Question 1

Once a binding accord and satisfaction has been entered into,parties give up their right to have a court decide their liability.

Accepted Answer

A) True 
 B)False

Question 2

Generally,a bilateral contract that lacks mutuality is unenforceable due to lack of consideration.

Accepted Answer

A) True 
 B)False

Question 3

Past consideration is sometimes accepted for _____.

Accepted Answer

A)  official duties 
B)  legal obligations 
C)  moral obligations 
D)  charitable donations 
A)  official duties 
B)  legal obligations 
C)  moral obligations 
D)  charitable donations

Question 4

Which of the following statements is true about the modification of an existing contract under the Uniform Commercial Code?

Accepted Answer

A)  Agreements to modify contracts for the sale of goods need consideration to be binding. 
B)  If the price of the goods in a modified agreement is $500 or more, the modification is enforceable. 
C)  There is no duty to agree to a modification. 
D)  There is no legal prohibition against agreements that result from coercion. 
A)  Agreements to modify contracts for the sale of goods need consideration to be binding. 
B)  If the price of the goods in a modified agreement is $500 or more, the modification is enforceable. 
C)  There is no duty to agree to a modification. 
D)  There is no legal prohibition against agreements that result from coercion.

Question 5

When a promisee agrees not to do something he or she has a legal right to do in exchange for the promisor's promise,it constitutes legal value.

Accepted Answer

A) True 
 B)False

Question 6

Stintson Corp.had agreed to create employee identity cards for McLaughlin Inc.for $60,000.Some of the cards delivered by Stintson Corp.had damages made during the lamination process.McLaughlin Inc.promised Stintson Corp.an additional $20,000 to replace the damaged identity cards,and Stintson Corp.did so.Then McLaughlin Inc.refused to pay Stintson Corp.more than $60,000 for the work.Which of the following statements is true of this situation?

Accepted Answer

A)  Stintson Corp. is not entitled to any more than $60,000 for its work. 
B)  McLaughlin Inc. owes Stintson Corp. the additional $20,000. 
C)  Stintson Corp. would still be entitled only to $60,000 because such an act is new consideration that was provided to support the modification. 
D)  Stintson Corp. is entitled to the additional $20,000 as legal value has nothing to do with adequacy of consideration. 
A)  Stintson Corp. is not entitled to any more than $60,000 for its work. 
B)  McLaughlin Inc. owes Stintson Corp. the additional $20,000. 
C)  Stintson Corp. would still be entitled only to $60,000 because such an act is new consideration that was provided to support the modification. 
D)  Stintson Corp. is entitled to the additional $20,000 as legal value has nothing to do with adequacy of consideration.

Question 7

Explain forbearance to sue in relation to consideration.

Accepted Answer

Forbearance occurs when someone promises

Question 8

Freedom of contract includes the freedom to make bad bargains.

Accepted Answer

A) True 
 B)False

Question 9

The promise not to file suit is not valid consideration because the promisor has given up a legal right,the right to sue.

Accepted Answer

A) True 
 B)False

Question 10

In determining whether a party has given consideration,courts look at whether the promises exchanged were of equal value.

Accepted Answer

A) True 
 B)False

Question 11

Legal value that is bargained for and given in exchange for an act or promise is called _____.

Accepted Answer

A)  compensation 
B)  obligation 
C)  consideration 
D)  forbearance 
A)  compensation 
B)  obligation 
C)  consideration 
D)  forbearance

Question 12

Rudo asked Harun to detail his brand-new sports car by painting flames on the side of the vehicle.After the parties signed a contract and after Harun had already started to paint,Rudo decided that he also wanted Harun to install a new stereo system in the car at the same cost and modified the contract likewise.Harun sued Rudo for modifying the existing contract without any prior intimation,but he lost the lawsuit because:

Accepted Answer

A)  Rudo's act was unenforceable for lack of consideration. 
B)  Rudo's promise was enforceable. 
C)  the old contract automatically got cancelled with the addition of a new condition. 
D)  Harun's act was not a preexisting duty and hence of no legal value. 
A)  Rudo's act was unenforceable for lack of consideration. 
B)  Rudo's promise was enforceable. 
C)  the old contract automatically got cancelled with the addition of a new condition. 
D)  Harun's act was not a preexisting duty and hence of no legal value.

Question 13

If a professor charges extra fees to take a regularly scheduled class,it would not be taken as a consideration because such an act:

Accepted Answer

A)  is prohibited by promissory estoppels. 
B)  would violate the preexisting duty rule. 
C)  is new consideration that is provided to support a modification. 
D)  is a tort. 
A)  is prohibited by promissory estoppels. 
B)  would violate the preexisting duty rule. 
C)  is new consideration that is provided to support a modification. 
D)  is a tort.

Question 14

Lou enters into an agreement with LaFancy Inc.,an event management company,to coordinate her wedding in June for the sum of $10,000.In March,Lou calls LaFancy to tell the company the deal is off,because she thinks she can do a better job herself.LaFancy sues Lou,and Lou argues lack of consideration as a defense.Which of the following statements holds true of this scenario?

Accepted Answer

A)  LaFancy has given consideration. 
B)  LaFancy had a legal duty to plan Lou's wedding even before the agreement was signed. 
C)  Lou can enforce LaFancy's promise to her. 
D)  Lou was the only promisor in this contract. 
A)  LaFancy has given consideration. 
B)  LaFancy had a legal duty to plan Lou's wedding even before the agreement was signed. 
C)  Lou can enforce LaFancy's promise to her. 
D)  Lou was the only promisor in this contract.

Question 15

If the amount of a debt is "due and certain," _____.

Accepted Answer

A)  a promise to pay less than the amount lacks consideration 
B)  the debt is considered to be an unliquidated one 
C)  there is a dispute about the existence of the debt 
D)  there is a dispute about the amount of the debt 
A)  a promise to pay less than the amount lacks consideration 
B)  the debt is considered to be an unliquidated one 
C)  there is a dispute about the existence of the debt 
D)  there is a dispute about the amount of the debt

Question 16

Identify the correct statement regarding consideration.

Accepted Answer

A)  A promise by public officials to perform their official duties is always a consideration. 
B)  A promisor's promise not to commit a crime or a tort can never be consideration. 
C)  As a general rule, performing or agreeing to perform a preexisting duty is consideration. 
D)  When new consideration is provided to support a modification, it is unenforceable. 
A)  A promise by public officials to perform their official duties is always a consideration. 
B)  A promisor's promise not to commit a crime or a tort can never be consideration. 
C)  As a general rule, performing or agreeing to perform a preexisting duty is consideration. 
D)  When new consideration is provided to support a modification, it is unenforceable.

Question 17

If Kate promises a stereo system to Uli,which of the following holds true with regard to the idea of consideration?

Accepted Answer

A)  Uli will not be able to enforce Kate's promise if he has not done anything in return. 
B)  Uli has to perform an act in return for Kate's promise. 
C)  Kate's promise should not be supported by consideration. 
D)  Uli's consideration should be an act and not a promise. 
A)  Uli will not be able to enforce Kate's promise if he has not done anything in return. 
B)  Uli has to perform an act in return for Kate's promise. 
C)  Kate's promise should not be supported by consideration. 
D)  Uli's consideration should be an act and not a promise.

Question 18

When a contracting party runs into unforeseeable difficulties that make his or her performance impossible,courts will:

Accepted Answer

A)  not enforce a modification that is not supported by new consideration. 
B)  prosecute the contracting party on criminal charges. 
C)  enforce a modification in the interest of fairness. 
D)  will make the contracting party pay up in full. 
A)  not enforce a modification that is not supported by new consideration. 
B)  prosecute the contracting party on criminal charges. 
C)  enforce a modification in the interest of fairness. 
D)  will make the contracting party pay up in full.

Question 19

A liquidated debt is one that is due and certain,which means that there is no dispute about the existence or the amount of the debt.

Accepted Answer

A) True 
 B)False

Question 20

As a general rule,a promise to discharge a liquidated debt for part payment of the debt at or after its due date is unenforceable due to lack of consideration.

Accepted Answer

A) True 
 B)False

Exam 12: Consideration

Once a binding accord and satisfaction has been entered into,parties give up their right to have a court decide their liability.

Generally,a bilateral contract that lacks mutuality is unenforceable due to lack of consideration.

Past consideration is sometimes accepted for _____.

Which of the following statements is true about the modification of an existing contract under the Uniform Commercial Code?

When a promisee agrees not to do something he or she has a legal right to do in exchange for the promisor's promise,it constitutes legal value.

Explain forbearance to sue in relation to consideration.

Freedom of contract includes the freedom to make bad bargains.

The promise not to file suit is not valid consideration because the promisor has given up a legal right,the right to sue.

In determining whether a party has given consideration,courts look at whether the promises exchanged were of equal value.

Legal value that is bargained for and given in exchange for an act or promise is called _____.

If a professor charges extra fees to take a regularly scheduled class,it would not be taken as a consideration because such an act:

If the amount of a debt is "due and certain," _____.

Identify the correct statement regarding consideration.

If Kate promises a stereo system to Uli,which of the following holds true with regard to the idea of consideration?

When a contracting party runs into unforeseeable difficulties that make his or her performance impossible,courts will:

A liquidated debt is one that is due and certain,which means that there is no dispute about the existence or the amount of the debt.

As a general rule,a promise to discharge a liquidated debt for part payment of the debt at or after its due date is unenforceable due to lack of consideration.

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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