Question 1

In which of the following situations have both parties given consideration to support a contract?

Accepted Answer

A)  Pat,an accounting professor,agrees to tutor one of her students in the study of French for $10 per hour. 
B)  Pat,a police officer,agrees to patrol someone's neighborhood while on duty for $100 a week. 
C)  Pat,because of the great job that a contractor did in building an addition onto her house last year,promises to give the contractor an extra $1,000. 
D)  Pat promises to give her mother $100 per month for the next 10 years for all the work that her mother did in raising Pat.

Question 2

If Sam,a high school senior,promises to go to school every day in exchange for an"A" in his history class,his promise will most likely:

Accepted Answer

A)  be considered illusory 
B)  be found to lack consideration as he had a preexisting duty to attend school 
C)  be considered de facto 
D)  be upheld as entering into a unilateral contract

Question 3

Lode Mines enters into a contract with Ajax Photo Labs,whereby Ajax agrees to purchase all its requirements of silver needed for photo finishing during the next year,from Lode,at $4.00 ounce.Over the last 4 years,Ajax has used an average of 10,000 ounces of silver per year.Lode only produces about 15,000 ounces of silver per year.About 2 months into the contract,the price of silver skyrockets to $50 per ounce.Ajax immediately orders an additional 50,000 ounces from Lode.Lode refuses to deliver,and Ajax sues.What is the most likely outcome?

Accepted Answer

A)  Lode wins; requirements contracts are not enforceable because they do not contain a quantity. 
B)  Ajax wins; requirements contracts are enforceable. 
C)  Lode wins; even if requirements contracts are enforceable,the parties must act in "good faith," and Ajax is acting in bad faith. 
D)  Ajax wins; they are acting in "good faith," and this was a risk that Lode assumed.

Question 4

Promissory estoppel is an equitable doctrine that prevents the withdrawal of a promise by the promissor if it will adversely affect a promissee who has changed his or her position in justifiable reliance on the promise.

Accepted Answer

A) True 
 B)False

Question 5

Money is a common form of consideration to support a contract.

Accepted Answer

A) True 
 B)False

Question 6

The nonperformance of an accord is called satisfaction by the debtor party.

Accepted Answer

A) True 
 B)False

Question 7

An agreement to settle an earlier contract that was in dispute is:

Accepted Answer

A)  an illusory promise 
B)  a putout contract 
C)  a novation 
D)  the exercise of an option to cancel 
E)  an accord and satisfaction

Question 8

When a seller promises a buyer to sell to he/she all of an item that it produces,this results in:

Accepted Answer

A)  an unenforceable illusory contract 
B)  an enforceable requirements contract 
C)  an enforceable output contract 
D)  an enforceable accord and satisfaction 
E)  an enforceable contract with an option to cancel

Question 9

A cash payment of $1 given to support a gift promise cannot support a contract.

Accepted Answer

A) True 
 B)False

Question 10

Generally,a moral obligation is sufficient consideration to bind someone to a contract.

Accepted Answer

A) True 
 B)False

Question 11

Worldwide Motor Company promised to buy all its needs,"taking into account tires purchased from other tire companies," for automobile tires from Good Tire Co.,and Good promised to sell these tires.The contract also provided that Worldwide could cancel the contract at any time,without penalty,and could buy tires from other manufacturers if it so desired.This contract is:

Accepted Answer

A)  valid and fully enforceable 
B)  unenforceable,because requirement contracts are generally unenforceable 
C)  unenforceable,because Worldwide's promise is illusory and there is no mutuality of obligation 
D)  unenforceable,because output contracts are generally unenforceable

Question 12

Forbearance in the form of refraining from drinking or using tobacco for a specified time period cannot be consideration to uphold a contract.

Accepted Answer

A) True 
 B)False

Question 13

An illusory promise is an example of a promise that will be enforced even when consideration is lacking.

Accepted Answer

A) True 
 B)False

Question 14

In order to meet the consideration requirement,the legal detriment suffered by each party must have been given in exchange for that of the other party.

Accepted Answer

A) True 
 B)False

Question 15

The doctrine of promissory estoppel holds that most gift promises can be enforced.

Accepted Answer

A) True 
 B)False

Question 16

Why does the law not enforce gratuitous promises? Are there some gratuitous promises which the courts should enforce? Which ones? Are there provisions in the law which take care of these situations?

Accepted Answer

The answer of Why does the law not enforce gratuitous...

Question 17

"Legal detriment" in the context of consideration means:

Accepted Answer

A)  giving up an existing legal right 
B)  taking on a new legal duty 
C)  giving up an existing legal right or taking on a new legal duty 
D)  being found guilty in a criminal case 
E)  getting the short end of the deal in a contract

Question 18

A party who promises to complete a job according to the terms of a contract signed in the past has not given consideration due to past consideration.

Accepted Answer

A) True 
 B)False

Question 19

A promise to not inflict bodily harm on another is supported by consideration.

Accepted Answer

A) True 
 B)False

Question 20

In which of the following situations is there adequate consideration on the part of the promisor to support enforcement of a contract?

Accepted Answer

A)  Bob,a police officer,promises to drive by your house and check on it during his off-duty time. 
B)  Sam,a first-grade teacher,promises to make sure your child learns his lessons in class for $500. 
C)  LBM Corporation,at Fred's retirement dinner,promises to pay Fred $2,000 a month during his retirement because of his years of dedication to the company. 
D)  I promise to buy a bike from you for $400 if I decide I'm going to get a new bike this year. 
E)  Billy,because of all that his mother did in raising him,promises her that he will buy her a new car.

Exam 11: Consideration and Promissory Estoppel

In which of the following situations have both parties given consideration to support a contract?

If Sam,a high school senior,promises to go to school every day in exchange for an"A" in his history class,his promise will most likely:

Promissory estoppel is an equitable doctrine that prevents the withdrawal of a promise by the promissor if it will adversely affect a promissee who has changed his or her position in justifiable reliance on the promise.

Money is a common form of consideration to support a contract.

The nonperformance of an accord is called satisfaction by the debtor party.

An agreement to settle an earlier contract that was in dispute is:

When a seller promises a buyer to sell to he/she all of an item that it produces,this results in:

A cash payment of $1 given to support a gift promise cannot support a contract.

Generally,a moral obligation is sufficient consideration to bind someone to a contract.

Forbearance in the form of refraining from drinking or using tobacco for a specified time period cannot be consideration to uphold a contract.

An illusory promise is an example of a promise that will be enforced even when consideration is lacking.

In order to meet the consideration requirement,the legal detriment suffered by each party must have been given in exchange for that of the other party.

The doctrine of promissory estoppel holds that most gift promises can be enforced.

Why does the law not enforce gratuitous promises? Are there some gratuitous promises which the courts should enforce? Which ones? Are there provisions in the law which take care of these situations?

"Legal detriment" in the context of consideration means:

A party who promises to complete a job according to the terms of a contract signed in the past has not given consideration due to past consideration.

A promise to not inflict bodily harm on another is supported by consideration.

In which of the following situations is there adequate consideration on the part of the promisor to support enforcement of a contract?