Question 1

An illusory promise creates a bilateral contract.

Accepted Answer

A) True 
 B)False

Question 2

If a merchant receives and cashes a check for partial payment of a debt and the check bears the notation that the amount is in full payment of a disputed sum, the total debt is released.

Accepted Answer

A) True 
 B)False

Question 3

Consideration is not required in:

Accepted Answer

A)  contracts for the sale of goods. 
B)  employment contracts. 
C)  agreements to modify employment contracts. 
D)  agreements to modify contracts for the sale of goods. 
A)  contracts for the sale of goods. 
B)  employment contracts. 
C)  agreements to modify employment contracts. 
D)  agreements to modify contracts for the sale of goods.

Question 4

The doctrine of promissory estoppel is also known as the doctrine of beneficial reliance.

Accepted Answer

A) True 
 B)False

Question 5

Sara Student wished to pay off her $5,000 student loan. If she sends in a check for $3,000 and the creditor cashes the check, the debt will be fully satisfied provided the check is marked "paid in full."

Accepted Answer

A) True 
 B)False

Question 6

Charitable pledges or subscriptions are binding on the donor if the donor knew the charity would rely on the pledge.

Accepted Answer

A) True 
 B)False

Question 7

Damages recoverable in a case of promissory estoppel are determined by the profits that the promisee expected.

Accepted Answer

A) True 
 B)False

Question 8

Courts will consider the adequacy of the consideration when:

Accepted Answer

A)  one party clearly has the better side of the deal. 
B)  one party has more business experience than the other. 
C)  one party claims to have been defrauded. 
D)  one party shows a much lower price nationally-advertised on television. 
A)  one party clearly has the better side of the deal. 
B)  one party has more business experience than the other. 
C)  one party claims to have been defrauded. 
D)  one party shows a much lower price nationally-advertised on television.

Question 9

None of the following can be legal consideration except:

Accepted Answer

A)  Refraining from beating one's spouse. 
B)  Promising to refrain from beating one's spouse. 
C)  Refraining from smoking cigarettes. 
D)  Refraining from using cocaine. 
A)  Refraining from beating one's spouse. 
B)  Promising to refrain from beating one's spouse. 
C)  Refraining from smoking cigarettes. 
D)  Refraining from using cocaine.

Question 10

Promissory estoppel does NOT require

Accepted Answer

A)  a signed writing explaining the promise. 
B)  a clear and definite promise 
C)  that justice be better served by enforcement of a promise 
D)  that a promisee has justifiably relied on the promise 
A)  a signed writing explaining the promise. 
B)  a clear and definite promise 
C)  that justice be better served by enforcement of a promise 
D)  that a promisee has justifiably relied on the promise

Question 11

From a(n) _______ approach, consideration is defined as a detriment incurred by the promisee.

Accepted Answer

A)  charitable subscription. 
B)  promissory estoppel. 
C)  benefit-detriment. 
D)  bargained-for-exchange. 
A)  charitable subscription. 
B)  promissory estoppel. 
C)  benefit-detriment. 
D)  bargained-for-exchange.

Question 12

True consideration occurs only when the value of one promise is equal to the value of the promise given by the other party.

Accepted Answer

A) True 
 B)False

Question 13

Liz agrees to cook 20 dinners for Brian, and in exchange, Brian will repair all of the plumbing in Liz's house. Liz and Brian's 'deal' has:

Accepted Answer

A)  insufficient consideration, because cooking twenty dinners is not worth as much as repairing all of the plumbing in Liz's house. 
B)  insufficient consideration, because this kind of bargain is against public policy. 
C)  insufficient consideration, because there is a clear lack of any bargain. 
D)  sufficient consideration, because Liz has promised something of value. 
A)  insufficient consideration, because cooking twenty dinners is not worth as much as repairing all of the plumbing in Liz's house. 
B)  insufficient consideration, because this kind of bargain is against public policy. 
C)  insufficient consideration, because there is a clear lack of any bargain. 
D)  sufficient consideration, because Liz has promised something of value.

Question 14

A promise to make a gift is enforceable.

Accepted Answer

A) True 
 B)False

Question 15

With regard to an unliquidated debt, payment by the debtor of less than the amount claimed by the creditor is consideration for the latter's agreement to release or settle the claim.

Accepted Answer

A) True 
 B)False

Question 16

Gerwin's daughter Mary was seeking a position as an associate attorney with Baker, Charles & Dixon, a large metropolitan law firm. The firm, after several meetings with Mary over a two-month period, made Mary an offer of employment on January 15. Mary accepted the offer that day and immediately left for Cape Cod to celebrate without telling Gerwin or anyone else about her new job.?On January 17, two days after Mary had accepted the offer, Gerwin sent Baker, Charles & Dixon a letter in which she offered to give Baker all of her legal business (approximately $40,000 per year) if the law firm would hire Mary. The law firm accepted.?After Gerwin learned that Mary already had been hired by Baker, Charles & Dixon, Gerwin refused to transfer her business to the law firm. The law firm has brought suit against Gerwin on the grounds that a valid contract exists between them. How will the case be decided?

Accepted Answer

Judgment will be for Gerwin. A binding c

Question 17

Consideration is:

Accepted Answer

A)  the concern shown by the other contracting party. 
B)  what is demanded by the promisor as the price for the promise. 
C)  a stated number of dollars. 
D)  the concern of both contracting parties for the protection of the environment. 
A)  the concern shown by the other contracting party. 
B)  what is demanded by the promisor as the price for the promise. 
C)  a stated number of dollars. 
D)  the concern of both contracting parties for the protection of the environment.

Question 18

A contract in which one party agrees to purchase goods from another contingent upon the purchaser's ability to locate suitable financing is said to:

Accepted Answer

A)  be illegal. 
B)  result from undue influence. 
C)  contain a waiver. 
D)  contain a conditional promise. 
A)  be illegal. 
B)  result from undue influence. 
C)  contain a waiver. 
D)  contain a conditional promise.

Question 19

One promise may serve as consideration for many return promises.

Accepted Answer

A) True 
 B)False

Question 20

A(n) _______ is a promise that depends on the occurrence of a specified condition in order for the promise to be binding.

Accepted Answer

A)  cancellation provision. 
B)  preexisting legal obligation. 
C)  conditional promise. 
D)  good-faith adjustment. 
A)  cancellation provision. 
B)  preexisting legal obligation. 
C)  conditional promise. 
D)  good-faith adjustment.

Exam 14: Consideration

An illusory promise creates a bilateral contract.

If a merchant receives and cashes a check for partial payment of a debt and the check bears the notation that the amount is in full payment of a disputed sum, the total debt is released.

Consideration is not required in:

The doctrine of promissory estoppel is also known as the doctrine of beneficial reliance.

Sara Student wished to pay off her $5,000 student loan. If she sends in a check for $3,000 and the creditor cashes the check, the debt will be fully satisfied provided the check is marked "paid in full."

Charitable pledges or subscriptions are binding on the donor if the donor knew the charity would rely on the pledge.

Damages recoverable in a case of promissory estoppel are determined by the profits that the promisee expected.

Courts will consider the adequacy of the consideration when:

None of the following can be legal consideration except:

Promissory estoppel does NOT require

From a(n) _______ approach, consideration is defined as a detriment incurred by the promisee.

True consideration occurs only when the value of one promise is equal to the value of the promise given by the other party.

Liz agrees to cook 20 dinners for Brian, and in exchange, Brian will repair all of the plumbing in Liz's house. Liz and Brian's 'deal' has:

A promise to make a gift is enforceable.

With regard to an unliquidated debt, payment by the debtor of less than the amount claimed by the creditor is consideration for the latter's agreement to release or settle the claim.

Consideration is:

A contract in which one party agrees to purchase goods from another contingent upon the purchaser's ability to locate suitable financing is said to:

One promise may serve as consideration for many return promises.

A(n) _______ is a promise that depends on the occurrence of a specified condition in order for the promise to be binding.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters