Question 1

Which of the following statements is true of consideration?

Accepted Answer

A)  Consideration always has a monetary value regardless of a legal value. 
B)  A promisee can be enforced by the courts to keep his or her promise. 
C)  Consideration enforces gratuitous promises. 
D)  A promisee's consideration may be an act or a promise. 
A)  Consideration always has a monetary value regardless of a legal value. 
B)  A promisee can be enforced by the courts to keep his or her promise. 
C)  Consideration enforces gratuitous promises. 
D)  A promisee's consideration may be an act or a promise. D

Question 2

A promisee's consideration must be another promise and cannot be in the form of an act.

Accepted Answer

A) True 
 B)False  False

Question 3

On January 1,2006,Bev owed City Bank $5,000 on her car loan.The loan was due in May 2006.On January 1,2006,Bev sent the bank a check for $4,800 marked "In full payment for any and all claims City Bank has against me." City Bank cashes the check.Under these circumstances,_____.

Accepted Answer

A)  City Bank can sue Bev for $200 
B)  City Bank has not promised to accept the payment as "payment in full" 
C)  Bev can avoid paying the $200 
D)  Bev has not given consideration 
A)  City Bank can sue Bev for $200 
B)  City Bank has not promised to accept the payment as "payment in full" 
C)  Bev can avoid paying the $200 
D)  Bev has not given consideration C

Question 4

As a general rule,performing a preexisting duty is not consideration.

Accepted Answer

A) True 
 B)False

Question 5

Consideration can have legal value if the promisee:

Accepted Answer

A)  does not involve in an act in the case of unilateral contracts. 
B)  does something he or she had no prior legal duty to do in exchange for the promisor's promise. 
C)  agrees to do something he or she has a legal right to do in exchange for the promisor's promise. 
D)  does not give up something in exchange for the promise made by the promisor. 
A)  does not involve in an act in the case of unilateral contracts. 
B)  does something he or she had no prior legal duty to do in exchange for the promisor's promise. 
C)  agrees to do something he or she has a legal right to do in exchange for the promisor's promise. 
D)  does not give up something in exchange for the promise made by the promisor.

Question 6

According to the rule of _____,if a promisee's performance was rendered before the promisor's promise was made,then it can never serve as consideration,even though it may meet the "legal value" part of the test.

Accepted Answer

A)  past consideration 
B)  preexisting duty 
C)  forbearance 
D)  promissory estoppel 
A)  past consideration 
B)  preexisting duty 
C)  forbearance 
D)  promissory estoppel

Question 7

All courts hold that cashing a "payment in full" check discharges the obligation of debt under the Uniform Commercial Code.

Accepted Answer

A) True 
 B)False

Question 8

Composition agreements are:

Accepted Answer

A)  made in a way that allows the promisor to decide whether or not to perform the promise. 
B)  agreements between a debtor and two or more creditors who agree to accept a stated percentage of their liquidated claims against the debtor at or after the due date. 
C)  agreements entered into when someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration. 
D)  generally treated as non-binding on the parties to the agreement because of the fact that doing so appears to be contrary to the general rule on liquidated debts. 
A)  made in a way that allows the promisor to decide whether or not to perform the promise. 
B)  agreements between a debtor and two or more creditors who agree to accept a stated percentage of their liquidated claims against the debtor at or after the due date. 
C)  agreements entered into when someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration. 
D)  generally treated as non-binding on the parties to the agreement because of the fact that doing so appears to be contrary to the general rule on liquidated debts.

Question 9

Under the Uniform Commercial Code,a modification of an existing contract for the sale of goods requires new consideration.

Accepted Answer

A) True 
 B)False

Question 10

Under section 2-209 of the Uniform Commercial Code,agreements to modify existing contracts for the sale of goods:

Accepted Answer

A)  need new consideration to be binding. 
B)  need no new consideration to be binding. 
C)  require parties to formally terminate their original agreement and start over. 
D)  need new consideration to be binding and require parties to formally terminate their original agreement. 
A)  need new consideration to be binding. 
B)  need no new consideration to be binding. 
C)  require parties to formally terminate their original agreement and start over. 
D)  need new consideration to be binding and require parties to formally terminate their original agreement.

Question 11

Jin moves into a neighborhood in Philadelphia and opens a repair shop.He is harassed by the local gang leader who wants to extort money from him.He promises to pay Sheng,a police officer whose patrol includes Jin's store,$50 a week to "keep an eye on the store" while walking his patrol.Which of the following statements is true of this situation?

Accepted Answer

A)  Jin's promise is enforceable. 
B)  The cop can sue Jin for not keeping his promise of paying $50 per week. 
C)  Sheng's promises toward Jin are not consideration. 
D)  Jin is the promisee and Sheng is the promisor. 
A)  Jin's promise is enforceable. 
B)  The cop can sue Jin for not keeping his promise of paying $50 per week. 
C)  Sheng's promises toward Jin are not consideration. 
D)  Jin is the promisee and Sheng is the promisor.

Question 12

Forbearance occurs when:

Accepted Answer

A)  a debtor and two or more creditors agree to accept a stated percentage of their liquidated claims against the debtor. 
B)  someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration. 
C)  promises are worded in a way that allows the promisor to decide whether or not to perform the promise. 
D)  there is no dispute about the existence or the amount of the debt. 
A)  a debtor and two or more creditors agree to accept a stated percentage of their liquidated claims against the debtor. 
B)  someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration. 
C)  promises are worded in a way that allows the promisor to decide whether or not to perform the promise. 
D)  there is no dispute about the existence or the amount of the debt.

Question 13

An unliquidated debt can be best described as one that:

Accepted Answer

A)  has not been paid in full. 
B)  involves an honest dispute about the existence or amount of the debt. 
C)  is unenforceable due to lack of consideration. 
D)  is due and certain with no dispute about the existence or the amount of the debt. 
A)  has not been paid in full. 
B)  involves an honest dispute about the existence or amount of the debt. 
C)  is unenforceable due to lack of consideration. 
D)  is due and certain with no dispute about the existence or the amount of the debt.

Question 14

Polly promises to pay city council member Smith $500 to show up for the weekly city council meetings.Polly's promise is:

Accepted Answer

A)  supported by consideration. 
B)  wholly enforceable. 
C)  not supported by consideration. 
D)  supported by conditional consideration. 
A)  supported by consideration. 
B)  wholly enforceable. 
C)  not supported by consideration. 
D)  supported by conditional consideration.

Question 15

Which of the following statements is true about unliquidated debts?

Accepted Answer

A)  As the amount is due and certain, a promise to pay less lacks consideration. 
B)  All courts allow collection of the remainder if checks marked "payment in full" are cashed without reservation. 
C)  As the amount is genuinely in dispute, an agreement resulting in accord and satisfaction is enforceable. 
D)  Composition agreements are an exception to unliquidated debts and can be enforced without additional consideration. 
A)  As the amount is due and certain, a promise to pay less lacks consideration. 
B)  All courts allow collection of the remainder if checks marked "payment in full" are cashed without reservation. 
C)  As the amount is genuinely in dispute, an agreement resulting in accord and satisfaction is enforceable. 
D)  Composition agreements are an exception to unliquidated debts and can be enforced without additional consideration.

Question 16

Legal value depends on the adequacy of consideration.

Accepted Answer

A) True 
 B)False

Question 17

_____ is the legal term for settling a disputed claim.

Accepted Answer

A)  Accord and satisfaction 
B)  Forbearance 
C)  Composition agreement 
D)  Promissory estoppel 
A)  Accord and satisfaction 
B)  Forbearance 
C)  Composition agreement 
D)  Promissory estoppel

Question 18

If Khalid agrees to sell his house to Lalita for $300,000,a property which is actually worth $310,000,_____.

Accepted Answer

A)  Lalita can recover damages for breach of contract if Khalid refuses to perform 
B)  Lalita will be able to get a court order for the specific performance of Khalid's promise 
C)  Khalid is not entitled to equitable remedies 
D)  Lalita cannot recover damages for breach of contract 
A)  Lalita can recover damages for breach of contract if Khalid refuses to perform 
B)  Lalita will be able to get a court order for the specific performance of Khalid's promise 
C)  Khalid is not entitled to equitable remedies 
D)  Lalita cannot recover damages for breach of contract

Question 19

If a promisor already had a duty to do what he has done or promised to do,the promisor has _____.

Accepted Answer

A)  made new consideration to support a modification and it is unenforceable 
B)  not given legal value 
C)  agreed to do something he had no right to do 
D)  made a promise which is consideration 
A)  made new consideration to support a modification and it is unenforceable 
B)  not given legal value 
C)  agreed to do something he had no right to do 
D)  made a promise which is consideration

Question 20

Vladimir Constructions contracted to build the Petersons a house for $50,000.When Vladimir began digging the foundation,it hit bedrock,which was highly unusual in that area.Vladimir told the Petersons that it required an extra $5,000 to build the house.The Petersons agreed,but when the house was done,refused to pay Vladimir any more than the original contract price.What can be the outcome if Vladimir sues the Petersons for the extra $5,000 and why?

Accepted Answer

Students' answers may vary.Generally,mod

Exam 12: Consideration

Which of the following statements is true of consideration?

A promisee's consideration must be another promise and cannot be in the form of an act.

On January 1,2006,Bev owed City Bank $5,000 on her car loan.The loan was due in May 2006.On January 1,2006,Bev sent the bank a check for $4,800 marked "In full payment for any and all claims City Bank has against me." City Bank cashes the check.Under these circumstances,_____.

As a general rule,performing a preexisting duty is not consideration.

Consideration can have legal value if the promisee:

According to the rule of _____,if a promisee's performance was rendered before the promisor's promise was made,then it can never serve as consideration,even though it may meet the "legal value" part of the test.

All courts hold that cashing a "payment in full" check discharges the obligation of debt under the Uniform Commercial Code.

Composition agreements are:

Under the Uniform Commercial Code,a modification of an existing contract for the sale of goods requires new consideration.

Under section 2-209 of the Uniform Commercial Code,agreements to modify existing contracts for the sale of goods:

Forbearance occurs when:

An unliquidated debt can be best described as one that:

Polly promises to pay city council member Smith $500 to show up for the weekly city council meetings.Polly's promise is:

Which of the following statements is true about unliquidated debts?

Legal value depends on the adequacy of consideration.

_____ is the legal term for settling a disputed claim.

If Khalid agrees to sell his house to Lalita for $300,000,a property which is actually worth $310,000,_____.

If a promisor already had a duty to do what he has done or promised to do,the promisor has _____.

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Introduction to Security

Security Interests in Personal Property

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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