Question 1

An accord and satisfaction prevents a creditor from maintaining an action to recover the remainder of the debt that he alleges is due.

Accepted Answer

A) True 
 B)False

Question 2

Sigmund enters into a contract with Carl.The terms are that Sigmund will purchase all the gasoline that he wants to purchase in 2011 at a price of $2.50 per gallon,and Carl agrees to sell on those terms.This is an example of a(n):

Accepted Answer

A) valid contract. 
B) illusory contract. 
C) voidable contract. 
D) implied contract. 
A) valid contract. 
B) illusory contract. 
C) voidable contract. 
D) implied contract.

Question 3

Which of the following is adequate consideration?

Accepted Answer

A) A preexisting duty 
B) Agreement to settle an unliquidated debt 
C) A preexisting moral obligation 
D) Nominal consideration 
A) A preexisting duty 
B) Agreement to settle an unliquidated debt 
C) A preexisting moral obligation 
D) Nominal consideration

Question 4

John promised the other co-owners of the ship Sea Fairy that he would insure the ship for an upcoming voyage.However,John fails to insure the ship.The ship is shipwrecked in a turbulent sea.The co-owners sue John for breach of contract.Will they succeed?

Accepted Answer

A) Yes,because there was a valid and binding contract between the co-owners. 
B) No,because it was a purely gratuitous promise. 
C) No,because an intervening cause absolved John's liability. 
D) Yes,because of promissory estoppel. 
A) Yes,because there was a valid and binding contract between the co-owners. 
B) No,because it was a purely gratuitous promise. 
C) No,because an intervening cause absolved John's liability. 
D) Yes,because of promissory estoppel.

Question 5

Which of the following is an element of promissory estoppel?

Accepted Answer

A) The promisee should reasonably expect to induce reliance 
B) Reliance on the promise by the promisor 
C) A promise to pay liquidated debts 
D) Injustice to the promisee as a result of reliance 
A) The promisee should reasonably expect to induce reliance 
B) Reliance on the promise by the promisor 
C) A promise to pay liquidated debts 
D) Injustice to the promisee as a result of reliance

Question 6

A promise to perform a preexisting duty is not consideration because the promise is essentially:

Accepted Answer

A) void. 
B) voidable. 
C) implied. 
D) gratuitous. 
A) void. 
B) voidable. 
C) implied. 
D) gratuitous.

Question 7

Henry agrees to give Beth $100 in exchange for her $50.Which of the following statements is true?

Accepted Answer

A) The agreement violates the parties' freedom of contract. 
B) The agreement is supported by nominal consideration. 
C) The inadequacy of consideration is apparent on the face of the agreement. 
D) The consideration is insufficient because it is based on past performance. 
A) The agreement violates the parties' freedom of contract. 
B) The agreement is supported by nominal consideration. 
C) The inadequacy of consideration is apparent on the face of the agreement. 
D) The consideration is insufficient because it is based on past performance.

Question 8

Consideration is what distinguishes enforceable agreements from gratuitous promises.

Accepted Answer

A) True 
 B)False

Question 9

Mr.Green agrees to an offer to drive Ms.White to the airport for $20,but "only if I feel like it".Mr.Green has failed to give sufficient consideration to create a contract with Ms.White.

Accepted Answer

A) True 
 B)False

Question 10

A contract in which one party to the agreement agrees to buy all of the other party's production of a particular commodity is called a requirements contract.

Accepted Answer

A) True 
 B)False

Question 11

Promissory estoppel cannot be applied in the case of the absence of a binding consideration.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following meets the requirements of consideration?

Accepted Answer

A) A promise not to engage in a crime or tort 
B) A promise without a binding obligation 
C) A promise that involves the exchange of a legal value 
D) A promise to do a preexisting duty 
A) A promise not to engage in a crime or tort 
B) A promise without a binding obligation 
C) A promise that involves the exchange of a legal value 
D) A promise to do a preexisting duty

Question 13

Which of the following statements about output contracts is false?

Accepted Answer

A) Output contracts are generally illusory because they fail to specify a quantity of goods to be produced or purchased. 
B) A party's quantity needs must be made in good faith. 
C) A party's quantity needs cannot be unreasonably disproportionate to any normal prior output. 
D) A party may not use an output contract to exploit the other party. 
A) Output contracts are generally illusory because they fail to specify a quantity of goods to be produced or purchased. 
B) A party's quantity needs must be made in good faith. 
C) A party's quantity needs cannot be unreasonably disproportionate to any normal prior output. 
D) A party may not use an output contract to exploit the other party.

Question 14

In a(n)________ contract,the distributor must use her best efforts to sell the goods and the manufacturer must use his best efforts to supply the goods.

Accepted Answer

A) requirements 
B) output 
C) implied 
D) exclusive dealing 
A) requirements 
B) output 
C) implied 
D) exclusive dealing

Question 15

Which of the following is often used by agreements that try to make gratuitous promises look like true bargains?

Accepted Answer

A) Nominal consideration 
B) Past consideration 
C) Composition agreement 
D) Requirements contract 
A) Nominal consideration 
B) Past consideration 
C) Composition agreement 
D) Requirements contract

Question 16

Historically,free promises were not enforced unless they had which of the following supporting them?

Accepted Answer

A) Witnesses of good character 
B) A signed statement of the Secretary of State 
C) Consideration 
D) Affidavits of profit attached to the promise 
A) Witnesses of good character 
B) A signed statement of the Secretary of State 
C) Consideration 
D) Affidavits of profit attached to the promise

Question 17

As discussed in the case in the text,McLellan v.Charly,promissory estoppel:

Accepted Answer

A) applies only when the promisee relied on the promise,even if the reliance was not reasonably expected. 
B) is used as a consideration substitute. 
C) is used when there was consideration that was later destroyed. 
D) applies whether or not the promisee relied on the promise. 
A) applies only when the promisee relied on the promise,even if the reliance was not reasonably expected. 
B) is used as a consideration substitute. 
C) is used when there was consideration that was later destroyed. 
D) applies whether or not the promisee relied on the promise.

Question 18

A creditor who fails to file suit to collect a debt within the time prescribed by the appropriate statute of limitations loses the right to collect it.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is an exception to a consideration requirement?

Accepted Answer

A) Bargained-for exchange 
B) Charitable subscription 
C) Nominal consideration 
D) Adequacy of consideration 
A) Bargained-for exchange 
B) Charitable subscription 
C) Nominal consideration 
D) Adequacy of consideration

Question 20

Patricia is a general contractor performing construction work for ABC Corp.Patricia requested extra payment because abnormal subsurface rock formations made excavation on the construction site far more costly and time-consuming than could have been reasonably expected.The court will:

Accepted Answer

A) enforce such modifications in contract. 
B) allow the party to rescind such a contract. 
C) consider the contract voidable. 
D) consider the contract unenforceable. 
A) enforce such modifications in contract. 
B) allow the party to rescind such a contract. 
C) consider the contract voidable. 
D) consider the contract unenforceable.

Exam 12: Consideration

An accord and satisfaction prevents a creditor from maintaining an action to recover the remainder of the debt that he alleges is due.

Sigmund enters into a contract with Carl.The terms are that Sigmund will purchase all the gasoline that he wants to purchase in 2011 at a price of $2.50 per gallon,and Carl agrees to sell on those terms.This is an example of a(n):

Which of the following is adequate consideration?

John promised the other co-owners of the ship Sea Fairy that he would insure the ship for an upcoming voyage.However,John fails to insure the ship.The ship is shipwrecked in a turbulent sea.The co-owners sue John for breach of contract.Will they succeed?

Which of the following is an element of promissory estoppel?

A promise to perform a preexisting duty is not consideration because the promise is essentially:

Henry agrees to give Beth $100 in exchange for her $50.Which of the following statements is true?

Consideration is what distinguishes enforceable agreements from gratuitous promises.

Mr.Green agrees to an offer to drive Ms.White to the airport for $20,but "only if I feel like it".Mr.Green has failed to give sufficient consideration to create a contract with Ms.White.

A contract in which one party to the agreement agrees to buy all of the other party's production of a particular commodity is called a requirements contract.

Promissory estoppel cannot be applied in the case of the absence of a binding consideration.

Which of the following meets the requirements of consideration?

Which of the following statements about output contracts is false?

In a(n)________ contract,the distributor must use her best efforts to sell the goods and the manufacturer must use his best efforts to supply the goods.

Which of the following is often used by agreements that try to make gratuitous promises look like true bargains?

Historically,free promises were not enforced unless they had which of the following supporting them?

As discussed in the case in the text,McLellan v.Charly,promissory estoppel:

A creditor who fails to file suit to collect a debt within the time prescribed by the appropriate statute of limitations loses the right to collect it.

Which of the following is an exception to a consideration requirement?

Patricia is a general contractor performing construction work for ABC Corp.Patricia requested extra payment because abnormal subsurface rock formations made excavation on the construction site far more costly and time-consuming than could have been reasonably expected.The court will:

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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