Deck 12: Consideration

Question 1

A promise supported by past consideration is enforceable.

Answer 1

False

Question 2

Courts grant equitable remedies to those who seek to enforce grossly inadequate bargains on the grounds that such persons are entitled to the special treatment equity affords.

Answer 2

False

Question 3

A promisee's consideration must be another promise and cannot be in the form of an act.

Answer 3

False

Question 4

If Guss agrees to sell his house to Pam for $300,000,a property which is actually worth $200,000:

A)Pam can recover damages for breach of contract if Guss refuses to perform.
B)Pam will be able to get a court order for the specific performance of Guss' promise (ordering Guss to give Pam a deed to his house).
C)Guss is not entitled to equitable remedies.
D)Pam cannot recover damages for breach of contract.

Question 5

Legal value depends on the adequacy of consideration.

Question 6

When a promisee agrees not to do something he or she has a legal right to do in exchange for the promisor's promise,it constitutes legal value.

Question 7

Legal value,bargained for and given in exchange for an act or promise is called ____.

A)compensation
B)obligation
C)consideration
D)forbearance

Question 8

Which of the following statements is true for consideration?

A)It always has a monetary value,regardless of a legal value.
B)A promisee can be enforced by the courts to keep his/her promise.
C)It enforces gratuitous (free)promises.
D)It is a legal value given in exchange for an act or promise.

Question 9

As a general rule,a promise to discharge a liquidated debt for partial payment of the debt at or after its due date is unenforceable due to lack of consideration.

Question 10

As a general rule,performing a preexisting duty is not consideration.

Question 11

Under the UCC,cashing a "payment in full" check discharges the obligation of debt.

Question 12

Freedom of contract includes the freedom to make bad bargains.

Question 13

If Kate promises a stereo to Uli,which of the following holds true with regard to the idea of consideration?

A)Uli will not be able to enforce Kate's promise if he has not done anything in return.
B)Uli need not offer adequate consideration to Kate in return for her promise.
C)Kate's promise need not be supported by consideration.
D)Uli's consideration should be an act and not a promise.

Question 14

For a debt to be considered unliquidated,the dispute about the existence or amount of the debt must be in good faith.

Question 15

In determining whether a party has given consideration,courts look at whether the promises exchanged were of equal value.

Question 16

Once a binding accord and satisfaction has been entered into,parties give up their right to have a court decide their liability.

Question 17

Under the UCC,a modification of an existing contract for the sale of goods requires new consideration.

Question 18

A bilateral contract that lacks mutuality is unenforceable due to lack of consideration.

Question 19

Forbearance from suing can never be valid consideration.

Question 20

Consideration can have legal value:

A)if there is no proof of bargain between the promisor and promisee.
B)if the promisee does or agrees to do something,he or she had no prior legal duty to do,in exchange for the promisor's promise.
C)if the promisee agrees to do something he or she has a legal right to do in exchange for the promisor's promise.
D)if the promisee doesn't give up something in exchange for the promise made by the promisor.

Question 21

In general,performing a preexisting duty:

A)is consideration.
B)is not consideration.
C)is consideration only if the preexisting duty is substantial.
D)does not involve contractual duties.

Question 22

On October 29,1989,Al Glitz agrees to paint Georgia's house during the Thanksgiving week for $4,000 in exchange for Georgia's promise to pay him $4,000 in cash immediately upon completion of the work.Which of the following statements is true with regard to this case?

A)Georgia could hire another painter on October 31 without legal liability to Al because until he has painted the house,he has not given any consideration for Georgia's promise to hire him.
B)Al could back out of the deal on October 31 without legal liability to Georgia because she has not given any consideration for Al's promise to do the work until she pays him.
C)Both parties are bound on October 29 because each has given consideration for the other's promise,and neither may back out without legal liability.
D)Al could back out of the deal on October 29 without legal liability if he could prove that $4,000 was inadequate consideration to paint Georgia's house.

Question 23

Polly promises to pay city council member Smith $500 to show up for the weekly council meetings.Polly's promise is:

A)supported by consideration.
B)wholly enforceable.
C)not supported by consideration.
D)supported by conditional consideration.

Question 24

Under section 2-209 of the UCC,agreements to modify existing contracts for the sale of goods:

A)need new consideration to be binding.
B)need no new consideration to be binding.
C)require parties to formally terminate their original agreement and start over.
D)requires just an informal agreement to be enforced.

Question 25

Shoddy Roofing Company agrees to do the roofing on a building owned by Tacky Construction Company for $50,000.One week after Shoddy finishes work,over 20% of the shingles fall off due to improper installation.Tacky promises Shoddy an additional $10,000 to reinstall the fallen shingles,and Shoddy does so.Then Tacky refuses to pay Shoddy more than $50,000 for the work.Identify the true statement with regard to this situation.

A)Shoddy is not entitled to any more than $50,000 for its work.
B)Tacky owes Shoddy the additional $10,000.
C)Shoddy would still be entitled only to $50,000 if the shingles had fallen off due to an unforeseeable earthquake hitting the building.
D)Shoddy would still be entitled only to $50,000 if the parties had voluntarily cancelled their original contract and entered a new one for $60,000.

Question 26

If a professor charges extra fees to take a regularly scheduled class,it would not be taken as a consideration because:

A)such an act is prohibited by promissory estoppels.
B)such an act would violate the preexisting duty rule.
C)you have already paid your tuition fee which also includes the test fee.
D)such an act is a tort.

Question 27

Which of the following is true about preexisting duty?

A)Agreeing to perform a preexisting duty is consideration.
B)A promisor's promise not to commit a crime is consideration.
C)Promises by public officials to perform official duties are consideration.
D)Performing a preexisting duty is not consideration.

Question 28

Forbearance occurs when:

A)a debtor and two or more creditors agree to accept a stated percentage of their liquidated claims against the debtor.
B)someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration.
C)promises are worded in a way that allows the promisor to decide whether or not to perform the promise.
D)there is no dispute about the existence or the amount of the debt.

Question 29

When a contracting party runs into unforeseeable difficulties that make his/her performance impossible,courts will:

A)not enforce a modification that is not supported by new consideration.
B)prosecute the contracting party on criminal charges.
C)enforce a modification in the interest of fairness.
D)will make the contracting party pay up in full.

Question 30

Randy asked Carl to detail his brand-new sports car by painting flames on the side of the vehicle.After the parties signed a contract and after Carl had already started to paint,Randy decided that he wanted Carl to also install a new stereo system in the car.Carl sued Randy for modifying the existing contract without any prior intimation; but he lost the lawsuit because:

A)Randy's act was unenforceable for lack of consideration.
B)Randy's promise was enforceable.
C)The old contract automatically got cancelled with the addition of a new condition.
D)Carl's act was not a preexisting duty and hence of no legal value.

Question 31

Which of the following statements is true about the modification of an existing contract under the UCC?

A)It regards all contractual duties as preexisting duties.
B)If new consideration is provided to support a modification,it is unenforceable.
C)A promise to alter an existing contract for sale of goods is enforceable.
D)Unforeseeable difficulties that made performance impossible or highly impractical can make promise unenforceable.

Question 32

_____ is the legal term for settling a disputed claim.

A)Accord and satisfaction
B)Forbearance
C)Compositions
D)Promissory estoppel

Question 33

On January 1,2006 Bev owed $5,000 on her car loan.The loan was due in May 2006.On January 1,2006,Bev sent the lender a check for $4,000 marked "in full payment" of the loan.The lender cashes the check.Under these circumstances:

A)the lender can sue Bev for $1,000.
B)the lender has not promised to accept the payment as "payment in full."
C)Bev can avoid paying the $1,000.
D)Bev has not given consideration.

Question 34

Under the UCC,if the original agreement requires any modification to be in writing,an oral modification is:

A)unenforceable.
B)enforceable.
C)enforceable if the value of the goods exceeds $500.
D)unenforceable if the value of the goods exceeds $200.

Question 35

Gregg Biglieri moves into a tough Philadelphia neighborhood and opens a repair shop.He is harassed by the local gang leader who wants to extort money from him.He promises to pay Johnson,a police officer whose beat includes Gregg's store,$50 a week to "keep an eye on the store" while walking his beat.Which of the statements is true with respect to Gregg's situation?

A)The local gang leader will keep his promise of not harassing Gregg for money as long as Gregg pays him $50 a week.
B)The cop can sue Gregg for not keeping his promise of paying 50$ per week.
C)Johnson being a public officer,his duties towards Gregg is not consideration.
D)In this case,Gregg is the promisee and Johnson is the promisor.

Question 36

Which of the following statements is true about unliquidated debts?

A)The amount being due and certain,a promise to pay less lacks consideration.
B)Some courts allow collection of the remainder if checks marked "payment in full" are cashed without reservation.
C)Since the amount is genuinely in dispute,an agreement resulting in accord and satisfaction is enforceable.
D)Composition agreements are an exception to unliquidated debts and can be enforced without additional consideration.

Question 37

Lou enters into an agreement with LaFancy,a wedding planning company,to coordinate her June wedding for the sum of $10,000.In March,Lou calls LaFancy to tell the company the deal is off,because she thinks she can do a better job herself.LaFancy sues Lou,and Lou argues lack of consideration as a defense.Which of the following statements is correct?

A)LaFancy has given consideration.
B)LaFancy had a legal duty to plan Lou's wedding even before the agreement was signed.
C)Lou can enforce LaFancy's promise to her.
D)Lou has given consideration.

Question 38

If the amount of a debt is "due and certain":

A)a promise to pay less than the amount lacks consideration.
B)the debt is considered to be an unliquidated debt.
C)there is a dispute about the existence of the debt.
D)a promise to pay more than the amount lacks consideration.

Question 39

Composition agreements are:

A)made in a way that allows the promisor to decide whether or not to perform the promise.
B)agreements between a debtor and two or more creditors who agree to accept a stated percentage of their liquidated claims against the debtor at or after the due date.
C)agreements entered into when someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration.
D)agreements between a debtor and a creditor who agree to accept a stated percentage of their liquidated claims against the debtor after the due date.

Question 40

An unliquidated debt is defined as:

A)one that has not been paid in full.
B)one that involves an honest dispute about the existence or amount of the debt.
C)one that is unenforceable due to lack of consideration.
D)one that is due and certain with no dispute about the existence or the amount of the debt.

Question 41

Watten Construction contracted to build the Sillimans a house for $50,000.When Watten began digging the foundation,it hit bedrock,which was highly unusual in that area.Watten told the Sillimans that he required an extra $5000 to build the house.The Sillimans agreed,but when the house was done,refused to pay Watten any more than the original contract price.What can be the outcome if Watten sues the Sillimans for the extra $5000 and why?

Question 42

Past consideration is sometimes accepted for ____.

A)official duties
B)for legal obligations
C)moral obligations
D)charitable donations

Question 43

According to the rule of _____ if a promisee's performance was rendered before the promisor's promise was made,then it can never serve as consideration,even though it may meet the "legal value" part of the test.

A)past consideration
B)preexisting duty
C)forbearance
D)promissory estoppel

Question 44

Abel had grown tired of working on the family farm and was considering moving away.However,his parents told him "If you'll stay and help us,we'll leave you the farm when we die." As a result,Abel decided to stay on the farm and worked there for the next twenty years.However,when his parents finally died Abel learned that they had left the farm to his brother,Mark.Abel filed suit against his parents' estate to enforce their promise of leaving him the farm.Which of the following is a true statement?

A)Abel gave no consideration for his parents' promise to leave him the farm,so their promise is not enforceable against the estate.
B)The work that Abel did on the farm before his parents made their promise is sufficient consideration to make their promise enforceable.
C)Abel's parents' promise is not enforceable because it was illusory.
D)Abel's parents' promise is enforceable under a promissory estoppel theory.

Question 45

Explain an illusory promise and provide an example.

Question 46

Which of the following,used to enforce promises,is supported by consideration?

A)Illusory promise
B)Preexisting duty
C)Charitable subscriptions
D)Past consideration

Question 47

Explain forbearance to sue in relation to consideration.

Question 48

Which of the following is worded in a way that allows the promisor to decide whether or not to perform the promise?

A)Novations
B)Compositions
C)Illusory promises
D)Modifications

Question 49

Explain the difference between a liquidated and an unliquidated debt.

Question 50

Explain with an example how promissory estoppel affects consideration?