Question 1

Discuss the concept of adequacy of consideration.

Accepted Answer

The answer of Discuss the concept of adequacy of consideration....

Question 2

The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production.After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.

Accepted Answer

A) True 
 B)False

Question 3

Define consideration.

Accepted Answer

The answer of Define consideration....

Question 4

Andrew agrees to paint Rosalene'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 Rosalene agrees to pay him $100 more.What principle 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 was already obligated to paint the house.He gives no additional consideration in return for Rosalene's promise to pay more money. 
D) Rosalene has made a promise in exchange for a forbearance.

Question 5

An illusory promise has the form of a promise but imposes no real obligation.

Accepted Answer

A) True 
 B)False

Question 6

What transactions are enforceable even though they are not supported by consideration?

Accepted Answer

The answer of What transactions are enforceable even though they...

Question 7

Mary agrees to sew Georgia's prom dress for $50 plus costs.Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60.When Mary finishes the dress (with ruffles), Georgia must pay:

Accepted Answer

A) $50, since that is the original agreement. 
B) $50, since a modification must be in writing. 
C) $60, since the modified agreement is supported by additional consideration. 
D) $60, since any subsequent agreement is enforceable.

Question 8

Under the common law, a modification of a preexisting contract must be supported by mutual consideration; under the Code, a contract can be modified without new consideration.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Howard ordered an aluminum storm door for $249.99.Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door for $179.99.Howard called the store and demanded the advertised price.They say okay.

Accepted Answer

A) Howard must pay $179.99. 
B) Howard must pay $249.99. 
C) There is no contract. 
D) There is a contract for the reasonable value of the door.

Question 11

Harold purchased 400 pairs of gloves from Isaac at a contract price of $800.Fifty of the gloves were defective and a dispute arose as to the amount due and owing under the contract.Harold refuses to pay the $800 and Isaac is threatening to sue.Which of the following is correct with regard to this transaction?

Accepted Answer

A) If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable. 
B) If Isaac agrees to accept $600 to settle the dispute and Harold pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. 
C) Harold is under a pre-existing legal obligation to pay the $800. 
D) Two of the above, (b) and (c).

Question 12

Which of the following would not be a promise statutorily made enforceable without consideration?

Accepted Answer

A) Hawkins, in good faith, changes the quantity of square yards of carpet ordered from Grant Mills. 
B) Jones promises to pay his cousin's past-due cell phone bill. 
C) Dodds signs and delivers a waiver of a claim arising out of a breach of contract by Keys. 
D) A signed, written offer by Marcum Jewelers to sell four dozen 18" gold chains to the Alpha Sorority for $480 within the next 30 days.

Question 13

There are certain transactions that are enforceable without consideration.These include:

Accepted Answer

A) promises to pay a debt barred by the statute of limitations. 
B) a promise to pay a debt that has been discharged in bankruptcy if certain requirements are met. 
C) a new promise to perform a voidable obligation that has not previously been avoided. 
D) All of the above.

Question 14

"Consideration" requires an actual benefit to both sides of an agreement.

Accepted Answer

A) True 
 B)False

Question 15

Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road.After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog.Marnie's promise is binding, because there is a bargained-for-exchange.

Accepted Answer

A) True 
 B)False

Question 16

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 17

The requirement of legally sufficient consideration is concerned with whether the bargain was good.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated.She expects to know for sure how much she will receive within a week or so.Edward agrees.

Accepted Answer

A) This is an illusory contract, because Darla is not certain she will receive the money. 
B) There is no consideration present in this example. 
C) The consideration from Darla to Edward is the promise of $6,000 subject to a condition. 
D) Two of the above.

Question 20

Ken, a research chemist, has been promised a fellowship with a stipend of $10,000 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...

Exam 12: Consideration

Discuss the concept of adequacy of consideration.

The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production.After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.

Define consideration.

Andrew agrees to paint Rosalene'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 Rosalene agrees to pay him $100 more.What principle applies to this fact situation?

An illusory promise has the form of a promise but imposes no real obligation.

What transactions are enforceable even though they are not supported by consideration?

Mary agrees to sew Georgia's prom dress for $50 plus costs.Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60.When Mary finishes the dress (with ruffles) , Georgia must pay:

Under the common law, a modification of a preexisting contract must be supported by mutual consideration; under the Code, a contract can be modified without new consideration.

Howard ordered an aluminum storm door for $249.99.Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door for $179.99.Howard called the store and demanded the advertised price.They say okay.

Which of the following would not be a promise statutorily made enforceable without consideration?

There are certain transactions that are enforceable without consideration.These include:

"Consideration" requires an actual benefit to both sides of an agreement.

Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road.After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog.Marnie's promise is binding, because there is a bargained-for-exchange.

The requirement of legally sufficient consideration is concerned with whether the bargain was good.

Which of the following would most likely be enforceable?

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated.She expects to know for sure how much she will receive within a week or so.Edward agrees.