Question 1

Output contracts serve the legitimate business purposes of assuring the seller of a purchaser for all its output.

Accepted Answer

A) True 
 B)False

Question 2

A requirements contract is a contract in which a buyer agrees to purchase all of its requirements for an item from one seller.

Accepted Answer

A) True 
 B)False

Question 3

What is a gift promise? When can a gift promise be enforced? Can a completed gift promise be rescinded?

Accepted Answer

Gift promises are promises that lack con

Question 4

To be enforceable, a contract must be supported by consideration.

Accepted Answer

A) True 
 B)False

Question 5

A promise lacks consideration if a person promises to perform an act or do something he or she is already under an obligation to do. This is called a(n) ________.

Accepted Answer

A)  illegal consideration 
B)  preexisting duty 
C)  gift promise 
D)  illusory promise 
A)  illegal consideration 
B)  preexisting duty 
C)  gift promise 
D)  illusory promise

Question 6

Promissory estoppel is an equity doctrine that permits parties to enforce a contract that includes consideration.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true of output contracts?

Accepted Answer

A)  It cannot contain the best-efforts clause. 
B)  It provides the seller with reduced selling costs. 
C)  It assures the purchaser that the seller will use his or her best efforts to achieve the contract's objective. 
D)  It assures the seller of a purchaser for all its outputs. 
A)  It cannot contain the best-efforts clause. 
B)  It provides the seller with reduced selling costs. 
C)  It assures the purchaser that the seller will use his or her best efforts to achieve the contract's objective. 
D)  It assures the seller of a purchaser for all its outputs.

Question 8

A contract is considered to be supported by legal value if the promisee receives a legal benefit.

Accepted Answer

A) True 
 B)False

Question 9

AtlasNow Construction Company, a general contractor, plans to place a bid for building a hospital. It requests bids from subcontractors for plumbing and other construction related services that will be needed for building the hospital. Catapipes Plumbing Company, a plumbing subcontractor, submits the lowest bid for the plumbing work, and AtlasNow incorporates Catapipes's low bid in its own bid for the general contract. Based on all of the subcontractors' bids, AtlasNow submits the lowest overall bid to build the hospital and is awarded the contract. If Catapipes Plumbing plans to withdraw its bid, what legal doctrine can help AtlasNow from being meted out injustice due to lack of consideration?

Accepted Answer

A)  promissory estoppel 
B)  freedom of contract 
C)  acquiescence 
D)  exclusionary rule 
A)  promissory estoppel 
B)  freedom of contract 
C)  acquiescence 
D)  exclusionary rule

Question 10

What is contract consideration?

Accepted Answer

Consideration must be given before a con

Question 11

An illusory promise is an example of a contract that lacks consideration.

Accepted Answer

A) True 
 B)False

Question 12

In an output contract, the buyer agrees to make all of its purchases from one buyer.

Accepted Answer

A) True 
 B)False

Question 13

What is a best-efforts contract?

Accepted Answer

A best-efforts contract is a contract th

Question 14

A contract in which a seller agrees to sell all of its production to a single buyer is known as a(n) ________.

Accepted Answer

A)  requirements contract 
B)  output contract 
C)  best-efforts contract 
D)  option contract 
A)  requirements contract 
B)  output contract 
C)  best-efforts contract 
D)  option contract

Question 15

The preexisting rule allows for midstream changes to be enforceable in a contract.

Accepted Answer

A) True 
 B)False

Question 16

A promise based on past consideration is not enforceable.

Accepted Answer

A) True 
 B)False

Question 17

Define and describe the doctrine of promissory estoppel.

Accepted Answer

Promissory estoppel is an equity doctrin

Question 18

For a gift promise to be enforceable, the promisee must offer a consideration.

Accepted Answer

A) True 
 B)False

Question 19

Illusory promises require both parties to perform their contractual obligations.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true of an illegal consideration?

Accepted Answer

A)  Contract requires that either both parties suffer legal detriment. 
B)  Contract requires that the promisor receives a legal benefit. 
C)  Contract requires that the promisee suffer a legal detriment. 
D)  Contracts based on illegal consideration are void. 
A)  Contract requires that either both parties suffer legal detriment. 
B)  Contract requires that the promisor receives a legal benefit. 
C)  Contract requires that the promisee suffer a legal detriment. 
D)  Contracts based on illegal consideration are void.

Exam 11: Consideration and Promissory Estoppel

Output contracts serve the legitimate business purposes of assuring the seller of a purchaser for all its output.

A requirements contract is a contract in which a buyer agrees to purchase all of its requirements for an item from one seller.

What is a gift promise? When can a gift promise be enforced? Can a completed gift promise be rescinded?

To be enforceable, a contract must be supported by consideration.

A promise lacks consideration if a person promises to perform an act or do something he or she is already under an obligation to do. This is called a(n) ________.

Promissory estoppel is an equity doctrine that permits parties to enforce a contract that includes consideration.

Which of the following is true of output contracts?

A contract is considered to be supported by legal value if the promisee receives a legal benefit.

What is contract consideration?

An illusory promise is an example of a contract that lacks consideration.

In an output contract, the buyer agrees to make all of its purchases from one buyer.

What is a best-efforts contract?

A contract in which a seller agrees to sell all of its production to a single buyer is known as a(n) ________.

The preexisting rule allows for midstream changes to be enforceable in a contract.

A promise based on past consideration is not enforceable.

Define and describe the doctrine of promissory estoppel.

For a gift promise to be enforceable, the promisee must offer a consideration.

Illusory promises require both parties to perform their contractual obligations.

Which of the following is true of an illegal consideration?

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