its terms.

In the case of Denney v. Reppert the court allowed the employees of a bank to collect a reward, because they supplied information that led to the arrest and conviction of a bank robber.

Abbey helped Greyson study for an important exam for about 8 hours. After Greyson got an "A" on the exam, he told Abbey , "I will give you $25 for helping me get a good grade." Abbey said, "Thanks, I'll take it." There is:

a. How does Article 2 of the UCC modify the common law of contracts with regard to consideration? b. Explain how output and requirements contracts differ from illusory promises.

Consideration is the inducement to make a promise enforceable.

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

Bob promises to sell to Candy an automobile for $20,000, for which Candy promises $20,000. A unilateral contract exists.

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:

Define a substituted contract and explain how it affects an agreement.

Andrew agreed to exchange something clearly without value to enter a contract with Milt. The contract will likely fail for lack of consideration because many courts would consider this a sham.

Under the common law, payment of a lesser sum of money than is owed in consideration of a promise to discharge a fully matured, undisputed debt is legally sufficient to support the promise of discharge.

An illusory promise is consideration for a return promise.

Introduction to Law

Business Ethics

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

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

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 Wills

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