Question 1

A covenant not to sue is against public policy.

Accepted Answer

A) True 
 B)False

Question 2

Performance can constitute the consideration that creates a contractual obligation.

Accepted Answer

A) True 
 B)False

Question 3

Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable

Accepted Answer

A)  ​because it is a new contract. 
B)  ​because it is an illusory promise. 
C)  ​because it is supported by past consideration. 
D)  ​under no circumstances. 
A)  ​because it is a new contract. 
B)  ​because it is an illusory promise. 
C)  ​because it is supported by past consideration. 
D)  ​under no circumstances.

Question 4

Fact Pattern 13-2​
Boyd defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 13-2. "Adequacy" of consideration refers to

Accepted Answer

A)  ​"how much" consideration is given. 
B)  ​legally sufficient value in the eyes of the law. 
C)  ​the intangible value to a contracting party of a thing exchanged. 
D)  ​the substantiality of the consideration exchanged. 
A)  ​"how much" consideration is given. 
B)  ​legally sufficient value in the eyes of the law. 
C)  ​the intangible value to a contracting party of a thing exchanged. 
D)  ​the substantiality of the consideration exchanged.

Question 5

A promise made in return for an act or event that has not yet taken place can be fully enforceable.

Accepted Answer

A) True 
 B)False

Question 6

Carly pledges to donate $10,000 to Disaster Recovery Inc. (DRI). On the basis of the pledge, DRI orders additional supplies. If Carly does not fulfill the pledge, a court may enforce it

Accepted Answer

A)  ​under the preexisting duty rule. 
B)  ​on the basis of unforeseen difficulties. 
C)  ​as an illusory promise. 
D)  ​under the doctrine of promissory estoppel. 
A)  ​under the preexisting duty rule. 
B)  ​on the basis of unforeseen difficulties. 
C)  ​as an illusory promise. 
D)  ​under the doctrine of promissory estoppel.

Question 7

Fact Pattern 13-1
Sports Bar & Grill and Tea & Tarts Bakery are adjacent businesses with adjoining parking lots. Sports Bar offers Tea & Tarts a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot.
-Refer to Fact Pattern 13-1. Tea & Tarts's forbearance from towing is legally sufficient consideration

Accepted Answer

A)  ​because it is a promise of something of value. 
B)  ​only if Sports Bar's patrons park in Tea & Tarts's lot. 
C)  ​only if Tea & Tarts's customers cannot park in its lot because it is full. 
D)  ​under no circumstances. 
A)  ​because it is a promise of something of value. 
B)  ​only if Sports Bar's patrons park in Tea & Tarts's lot. 
C)  ​only if Tea & Tarts's customers cannot park in its lot because it is full. 
D)  ​under no circumstances.

Question 8

A transaction that lacks a bargained-for exchange lacks an element of consideration.

Accepted Answer

A) True 
 B)False

Question 9

A contract that one party retains the exclusive right to cancel at any time is unenforceable.

Accepted Answer

A) True 
 B)False

Question 10

​Fact Pattern 13-4
Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 13-4. If Teatro offers no reason for the extra $250,000, but says only that it will stop work if it is not paid, the agreement is

Accepted Answer

A)  ​enforceable as the consideration is past. 
B)  ​enforceable because of unforeseen difficulties. 
C)  ​unenforceable as an illusory promise. 
D)  ​unenforceable due to the preexisting duty rule. 
A)  ​enforceable as the consideration is past. 
B)  ​enforceable because of unforeseen difficulties. 
C)  ​unenforceable as an illusory promise. 
D)  ​unenforceable due to the preexisting duty rule.

Question 11

Twyla's dock is damaged in an accident caused by Ulrich's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulrich fails to pay, Twyla can bring an action for breach of contract. This is

Accepted Answer

A)  ​a covenant not to sue. 
B)  ​an illusory promise. 
C)  ​an unforeseen difficulty. 
D)  ​a release. 
A)  ​a covenant not to sue. 
B)  ​an illusory promise. 
C)  ​an unforeseen difficulty. 
D)  ​a release.

Question 12

If, during the performance of a contract, extraordinary difficulties arise that were totally unforeseen at the time the contract was formed, a court may allow an exception to the preexisting duty rule.

Accepted Answer

A) True 
 B)False

Question 13

Maria is the sheriff of Narez, Texas. Oscar robs a Narez gas station and a $500 reward is offered for his capture. When, later, Maria finds and arrests him, with respect to the reward, she can

Accepted Answer

A)  ​collect it. 
B)  ​not collect it because she had a preexisting duty to capture Oscar. 
C)  ​not collect it because it is not legally sufficient consideration. 
D)  ​not collect it because it would be unconscionable. 
A)  ​collect it. 
B)  ​not collect it because she had a preexisting duty to capture Oscar. 
C)  ​not collect it because it is not legally sufficient consideration. 
D)  ​not collect it because it would be unconscionable.

Question 14

An illusory promise is an unenforceable promise.

Accepted Answer

A) True 
 B)False

Question 15

Two parties can mutually agree to rescind a contract unless it is executory.

Accepted Answer

A) True 
 B)False

Question 16

Kent buys Lizzie's house for $100,000, which is the fair market value of the house. If the contract is later disputed in court, the court is likely to declare Kent's consideration

Accepted Answer

A)  ​inadequate. 
B)  ​past. 
C)  ​legally sufficient. 
D)  ​illusory. 
A)  ​inadequate. 
B)  ​past. 
C)  ​legally sufficient. 
D)  ​illusory.

Question 17

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

Accepted Answer

A)  ​liable to Niki under the concept of rescission and new contract. 
B)  ​liable to Niki under the doctrine of promissory estoppel. 
C)  ​liable to Niki under the preexisting duty rule. 
D)  ​not liable to Niki. 
A)  ​liable to Niki under the concept of rescission and new contract. 
B)  ​liable to Niki under the doctrine of promissory estoppel. 
C)  ​liable to Niki under the preexisting duty rule. 
D)  ​not liable to Niki.

Question 18

If a promise is made, it will be enforced.

Accepted Answer

A) True 
 B)False

Question 19

Fact Pattern 13-2​
Boyd defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 13-2. A court is most likely to evaluate the adequacy of consideration if

Accepted Answer

A)  ​a thing exchanged has no intangible value to one of the parties. 
B)  ​something exchanged is not of direct economic or financial value. 
C)  ​the items exchanged were of unequal value. 
D)  ​there is a gross disparity in the value of the consideration exchanged. 
A)  ​a thing exchanged has no intangible value to one of the parties. 
B)  ​something exchanged is not of direct economic or financial value. 
C)  ​the items exchanged were of unequal value. 
D)  ​there is a gross disparity in the value of the consideration exchanged.

Question 20

Legally sufficient consideration is something of value in the eyes of the law.

Accepted Answer

A) True 
 B)False

Exam 13: Consideration

A covenant not to sue is against public policy.

Performance can constitute the consideration that creates a contractual obligation.

Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable

A promise made in return for an act or event that has not yet taken place can be fully enforceable.

Carly pledges to donate $10,000 to Disaster Recovery Inc. (DRI). On the basis of the pledge, DRI orders additional supplies. If Carly does not fulfill the pledge, a court may enforce it

A transaction that lacks a bargained-for exchange lacks an element of consideration.

A contract that one party retains the exclusive right to cancel at any time is unenforceable.

Twyla's dock is damaged in an accident caused by Ulrich's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulrich fails to pay, Twyla can bring an action for breach of contract. This is

If, during the performance of a contract, extraordinary difficulties arise that were totally unforeseen at the time the contract was formed, a court may allow an exception to the preexisting duty rule.

Maria is the sheriff of Narez, Texas. Oscar robs a Narez gas station and a $500 reward is offered for his capture. When, later, Maria finds and arrests him, with respect to the reward, she can

An illusory promise is an unenforceable promise.

Two parties can mutually agree to rescind a contract unless it is executory.

Kent buys Lizzie's house for $100,000, which is the fair market value of the house. If the contract is later disputed in court, the court is likely to declare Kent's consideration

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

If a promise is made, it will be enforced.

Legally sufficient consideration is something of value in the eyes of the law.

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