Question 1

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. B

Question 2

The UCC provides that a contract for the sale of goods cannot be effectively modified without new consideration.

Accepted Answer

A) True 
 B)False  False

Question 3

In a unilateral contract, a promise is exchanged from one party to another for a promise to forbear to act.

Accepted Answer

A) True 
 B)False  False

Question 4

Darren owes Carl a past-due undisputed debt of $600. Darren sees Carl in a restaurant and pays him $500. Carl then says to Darren , "Forget about the other $100 you owe me. I'm glad to get the $500." Carl 's promise to discharge the remainder of the debt is binding.

Accepted Answer

A) True 
 B)False

Question 5

An agreement to sell the entire production of a particular plant is a requirements contract.

Accepted Answer

A) True 
 B)False

Question 6

The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would not be enforceable without additional consideration?

Accepted Answer

A)   A promise to pay a debt barred by the statute of limitations.
B)   A promise to pay a debt discharged in bankruptcy where the promise meets the requirements of the Bankruptcy Code.
C)   A promise which falls within the doctrine of promissory estoppel.
D)   The settlement of an undisputed debt.

Question 8

Which of the following statements best describes charitable subscription promises?

Accepted Answer

A)   They are generally not enforceable.
B)   They are equated by the law with gifts.
C)   They are generally enforceable if there is reliance or a probability of reliance by the charity.
D)   Courts generally find that it would be unjust to enforce them because persons who promise charitable subscriptions do not expect to be held accountable for them.

Question 9

In a contract for the sale of lawn care services, an issue arises about whether the homeowner would receive disproportionately less in service than the lawn care company would receive in compensation. This disparity may be relevant to the:

Accepted Answer

A)   requirement of legally sufficient consideration.
B)   availability of certain defenses and remedies.
C)   the voidability of the contract due to undue influence.
D)   level of economic duress.

Question 10

Ken, a research chemist, has been promised a fellowship with a stipend of $20,000 to do research on synthetic fuel oil. Under the terms of the fellowship, Ken is free to use the money as he sees fit. Ken decides to build his own laboratory, so he will not have to rent one. He hires a carpenter who begins working on shelving and cabinets in the laboratory. Then Ken receives a telegram saying the fellowship has been canceled. No reason is given for the cancellation. If Ken sues, will he be able to collect the money from the foundation which promised the fellowship? Explain your answer using legal terminology.

Accepted Answer

The answer of Ken, a research chemist, has been promised...

Question 11

In DiLorenzo v. Valve & Primer Corporation , the court held:

Accepted Answer

A)   DiLorenzo gave consideration for the stock option.
B)   Valve & Primer conditioned the alleged stock option on DiLorenzo's promise to remain in its employment.
C)   promissory estoppel applied because there was detrimental reliance on DiLorenzo's part.
D)   there was no consideration for the stock option, and promissory estoppel did not apply because detrimental reliance was not proven.

Question 12

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

Accepted Answer

A) True 
 B)False

Question 13

Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement best describes the situation?

Accepted Answer

A)   McHenry is not liable to Nancy since there was no consideration.
B)   McHenry is not liable to Nancy since there was past consideration.
C)   McHenry is liable to Nancy since adequate consideration was given by both parties.
D)   McHenry is liable to Nancy based on the concept of promissory estoppel.

Question 14

A debt is disputed only if both the existence and amount are contested.

Accepted Answer

A) True 
 B)False

Question 15

Promises to perform prior unenforceable obligations  are enforceable even though they are not supported by consideration.

Accepted Answer

A) True 
 B)False

Question 16

Define consideration.

Accepted Answer

The answer of Define consideration....

Question 17

Sam owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. He has been offered a two-year graduate fellowship, but he will not be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer?

Accepted Answer

A)   No, because the bank can still sue for the remaining $2,000.
B)   No, because the manager's promise is not binding on the bank.
C)   Yes, because the early payment of the loan is consideration that makes the bank's promise binding.
D)   Yes, because the bank must do whatever the manager says.

Question 18

In some states, a contract under seal is binding without consideration.

Accepted Answer

A) True 
 B)False

Question 19

Nathan entered a contract while he was seventeen. If, upon reaching the age of majority, he has not avoided the contract and promises to perform those contractual obligations, new consideration is required for the contract to be enforceable.

Accepted Answer

A) True 
 B)False

Question 20

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.

Exam 12: Consideration

The UCC provides that a contract for the sale of goods cannot be effectively modified without new consideration.

In a unilateral contract, a promise is exchanged from one party to another for a promise to forbear to act.

Darren owes Carl a past-due undisputed debt of $600. Darren sees Carl in a restaurant and pays him $500. Carl then says to Darren , "Forget about the other $100 you owe me. I'm glad to get the $500." Carl 's promise to discharge the remainder of the debt is binding.

An agreement to sell the entire production of a particular plant is a requirements contract.

The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.

Which of the following would not be enforceable without additional consideration?

Which of the following statements best describes charitable subscription promises?

In a contract for the sale of lawn care services, an issue arises about whether the homeowner would receive disproportionately less in service than the lawn care company would receive in compensation. This disparity may be relevant to the:

In DiLorenzo v. Valve & Primer Corporation , the court held:

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

A debt is disputed only if both the existence and amount are contested.

Promises to perform prior unenforceable obligations are enforceable even though they are not supported by consideration.

Define consideration.

In some states, a contract under seal is binding without consideration.

Nathan entered a contract while he was seventeen. If, upon reaching the age of majority, he has not avoided the contract and promises to perform those contractual obligations, new consideration is required for the contract to be enforceable.

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