Deck 8: Agreement and Consideration in Contracts

Question 1

Essentially, adequacy of consideration concerns the fairness of the bargain.

Answer 1

True

Question 2

An effective offer requires reasonably definite terms.

Answer 2

True

Question 3

A covenant not to sue is against public policy.

Answer 3

False

Question 4

To be legally sufficient, consideration must be evidenced by something tangible.

Question 5

An acceptance can materially change or add to the terms of the original offer without rejecting it.

Question 6

A quasi contract is a fictional contract.

Question 7

A promise to do what one already has a legal duty to do constitutes legally sufficient consideration.

Question 8

An acceptance must be unequivocal.

Question 9

A forum-selection clause indicates the location for the resolution of any dispute arising under the contract.

Question 10

A unilateral contract is formed at the moment when the contract is performed.

Question 11

An offer must be practical to be effective.

Question 12

One necessary element for an effective offer is a reasonable price related to market value.

Question 13

Under the mailbox rule, an acceptance becomes valid when it is dispatched.

Question 14

A contract that has been fully performed by the parties is an executory contract.

Question 15

Performance can constitute the consideration that creates a contractual obligation.

Question 16

In contract law, "consideration" refers to the time that a party takes to evaluate a deal.

Question 17

An implied contract is not an actual contract.

Question 18

Most advertisements-"this property for sale"-are offers.

Question 19

Legally sufficient consideration is something of value in the eyes of the law.

Question 20

An express contract must be in writing.

Question 21

An illusory promise is a promise that is enforceable without consideration.

Question 22

A counteroffer is a rejection of the original offer and the simultaneous making of a new offer.

Question 23

In contract law, intent is determined by the secret, subjective intent, or belief, of a party.

Question 24

An "offer" to sell an item on an online auction site generally is treated as an invitation to negotiate.

Question 25

An offer may not be revoked before it is accepted.

Question 26

Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration.

Question 27

Informal contracts are usually based on their substance rather than their form.

Question 28

Jessie, a nurse practitioner, renders aid to Knute, who is injured and unconscious. Jessie can recover the cost of the aid from Knute​

A)on a quasi contract theory.
B)only if Knute recovers because of the aid.
C)only if Knute was aware of the aid.
D)under no circumstances.

Question 29

Clay offers to pay Dot $50 for a golf lesson for Erin. They agree to meet the day after tomorrow to exchange the cash for the lesson. These parties have​

A)a bilateral contract.
B)a trilateral contract.
C)a unilateral contract.
D)no contract.

Question 30

An unenforceable contract is one that cannot be enforced because of certain legal defenses against it.

Question 31

A bilateral contract comes into existence at the moment promises are exchanged.

Question 32

A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable.

Question 33

The UETA applies only to electronic records and electronic signatures relating to a transaction.

Question 34

Robin claims that her contract with Stroud for tennis lessons is voidable as the lessons were never provided and the tennis club burnt down. If their contract is avoided

A)both parties are released from it.
B)both parties must fully perform their obligations under it.
C)a wholly different contract is agreed to.
D)a wholly different contract is imposed "as if" the parties had agreed.

Question 35

An e-contract must meet basic requirements that are different from those required of a paper contract.

Question 36

One of the requirements of a valid contract is an adequate price.

Question 37

If a voidable contract is ratified, the parties must fully perform their respective legal obligations.

Question 38

A transaction that lacks a bargained-for exchange lacks an element of consideration.

Question 39

Rough Water Fishing Trips, LLC, and Schafer enter into a contract for the delivery of a used freshwater fishing boat. Until the goods are delivered and paid for, these parties have​

A)an executory contract.
B)no contract.
C)a quasi contract.
D)an executed contract.

Question 40

Pacific Charter Company offers to provide an air-conditioned bus to Quincy's tour group for $1,500 plus the cost of the fuel. The mailbox rule applies if Quincy accepts the offer by​​

A)e-mail.
B)phone.
C)regular mail.
D)any of the choices.

Question 41

Waste Management Corporation enters into contracts for its services online. Waste Management can protect itself against disputes involving these contracts by making important terms​

A)reasonably clear.
B)ambiguous.
C)unreadable.
D)non-negotiable.

Question 42

Younger asks Zoey, "Do you want to buy one of my fishing rods?" This is​

A)a valid offer.
B)not a valid offer because the terms are not definite.
C)not a valid offer because Younger did not state an intent.
D)not a valid offer because Zoey did not respond.Fact Pattern 8-1​ Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000.Urban Edge agrees to pay.

Question 43

Play-It-Loud, LLC, provides music-streaming services online subject to complex pricing schedules. To control specific offers for the services and thus the resulting contracts, important terms to provide online include​

A)a provision relating to the resolution of any dispute.
B)a detailed history of the music business.
C)positive reviews from users of the service.
D)an updated list of the music available through the service.

Question 44

Paige offers to pay Quik Delivery (QD) $50 if it picks up and delivers to her a package of business documents from Rico within 30 minutes. QD can accept the offer only by meeting the deadline. If QD performs as directed, these parties will have​

A)a bilateral contract.
B)a trilateral contract.
C)a unilateral contract.
D)no contract.

Question 45

Liz offers to sell Jock her iPad for $500 without any accessories. Under the mirror image rule, Jock's response will be considered an acceptance if the terms of the acceptance​

A)exactly mirror those of the offer.
B)change the items offered, but do not change the price.
C)change the price, but do not change the items offered.
D)change both the price and the items offered.

Question 46

When a rainstorm erupts outside Rita's Souvenir & Gift Shop, Rita and Shaw enter into an oral contract to split the revenue from Shaw's sale of umbrellas to Rita's customers. The terms of this contract are defined by

A)the conduct of the parties.
B)the words of the parties.
C)the unforeseeable storm that gave rise to the deal.
D)the unexpressed subjective intent of the parties.

Question 47

Mallory promises to buy illegal digital copies of movies from Nick, who promises to deliver on October 31. These promises are most likely​

A)enforceable.
B)valid.
C)void.
D)voidable.

Question 48

​Refer to Fact Pattern 8-1. If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased, the agreement is

A)enforceable as the consideration is past.
B)enforceable because of unforeseen difficulties.
C)unenforceable as an illusory promise.
D)unenforceable due to the preexisting duty rule.

Question 49

Gayla tells Franco that she will pay him $50 to haul the trimmed tree limbs and other lawn debris from her property. Franco's acceptance is complete​

A)as soon as he says he will do the job.
B)once he starts to work.
C)only after he hauls away the debris.
D)when he hears the offer.

Question 50

Valley Paragliders Association files a suit against Wing Designers, Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if​

A)there is a large disparity in the amount of consideration exchanged.
B)the consideration involves the performance of services.
C)something of value passed between the parties.
D)the consideration is worth less than $100.

Question 51

Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when​

A)received.
B)sent.
C)followed up by a confirmation letter sent by regular mail.
D)composed on a Relay computer.

Question 52

Diversions, Inc., makes video, games. Ember buys a copy of Final Infinity. Inside the package is a shrink-wrap agreement. With respect to the contract for the game's purchase, the shrink-wrap agreement may not be enforced if Ember​

A)does not read it.
B)learns of it after the contract is formed.
C)learns of it before the contract is formed.
D)has difficulty learning how to play the game.

Question 53

Frisco offers to buy a Gibson guitar owned by Hayden for twice what Hayden paid for it. She accepts and hands the guitar to Frisco. Her delivery of the guitar is​

A)not consideration because her voluntary consent may be lacking.
B)not consideration because the exchange is not a bargain.
C)consideration.
D)not consideration because the value is not legally sufficient.

Question 54

Rafi offers a tour of Bay Harbor aboard his sailboat, Sea Siren, to Tiara's Travel Group for $500. Referring to the prices for similar tours, Tiara's says, "We'll pay no more than $400." Rafi's offer is

A)still open.
B)terminated.
C)rejected and subject to a counteroffer.
D)revoked.

Question 55

Digital Enterprise, Inc., promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is​

A)an enforceable contract.
B)an illusory promise.
C)an option-to-cancel clause.
D)an output contract.

Question 56

Richie, a user of SmartPhoneApps.com's Web site, can download apps for free if he first clicks on "I accept" after viewing certain terms. This is​

A)a contract that does not include the terms.
B)a contract that includes the terms.
C)not a contract but the terms are enforceable.
D)unenforceable.

Question 57

Bo signs a lease with Capri Apartments to lease a studio apartment for the next year for $650 per month. Daisy signs on Capri's behalf as their agent. Bo and Capri have executed a(n)

A)no contract.
B)an express contract.
C)an implied contract.
D)a simple contract.

Question 58

Business Properties, Inc. (BPI), offers to sell a warehouse to Corporate Investments. Corporate says that it will pay BPI $100 to hold the offer open for three business days. This​

A)creates an illegal contract by adding a clause to BPI's offer.
B)makes the offer irrevocable for three days if BPI accepts.
C)negates BPI's offer by changing the price term.
D)voids BPI's offer by extending the time term.

Question 59

While sailboarding, Jolene is injured when Kilroy carelessly crosses her path. Kilroy's insurance company offers Jolene $50,000 to release Kilroy from liability, and she accepts. Later, she learns that her injuries are more serious than she realized. The release is​

A)enforceable.
B)unenforceable because Jolene's injuries are unforeseeably difficult.
C)unenforceable because Kilroy has a preexisting duty to pay.
D)unenforceable because the release is an illusory promise.

Question 60

Lou asks Mark, a cobbler and shoe salesperson, to repair a pair of work boots. There is no discussion of a price, and Lou and Mark do not sign any documents. After the repair, Mark hands Lou a bill. With respect to Lou's obligation to pay the bill, this is​

A)an express contract.
B)an implied contract.
C)a quasi contract.
D)no contract.

Question 61

D'Sean promises to pay his personal assistant Edie $50,000 in consideration of the services she provided over the years. D'Sean never makes the payment. D'Sean's promise is​

A)enforceable for the entire $50,000.
B)enforceable to the extent of what Edie's services were actually worth.
C)not enforceable because the consideration is in the past.
D)not enforceable because the failure to pay is an unforeseen difficulty.

Question 62

Maya's motorcycle is damaged in an accident caused by Luc's negligence. Luc agrees to pay Maya $25,000 if she agrees to release him from further liability. Maya agrees. If her damages ultimately exceed $25,000, she can​

A)recover the balance for lack of consideration.
B)recover the balance because the consideration was past.
C)recover the balance due to unforeseen events.
D)not recover the balance.

Question 63

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is​

A)liable to Niki under the concept of rescission and new contract.
B)liable to Niki under the doctrine of promissory estoppel.
C)liable to Niki under the preexisting duty rule.
D)not liable to Niki.

Question 64

On December 1, Petroleum, Inc., sent Rachel & Rico (R&R) a letter, via overnight delivery, offering to employ R&R to review Petroleum's tax situation for the current year for $10,000. In the letter, the company stated that R&R had ten days to accept. On December 5, R&R sent an e-mail message that stated, "The price for the tax analysis seems too low. Would you consider paying $15,000?" Petroleum received the message without responding immediately. The next day, Smith & Taylor, an R&R competitor, offered to conduct the appraisal for $8,000. On learning of this offer, R&R immediately e-mailed Petroleum, agreeing to do the work for $10,000. Petroleum received this message on December 7. Explain why R&R and Petroleum do, or do not, have a contract.

Question 65

Aaron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country tunes at select social events for Banquet's payment of a certain amount. To constitute consideration, the value of whatever is exchanged must be​

A)objectively worthy.
B)precisely adequate.
C)legally sufficient.
D)practically sound.Fact Pattern 8-1​ Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000.Urban Edge agrees to pay.

Question 66

Ed, a businessperson, is a friend of Fran, the owner of a Good Bean Coffee & Bagels store. Every day, Ed spends five minutes in Fran's store, looking at the goods and usually buying one or two cinnamon buns or bagels. One afternoon, Ed goes into the store, looks at the items, and picks up a $1 chocolate brownie. Ed waves the brownie at Fran without saying a word and walks out. Is there a contract? If so, how would it be classified in terms of formation, performance, and enforceability?

Question 67

A valid contract requires

A)a price and a subject.
B)a duration and termination provision.
C)an offer and an acceptance.
D)specific quality standards.

Question 68

Twyla's dock is damaged in an accident caused by Ulric's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulric fails to pay, Twyla can bring an action for breach of contract. This is​

A)a covenant not to sue.
B)an illusory promise.
C)an unforeseen difficulty.
D)a release.

Question 69

Idina admires Jude's collection of guitars. Jude says, "I plan to sell the collection when I get tired of it." Jude's statement is​

A)an offer.
B)not an offer because it has not been communicated to Idina.
C)not an offer because Jude expressed only an intent to enter into a future contract.
D)an acceptance.

Question 70

Oscar asserts that a deal he entered into with Patty to sponsor and host a motivational conference for independent sales representatives is an unenforceable contract. Defenses to the enforcement of a contract include​

A)a desire not to perform.
B)insufficient capital.
C)preliminary indications of unsatisfactory results.
D)the lack of a party's voluntary consent.

Question 71

Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have​

A)no contract.
B)an express contract.
C)an implied contract.
D)a quasi contract.

Question 72

Refer to Fact Pattern 8-1. If Teatro says it is asking for the extra $250,000 because it has encountered extraordinary unforeseen difficulties that will add considerable cost to the project, the agreement is​

A)enforceable as the consideration is past.
B)enforceable because of unforeseen difficulties.
C)unenforceable as an illusory promise.
D)unenforceable due to the preexisting duty rule.