Question 1

Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.

Accepted Answer

A) True 
 B)False  True

Question 2

If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract because of a lack of consideration.

Accepted Answer

A) True 
 B)False  True

Question 3

In settling a liquidated debt, payment of a smaller amount before the due date would constitute consideration, but paying a lesser amount on the due date at an agreed-upon different place of payment would not be legally sufficient consideration.

Accepted Answer

A) True 
 B)False  False

Question 4

Which of the following would most likely be enforceable?

Accepted Answer

A)   An agreement supported by past consideration
B)   A substitute agreement to settle an undisputed debt
C)   A debt agreed to seven years ago in a state where the statute of limitations is six years
D)   A promise following the rendering of emergency services that is not supported by new consideration

Question 5

Jerry received a bill for $300 from Johnson for a tune-up Johnson had performed on Jerry's car. Jerry called Johnson and told him, "The car runs no better now than before the tune-up. I am sending you $100 and no more." Johnson received the $100 check which was marked "paid in full" and cashed it. Jerry is still liable to Johnson for $200.

Accepted Answer

A) True 
 B)False

Question 6

Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job unless Betty agrees to pay him $100 more. What law applies to this fact situation?

Accepted Answer

A)   The acceptance of additional money to settle a disputed claim is supported by consideration.
B)   A past obligation is sufficient consideration for a new promise.
C)   Andrew gives no additional consideration in return for modification of a preexisting contract.
D)   Betty has made a promise in exchange for a forbearance.

Question 7

In which of the following situations will a smaller sum be unable to discharge a larger debt?

Accepted Answer

A)   If the smaller sum is paid before the due date of the larger debt.
B)   If an additional article or service is given together with the payment of the smaller sum.
C)   If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency.
D)   A smaller sum is never able to discharge a larger debt.

Question 8

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

Accepted Answer

A) True 
 B)False

Question 9

Sandy's private secretary promises to keep the contents of a letter she typed secret if Sandy will give her the next day off with pay. If the secretary takes the day off, Sandy has to pay her for the day.

Accepted Answer

A) True 
 B)False

Question 10

Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable?

Accepted Answer

A)   Yes, there is no way for the dealer to get the extra money anyway.
B)   Yes, there is consideration for the modified amount.
C)   No, there is no consideration and the dealer can sue for the extra $300.
D)   No, there is an implied contract to pay the dealer whatever he billed Jack.

Question 11

Define a substituted contract and describe how it affects an agreement.

Accepted Answer

The answer of Define a substituted contract and describe how...

Question 12

Which of the following will support a contract?

Accepted Answer

A)   An illusory promise
B)   Past consideration
C)   Forbearance to do an act
D)   A pre-existing public obligation

Question 13

Consideration:

Accepted Answer

A)   must be given by the promisee to the promisor.
B)   must be adequate.
C)   may be given to the promisor or to some other person by the promisee or by some other person.
D)   need not be equal between the parties, but must be proportionate.

Question 14

A few states provide by statute that the parties need to provide no new consideration when modifying any contract.

Accepted Answer

A) True 
 B)False

Question 15

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible?

Accepted Answer

A)   The employees of the bank
B)   An on-duty sheriff's deputy in the county where the arrest occurred
C)   An off-duty deputy sheriff from a county other than the one where the arrest occurred
D)   None of these are eligible.

Question 16

Ron owes Matt an unsecured debt of $3,000. Ron has a discharge of all his unsecured debts by a bankruptcy court.
Can the contract between Matt and Ron be reinstated?

Accepted Answer

The answer of Ron owes Matt an unsecured debt of...

Question 17

Which of the following are the two basic elements to consideration?

Accepted Answer

A)   Bargained-for exchange and legal sufficiency
B)   Legal detriment and legal benefit
C)   Legal sufficiency and legal adequacy
D)   Promise and forbearance

Question 18

Which of the following is enforceable without consideration?

Accepted Answer

A)   A new promise to pay a debt barred by the statute of limitations.
B)   An illusory promise.
C)   Under the common law, a promise made to satisfy a preexisting moral obligation.
D)   A promise by a father to pay someone for rendering emergency services to his injured son before the father had arrived at the accident scene.

Question 19

D owes C a past-due undisputed debt of $500. D sees C in a bar and pays him $400. C then says to D, "Forget about the other $100 you owe me. I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.

Accepted Answer

A) True 
 B)False

Question 20

A promise to pay $1,000 a year to a local police officer to not have your store vandalized is legally unenforceable under the rule that makes performance of a pre-existing legal obligation legally insufficient consideration.

Accepted Answer

A) True 
 B)False

Exam 12: Consideration

Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.

If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract because of a lack of consideration.

In settling a liquidated debt, payment of a smaller amount before the due date would constitute consideration, but paying a lesser amount on the due date at an agreed-upon different place of payment would not be legally sufficient consideration.

Which of the following would most likely be enforceable?

Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job unless Betty agrees to pay him $100 more. What law applies to this fact situation?

In which of the following situations will a smaller sum be unable to discharge a larger debt?

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

Sandy's private secretary promises to keep the contents of a letter she typed secret if Sandy will give her the next day off with pay. If the secretary takes the day off, Sandy has to pay her for the day.

Define a substituted contract and describe how it affects an agreement.

Which of the following will support a contract?

Consideration:

A few states provide by statute that the parties need to provide no new consideration when modifying any contract.

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible?

Ron owes Matt an unsecured debt of $3,000. Ron has a discharge of all his unsecured debts by a bankruptcy court. Can the contract between Matt and Ron be reinstated?

Which of the following are the two basic elements to consideration?

Which of the following is enforceable without consideration?

D owes C a past-due undisputed debt of $500. D sees C in a bar and pays him $400. C then says to D, "Forget about the other $100 you owe me. I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.

A promise to pay $1,000 a year to a local police officer to not have your store vandalized is legally unenforceable under the rule that makes performance of a pre-existing legal obligation legally insufficient consideration.