Question 1

Under the doctrine of promissory estoppel,a promise will not be enforced unless it is supported by consideration.

Accepted Answer

A) True 
 B)False

Question 2

Promissory estoppel requires that justice will be better served by the enforcement of the promise.

Accepted Answer

A) True 
 B)False

Question 3

Martha is the sheriff of Junction,Texas. Alex robs a gas station on the edge of town and then evades capture. A $500 reward is offered for his capture. The following week,Martha captures Alex. Martha

Accepted Answer

A) can collect the $500 reward. 
B) cannot collect the $500 reward because she had a preexisting duty to catch Alex. 
C) cannot collect the $500 reward because it is not legally sufficient consideration. 
D) cannot collect the $500 reward because it would be unconscionable. 
A) can collect the $500 reward. 
B) cannot collect the $500 reward because she had a preexisting duty to catch Alex. 
C) cannot collect the $500 reward because it is not legally sufficient consideration. 
D) cannot collect the $500 reward because it would be unconscionable.

Question 4

A court will always enforce a promise,despite a lack of consideration.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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 12-4. 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 7

Fecund Farms files a suit against Grain Mill Corporation under the doctrine of prom-issory estoppel. Fecund Farmsmust show that

Accepted Answer

A) Fecund Farmsjustifiably refused to fulfill a promise to Grain Mill. 
B) Fecund Farmsjustifiably relied on Grain Mill'spromise to its detriment. 
C) Grain Milljustifiably refused to fulfill a promise to Fecund Farms. 
D) Grain Milljustifiably relied on Fecund Farms'spromise to its detriment. 
A) Fecund Farmsjustifiably refused to fulfill a promise to Grain Mill. 
B) Fecund Farmsjustifiably relied on Grain Mill'spromise to its detriment. 
C) Grain Milljustifiably refused to fulfill a promise to Fecund Farms. 
D) Grain Milljustifiably relied on Fecund Farms'spromise to its detriment.

Question 8

To be legally sufficient,consideration must be evidenced by something tangible.

Accepted Answer

A) True 
 B)False

Question 9

Centre City Properties,Inc.,owns and manages a warehouse. DIY Home Improvement Stores agrees to lease the warehouse for six years. Under the lease,DIY is obligated to pay all of the utility costs. Two years into the term,DIY asks Centre City to modify the lease to provide that the utility costs will be split equally between them. The landlord agrees,but later decides it does not want to share the costs and refuses to pay. Is Centre City bound to its agreement to share the utility costs? Why or why not?

Accepted Answer

Centre City Properties,Inc.,the landlord

Question 10

While sailboarding,Jolene is injured when Kilroy carelessly crosses her path. Kilroy's insurance company offers Jolene $50,000 to release Kilroy from liability,and she accepts. Later,she learns that her injuries are more serious than she realized. The release is

Accepted Answer

A) enforceable. 
B) unenforceable because Jolene's injuries are unforeseeably difficult. 
C) unenforceable because Kilroyhas a preexisting duty to pay. 
D) unenforceable because the release is an illusory promise. 
A) enforceable. 
B) unenforceable because Jolene's injuries are unforeseeably difficult. 
C) unenforceable because Kilroyhas a preexisting duty to pay. 
D) unenforceable because the release is an illusory promise.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Applied Methods Corporation promises to give stock options to Belden,a production designer,for processes he has already designed. This promise is

Accepted Answer

A) enforceable because it is a new contract. 
B) enforceable because it is an illusory promise. 
C) enforceable because it is supported by past consideration. 
D) unenforceable. 
A) enforceable because it is a new contract. 
B) enforceable because it is an illusory promise. 
C) enforceable because it is supported by past consideration. 
D) unenforceable.

Question 13

Sally contracts with Tasty Pizza Company to deliver its products. Both parties change their minds,however,and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 12-3. The next day,Sally changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal,but for a new price. Sally and Tasty

Accepted Answer

A) may agree to a new contract,but it cannot include a new price. 
B) may agree to a new contract that includes the new price. 
C) must perform their original contract. 
D) must perform the part of their contract that is executory. 
A) may agree to a new contract,but it cannot include a new price. 
B) may agree to a new contract that includes the new price. 
C) must perform their original contract. 
D) must perform the part of their contract that is executory.

Question 14

Rescission is the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made.

Accepted Answer

A) True 
 B)False

Question 15

Dean,the president of Billing & Credit Company,promises to pay his employee Ewing,who is dangerously obese,$10 for every pound that he loses within the next two years. Ewing agrees,diets and exercises,loses 154 pounds,and asks Dean for $1,540. Dean refuses to pay,say-ing that he does not remember the promise,but that even if he did make it,there was no consideration,and Ewing's improved health is a sufficient benefit for his effort and sacrifice. Ewing files a suit against Dean. In whose favor is the court likely to rule,and why?

Accepted Answer

A court is most likely to rule against D

Question 16

If a debt is unliquidated,an accord and satisfaction cannot take place.

Accepted Answer

A) True 
 B)False

Question 17

A release is an agreement in which one party gives up the right to pursue a legal claim against another party.

Accepted Answer

A) True 
 B)False

Question 18

William buys Liz'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 William's consideration

Accepted Answer

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

Question 19

Legal sufficiency of consideration is the same as adequacy of consideration.

Accepted Answer

A) True 
 B)False

Question 20

Brad 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 12-2.If,as Brad claims,the consideration in this problem is inadequate,it may indicate a lack of

Accepted Answer

A) accord in Brad's satisfaction with the value of the deal. 
B) voluntary consent. 
C) flexibility on the part of College Credit to accommodate Brad's needs. 
D) "heft," "substance," or "weight" in the terms of the contract. 
A) accord in Brad's satisfaction with the value of the deal. 
B) voluntary consent. 
C) flexibility on the part of College Credit to accommodate Brad's needs. 
D) "heft," "substance," or "weight" in the terms of the contract.

Exam 12: Consideration

Under the doctrine of promissory estoppel,a promise will not be enforced unless it is supported by consideration.

Promissory estoppel requires that justice will be better served by the enforcement of the promise.

Martha is the sheriff of Junction,Texas. Alex robs a gas station on the edge of town and then evades capture. A $500 reward is offered for his capture. The following week,Martha captures Alex. Martha

A court will always enforce a promise,despite a lack of consideration.

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.

Fecund Farms files a suit against Grain Mill Corporation under the doctrine of prom-issory estoppel. Fecund Farmsmust show that

To be legally sufficient,consideration must be evidenced by something tangible.

While sailboarding,Jolene is injured when Kilroy carelessly crosses her path. Kilroy's insurance company offers Jolene $50,000 to release Kilroy from liability,and she accepts. Later,she learns that her injuries are more serious than she realized. The release is

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

Applied Methods Corporation promises to give stock options to Belden,a production designer,for processes he has already designed. This promise is

Rescission is the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made.

If a debt is unliquidated,an accord and satisfaction cannot take place.

A release is an agreement in which one party gives up the right to pursue a legal claim against another party.

William buys Liz'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 William's consideration

Legal sufficiency of consideration is the same as adequacy of consideration.

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