Question 1

Which of the following is enforceable without new consideration?

Accepted Answer

A) Beth, after reaching the age of majority, promises to pay off a debt she incurred while a minor. 
B) Cheyenne entered a contract to buy a car based on a fraudulent misrepresentation.A new promise to pay is made without knowledge of the original fraud. 
C) Val entered a contract voidable because of mistake.A new promise to fulfill the contractual obligations that had not previously been avoided and without knowledge of the mistake is enforceable without new consideration. 
D) None of the above.New promises to perform voidable obligations that have not previously been avoided must always have new consideration. 
A) Beth, after reaching the age of majority, promises to pay off a debt she incurred while a minor. 
B) Cheyenne entered a contract to buy a car based on a fraudulent misrepresentation.A new promise to pay is made without knowledge of the original fraud. 
C) Val entered a contract voidable because of mistake.A new promise to fulfill the contractual obligations that had not previously been avoided and without knowledge of the mistake is enforceable without new consideration. 
D) None of the above.New promises to perform voidable obligations that have not previously been avoided must always have new consideration.

Question 2

The two basic elements to consideration are legal adequacy and a bargained-for exchange.

Accepted Answer

A) True 
 B)False

Question 3

In DiLorenzo v.Valve and Primer Corporation, the court held:

Accepted Answer

A) DiLorenzo gave consideration for the stock option. 
B) Valve & Primer conditioned the alleged stock option on DiLorenzo's promise to remain in its employment. 
C) promissory estoppel applied because there was detrimental reliance on DiLorenzo's part. 
D) there was no consideration for the stock option, and promissory estoppel did not apply because detrimental reliance was not proven. 
A) DiLorenzo gave consideration for the stock option. 
B) Valve & Primer conditioned the alleged stock option on DiLorenzo's promise to remain in its employment. 
C) promissory estoppel applied because there was detrimental reliance on DiLorenzo's part. 
D) there was no consideration for the stock option, and promissory estoppel did not apply because detrimental reliance was not proven.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 6

D owes C a past-due undisputed debt of $500.D sees C in a bar and pays him $400.C then says to D, "Forget about the other $100 you owe me.I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.

Accepted Answer

A) True 
 B)False

Question 7

A debt is disputed only if both the existence and amount are contested.

Accepted Answer

A) True 
 B)False

Question 8

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber.Several people are claiming to be entitled to the money.Which of them is eligible?

Accepted Answer

A) The employees of the bank. 
B) An on-duty sheriff's deputy in the county where the arrest occurred. 
C) An off-duty deputy sheriff from a county other than the one where the arrest occurred. 
D) None of the above are eligible. 
A) The employees of the bank. 
B) An on-duty sheriff's deputy in the county where the arrest occurred. 
C) An off-duty deputy sheriff from a county other than the one where the arrest occurred. 
D) None of the above are eligible.

Question 9

Sandy's private secretary promises not to disclose the contents of a letter she typed if Sandy will give her the next day off with pay.If the secretary takes the day off, Sandy does not have to pay her for the day.

Accepted Answer

A) True 
 B)False

Question 10

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.

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) Under the UCC, the substitute contract is binding, 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) Under the UCC, the substitute contract is binding, 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 11

In a unilateral contract, a promise is exchanged from one party to another for a promise to forbear to act.

Accepted Answer

A) True 
 B)False

Question 12

An agreement to sell the entire production of a particular plant is a requirements contract.

Accepted Answer

A) True 
 B)False

Question 13

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 14

The Restatement recognizes moral obligations as consideration.

Accepted Answer

A) True 
 B)False

Question 15

Wayne helped Hank study all night for an important exam.After Hank got an "A" on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it."

Accepted Answer

A) There is no contract because there is no mutual assent. 
B) There is no contract because there is no valid consideration. 
C) There is no contract because $10 is reasonably inadequate consideration. 
D) There is a contract with sufficient consideration. 
A) There is no contract because there is no mutual assent. 
B) There is no contract because there is no valid consideration. 
C) There is no contract because $10 is reasonably inadequate consideration. 
D) There is a contract with sufficient consideration.

Question 16

Exclusive dealing contracts are illegal and void.

Accepted Answer

A) True 
 B)False

Question 17

Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company.The exclusive franchise covers the entire State of Wisconsin for a period of three years.

Accepted Answer

A) The manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement. 
B) Roberto has an implied obligation to use his best efforts to promote the sale of the widgets. 
C) Under the UCC, such an agreement lacks consideration. 
D) Two of the above, (a) and (b). 
A) The manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement. 
B) Roberto has an implied obligation to use his best efforts to promote the sale of the widgets. 
C) Under the UCC, such an agreement lacks consideration. 
D) Two of the above, (a) and (b).

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The UCC provides that a contract for the sale of goods can be effectively modified without new consideration, provided the modification is made in good faith and both parties intend to modify the contract.

Accepted Answer

A) True 
 B)False

Question 20

Define legal detriment.

Accepted Answer

Legal detriment means (a) the doing of (

Exam 12: Consideration

Which of the following is enforceable without new consideration?

The two basic elements to consideration are legal adequacy and a bargained-for exchange.

In DiLorenzo v.Valve and Primer Corporation, the court held:

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

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.

D owes C a past-due undisputed debt of $500.D sees C in a bar and pays him $400.C then says to D, "Forget about the other $100 you owe me.I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.

A debt is disputed only if both the existence and amount are contested.

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber.Several people are claiming to be entitled to the money.Which of them is eligible?

Sandy's private secretary promises not to disclose the contents of a letter she typed if Sandy will give her the next day off with pay.If the secretary takes the day off, Sandy does not have to pay her for the day.

In a unilateral contract, a promise is exchanged from one party to another for a promise to forbear to act.

An agreement to sell the entire production of a particular plant is a requirements contract.

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.

The Restatement recognizes moral obligations as consideration.

Wayne helped Hank study all night for an important exam.After Hank got an "A" on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it."

Exclusive dealing contracts are illegal and void.

Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company.The exclusive franchise covers the entire State of Wisconsin for a period of three years.

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

The UCC provides that a contract for the sale of goods can be effectively modified without new consideration, provided the modification is made in good faith and both parties intend to modify the contract.

Define legal detriment.

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

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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