Deck 10: Consideration

Question 1

If additional work is needed for an existing contractual duty due to unforeseen circumstances,the promise for the additional work cannot be valid consideration for a new agreement.

Answer 1

False
Explanation: An exception to the preexisting-duty rule is that if additional work is needed for an existing contractual duty due to unforeseen circumstances,the promise for the additional work may be valid consideration for a new agreement.

Question 2

A court will enforce one party's promise only if the other party promised something in exchange.

Answer 2

True
Explanation: For a promise to be enforced by the courts,there must be consideration.A court will enforce one party's promise only if the other party promised something in exchange.

Question 3

Consideration is what a person will receive in return for ________.

A)performing a contact obligation
B)promising to make a gift
C)performing an ethical obligation
D)promising to perform an ethical obligation
E)making a firm offer

Answer 3

A
Explanation: Consideration is what a person will receive in return for performing a contract obligation.

Question 4

Promissory estoppel is the legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract.

Question 5

Because consideration is an essential element of contract formation and enforcement,the court always considers the adequacy of consideration.

Question 6

Past consideration is no consideration at all.

Question 7

In a bilateral contract,the consideration for each promise is a return promise.

Question 8

Consideration is the thoughtfulness,as measured by an objective standard of reasonableness,a person exhibits as he or she carries out contractual obligations.

Question 9

In an unliquidated debt,there is no dispute about the fact that money is owed and the amount of money owed.

Question 10

According to UCC Section 3-311,if a business inadvertently cashes a paid-in-full check,the business has six months from the date it cashed the check to offer repayment in the same amount to the debtor and thereby avoid an enforceable accord and satisfaction.

Question 11

An accord and satisfaction is an arrangement between contracting parties whereby one of the parties substitutes a different performance for his or her original duty under the contract.

Question 12

For a court to enforce a promise,both parties must give consideration.

Question 13

Promissory estoppel is an exception to the rule requiring consideration.

Question 14

In a unilateral contract,one party's consideration is a promise and the other party's consideration is an act.

Question 15

The debt must be liquidated for the parties to enter into an enforceable accord and satisfaction.

Question 16

Suppose that Eduardo agrees to purchase Caleah's car for $10,000.Eduardo's payment of $10,000 is the ________ Caleah will receive for her car.

A)consideration
B)offer
C)conditional offer
D)invitation to negotiate
E)forbearance

Question 17

A promise to do something that you are already obligated to do is not valid consideration.

Question 18

Forbearance is the failure to perform contractual duties.

Question 19

Forbearance is not sufficient consideration for a valid and enforceable contract.

Question 20

An illusory promise is not consideration.

Question 21

________ is the legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract.

A)Forbearance
B)Promissory estoppel
C)Res ipsa loquitur
D)Res judicata
E)Mutual exclusivity

Question 22

Which of the following is an exception to the rule requiring consideration?

A)Bilateral contracts
B)Promissory estoppel
C)Unilateral contracts
D)Forbearance
E)Specific performance

Question 23

Which of the following would not be considered an example of consideration?

A)A promise to stay in a job until a particular project is completed.
B)A promise to take care of your elderly grandmother in return for her payment to you of $2,000 per month.
C)A promise to settle a sexual harassment case you filed against your supervisor and employer.
D)A promise to stop drinking alcohol during exam week (assuming you are of legal drinking age).
E)A promise to pay your employees as required by law.

Question 24

For a promise to be enforced by the courts,there must be ________.

A)a written contract
B)forbearance
C)an invitation to negotiate
D)consideration
E)a bilateral contract

Question 25

In the Hamer v.Sidway case cited in the textbook,the New York Court of Appeals concluded that:

A)Consideration is not required to enforce an otherwise valid,bargained-for exchange.
B)A benefit to the promisor constitutes valid consideration,but a detriment to the promisee does not constitute valid consideration.
C)Forbearance is sufficient consideration for a valid and enforceable contract.
D)A detriment to the promisee constitutes valid consideration,but a benefit to the promisor does not constitute valid consideration.
E)Forbearance does not satisfy the consideration requirement for a valid and enforceable contract.

Question 26

Which of the following is a correct statement regarding illusory promises?

A)Illusory promises are not consideration.
B)Illusory promises are consideration.
C)Illusory promises qualify as consideration when past consideration is at issue.
D)Illusory promises qualify as consideration when promissory estoppel is at issue.
E)Illusory promises can constitute consideration,but only when a sale of goods is involved.

Question 27

An example of forbearance is ________.

A)selling assets to avoid payment to creditors
B)one party making a promise,knowing the other party will rely on it
C)refraining from the use of liquor,assuming the promisor is of legal drinking age
D)a promise to do something that you are already obligated to do
E)past consideration

Question 28

Courtney,who does not keep up with the price of current technology,agrees to buy a used computer from Jake for $2,500.Later,Courtney's friend Brice tells Courtney that she made a terrible deal and that she could get a better,new computer for no more than $1,000.Courtney tells Jake that she is not giving him any money because he has not been fair to her in terms of the computer price.Which of the following is the most likely result if Jake sues Courtney alleging breach of contract?

A)Jake will win,but only if he can establish that the $2,500 price was actually reasonable.
B)Jake will win because the court will not weigh whether a good bargain was made.
C)Courtney will win if she can establish that she paid at least 75% more than the computer was actually worth.
D)Courtney will win if she can establish that she paid at least 50% more than the computer was actually worth.
E)Courtney will win if she can establish that she made a bad deal and that she was not actually aware of the current prices of both new and old computers.

Question 29

A promise to do something that you are already obligated to do is ________.

A)valid consideration because it is illusory consideration
B)valid consideration,but only in the employment context
C)valid consideration because it is past consideration
D)valid consideration,but only if a sale of goods transaction invoking the applicability of the Uniform Commercial Code (UCC)is involved
E)not valid consideration

Question 30

When would a court consider the adequacy of consideration?

A)To verify that property was sold at its fair market value.
B)To verify that a sale of assets was not done to avoid payment to creditors.
C)To verify that one party gave a promise in return for the act of another party.
D)To verify that each party gave a valid promise to the other party.
E)When one party has promised forbearance as consideration.

Question 31

In a unilateral contract,the consideration for a promise is ________.

A)an act
B)a return promise
C)forbearance
D)an invitation to negotiate
E)a counteroffer

Question 32

Which of the following is true regarding the adequacy of consideration?

A)Courts generally consider the adequacy of consideration in determining whether to enforce a contract.
B)Courts consider the adequacy of consideration,but only if something is sold for less than 75% of its market value.
C)Courts consider the adequacy of consideration,but only if something is sold for less than 50% of its market value.
D)Courts consider the adequacy of consideration,but only if something is sold for less than 25% of its market value.
E)Courts seldom consider the adequacy of consideration,but will do so if an item was sold for a low sum in order to avoid claims of creditors.

Question 33

Forbearance is defined as:

A)An invitation to negotiate.
B)An offer.
C)A counteroffer.
D)A bilateral contract.
E)Promising to refrain from doing something you are legally entitled to do.

Question 34

________ must pledge consideration for an agreement to be enforceable in the courts.

A)Only the offeror
B)Only the offeree
C)Only the assignor
D)Both the offeree and the assignor
E)Both the offeror and the offeree

Question 35

Which of the following constitute(s)consideration?

A)A benefit to the promisor,but not a detriment to the promisee.
B)A detriment to the promisee,but not a benefit to the promisor.
C)A promise to do something,a benefit to the promisor,or a detriment to the promisee.
D)An invitation to negotiate.
E)A valid counteroffer.

Question 36

Which of the following is a correct statement regarding past consideration?

A)It is not consideration that will support a binding contract.
B)It is consideration that will support a binding contract.
C)It is consideration that can support a binding contract,but only in a transaction that relates to the employment setting.
D)It is consideration that can support a binding contract,but only in a transaction that concerns the provision of services.
E)It is consideration that can support a binding contract,but only in a commercial context.

Question 37

In a bilateral contract,the consideration for each promise is ________.

A)an invitation to negotiate
B)forbearance
C)actually doing the act called for in the contract
D)a return promise
E)refraining from doing something the contracting party is otherwise legally entitled to do

Question 38

Suppose that Dakiyah promises to pay Fernando $300 for his television.Fernando promises to sell Dakiyah his television for $300.The parties have not documented the transaction in writing.Which of the following is an accurate statement regarding this arrangement?

A)There is no contract between the parties because the promises are not in writing.
B)This is a unilateral contract.
C)This is merely an invitation to negotiate.
D)There is an oral contract.
E)Dakiyah's promise constitutes an offer,while Fernando's promise is a counteroffer.

Question 39

Sam offers Betty his bicycle for $75.Which of the following is an example of an illusory promise on the part of Betty?

A)"I'll take it."
B)"I'll take it if I decide to do so."
C)"I won't pay $75,but I will pay $50."
D)"I'll take it if you will let me try it out first and the brakes work well."
E)"I'll take it if you will put new tires on it first."

Question 40

In the Smith v.Riley case referenced in the textbook,how did the Tennessee Court of Appeals rule regarding whether a purchase for "the sum of One Dollar ($1.00)and other good and valuable consideration" was sufficient consideration to support an agreement?

A)The Court ruled that the purchase amount was sufficient consideration.
B)The Court ruled that the purchase amount was insufficient consideration,but only because the sale of an interest in a lease was involved.
C)The Court ruled that the purchase amount was insufficient consideration,but only because a sale of goods was involved.
D)The Court ruled that the purchase amount was insufficient consideration,but only because a domestic partnership was involved.
E)The Court ruled that the purchase amount was insufficient consideration because over $50,000 was at issue.

Question 41

Garage sale.Richard,who is cleaning out his garage,offers to sell Dawn a used computer for $200.Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book.She is excited to receive the book and tells him that she will pick it up the next day.Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day.Meanwhile,Sam comes to visit,offers Richard $20 for the business law book and Richard sells it to him.Sam also offers Richard $50 for the used computer.Richard sells it to Sam because he does not expect to hear from Dawn.Sam sees the communications book and offers Richard $60 for it.Richard decides to forget about Jill and proceeds to sell the book to Sam for $60.Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer.Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her.Exactly 31 days later,Dawn tells Richard that she would like the computer.She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision.Richard tells Sam that he needs to return everything for a full refund.Sam refuses.Which of the following best describes Dawn's statement that she would think about it and buy the computer if she decided to do so?

A)It is an illusory promise.
B)It is a valid promise.
C)It is a promise sufficient to require Richard to consult with her prior to selling the computer to someone else.
D)It is a promise sufficient to require Richard to consult with her prior to selling the computer to someone else,but only for 30 days.
E)It is a real promise.

Question 42

Garage sale.Richard,who is cleaning out his garage,offers to sell Dawn a used computer for $200.Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book.She is excited to receive the book and tells him that she will pick it up the next day.Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day.Meanwhile,Sam comes to visit,offers Richard $20 for the business law book and Richard sells it to him.Sam also offers Richard $50 for the used computer.Richard sells it to Sam because he does not expect to hear from Dawn.Sam sees the communications book and offers Richard $60 for it.Richard decides to forget about Jill and proceeds to sell the book to Sam for $60.Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer.Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her.Exactly 31 days later,Dawn tells Richard that she would like the computer.She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision.Richard tells Sam that he needs to return everything for a full refund.Sam refuses.Which of the following is true regarding Dawn's statement that her response was sufficient consideration to bind Richard to an option contract and that he should have awaited her final decision?

A)Dawn is correct.Her statement bound him to an option contract,and he should have awaited her final decision.
B)Dawn is incorrect in that her response bound Richard to an option contract,but she is correct that he should have awaited her final decision.
C)Dawn is correct that her response bound Richard to an option correct,but she is incorrect that he should have awaited her final decision.
D)Dawn is correct that her statement bound him to an option contract,but he should have awaited her final decision only if she can prove that they have had significant business dealings in the past.
E)Dawn is incorrect on both counts.Her statement did not create an option contract nor was Richard bound to await her final decision.

Question 43

Which of the following is an exception to the preexisting-duty rule?

A)Foreseeable circumstances
B)Contracts not covered by the Uniform Commercial Code (UCC)
C)Service contracts
D)Additional work
E)Contracts that do not involve a sale of goods

Question 44

In a(n)________ debt,there is no dispute about the fact that money is owed and the amount of money owed.

A)actual
B)acknowledged
C)certain
D)liquidated
E)unliquidated

Question 45

Yolanda agrees to bathe and groom Wendy's dog Fluffy for $20.Yolanda agreed to the price before seeing Fluffy,a very plump,grouchy Pembroke Welsh Corgi dog with lots of hair.Yolanda tells Wendy that if she is going to groom Fluffy,the price will be $30.Wendy agrees but exclaims in exasperation that the dog is,after all,named "Fluffy!" Yolanda bathes and grooms Fluffy,but Wendy will only pay $20.Which of the following is correct regarding Yolanda's entitlement to the extra $10?

A)Yolanda is entitled to the extra $10 because a valid bilateral contract existed.
B)Yolanda is entitled to the extra $10 because a valid unilateral contract existed.
C)Assuming the unforeseen circumstances rule is inapplicable,Yolanda is not entitled to the extra $10 because she had a preexisting duty to bathe and groom Fluffy for $20.
D)Assuming the unforeseen circumstances rule is inapplicable,Yolanda is not entitled to the extra $10 because Wendy's promise to pay $30 was illusory.
E)Assuming the unforeseen circumstances rule is inapplicable,Yolanda is not entitled to the extra $10 because past consideration was involved.

Question 46

Marcy's Mom.Marcy's mother,Sue,did not want her to date until she was older.She also wanted Marcy to attend law school.Just before Marcy started her freshman year in college,Sue told Marcy that if Marcy would refrain from dating until she received her law degree,then Sue would pay off all of Marcy's school loans and throw in an extra $50,000.Marcy agrees and states,"Thanks,Mom,and by the way,when I graduate I'm throwing you a big party for all you've done for me!" Sue smiles and hugs Marcy.Marcy finished law school and asked for payment of her loans,the $50,000 in cash,and for a car.Sue said,"No way - I know you went out on some dates during law school,and I never agreed on the car." Marcy said those were just study nights and that her mother had never objected to Marcy's frequent statements that she wanted a car upon graduation.Sue asks about the party.Marcy tells her that she is nuts because there is no way Marcy can afford a party since Sue has backed out of the deal.After some serious negotiation Marcy and Sue settled their dispute with Sue agreeing to pay for half of Marcy's school loans and for all the expenses of Marcy's upcoming wedding,and to forget about Marcy's throwing a party for her.Was the agreement between Marcy and Sue that Sue would pay Marcy's school loans and throw in an extra $50,000 if Marcy refrained from dating until she received a law degree sufficiently supported by consideration?

A)Yes,sufficient consideration existed to support the agreement.
B)No,because the agreement involved an exchange of illusory promises.
C)No,because refraining from dating and going to school does not have monetary value and,therefore,does not constitute valid consideration.
D)No,because close relatives are involved.
E)No,because the consideration was inadequate.

Question 47

Sally goes to have her hair trimmed and agrees to pay $40 to the stylist.While there,Sally decides that she would also like highlights.The stylist informs her that highlights will cost an additional $30.Sally agrees to the price,gets the highlights,but refuses to pay the extra amount.What is the likely result in a dispute between Sally and the stylist,and why?

A)The stylist will win because she did additional work in exchange for the extra payment; therefore,Sally's promise was supported by valid consideration.
B)The stylist will win because she did additional work in exchange for the extra payment; therefore,a valid unilateral contract existed.
C)The stylist will win unless Sally can show that she had previously received both a trim and highlights for $40.If she can prove that she previously received both for $40,the "past expectations" rule applies.
D)Sally will win because the stylist had a preexisting duty to have her hair looking its finest.
E)Sally will win because there was no valid consideration given in exchange for the highlighting.

Question 48

Bank Robbery.Victor robbed Safe Bank of a significant sum of cash.Safe Bank offered a reward of $10,000 for anyone who captured or provided information leading to the capture of Victor.Ted,a police officer in town,promised Safe Bank officials that he would apprehend Victor.While on duty,Ted arrested Victor at a hamburger joint in town.He found Victor based upon a hunch he had after Ursula,who dated Victor,told him about various places Victor enjoyed eating.The bank refuses to pay either Ursula or Ted any of the reward money.In a lawsuit between the bank and Ted,regarding the reward funds,who is likely to prevail and why?

A)The bank is likely to prevail because Ted only provided past consideration.
B)The bank is likely to prevail because Ted had a preexisting duty to catch Victor.
C)The bank is likely to prevail because Ted's promise to catch Victor was an illusory promise.
D)Ted is likely to prevail because his promise to catch Victor resulted in a binding bilateral contract.
E)Ted is likely to prevail because an enforceable unilateral contract arose from his performance.

Question 49

Garage sale.Richard,who is cleaning out his garage,offers to sell Dawn a used computer for $200.Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book.She is excited to receive the book and tells him that she will pick it up the next day.Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day.Meanwhile,Sam comes to visit,offers Richard $20 for the business law book and Richard sells it to him.Sam also offers Richard $50 for the used computer.Richard sells it to Sam because he does not expect to hear from Dawn.Sam sees the communications book and offers Richard $60 for it.Richard decides to forget about Jill and proceeds to sell the book to Sam for $60.Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer.Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her.Exactly 31 days later,Dawn tells Richard that she would like the computer.She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision.Richard tells Sam that he needs to return everything for a full refund.Sam refuses.Which of the following is true regarding Denise's claim that Richard breached a contract with her because Richard did not save the book for her after she had accepted his offer?

A)Denise is correct,and Richard breached the contract he had with her.
B)Denise is correct,but only if she can show that she had given past consideration in other dealings with Richard.
C)Denise is correct,but only if she can show that Richard did not really need the money.
D)Denise is incorrect because her acceptance was illusory.
E)Denise is incorrect because she did not provide any consideration.

Question 50

Bank Robbery.Victor robbed Safe Bank of a significant sum of cash.Safe Bank offered a reward of $10,000 for anyone who captured or provided information leading to the capture of Victor.Ted,a police officer in town,promised Safe Bank officials that he would apprehend Victor.While on duty,Ted arrested Victor at a hamburger joint in town.He found Victor based upon a hunch he had after Ursula,who dated Victor,told him about various places Victor enjoyed eating.The bank refuses to pay either Ursula or Ted any of the reward money.In a lawsuit between the bank and Ursula,regarding the reward funds,who is likely to prevail and why?

A)The bank is likely to prevail because Ursula only provided past consideration.
B)The bank is likely to prevail because Ursula was tainted by being Victor's girlfriend.
C)The bank is likely to prevail because no valid bilateral contract existed.
D)Ursula is likely to prevail because a valid bilateral contract existed.
E)Ursula is likely to prevail because an enforceable unilateral contract exists based on her provision of information leading to the capture of Victor.

Question 51

Garage sale.Richard,who is cleaning out his garage,offers to sell Dawn a used computer for $200.Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book.She is excited to receive the book and tells him that she will pick it up the next day.Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day.Meanwhile,Sam comes to visit,offers Richard $20 for the business law book and Richard sells it to him.Sam also offers Richard $50 for the used computer.Richard sells it to Sam because he does not expect to hear from Dawn.Sam sees the communications book and offers Richard $60 for it.Richard decides to forget about Jill and proceeds to sell the book to Sam for $60.Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer.Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her.Exactly 31 days later,Dawn tells Richard that she would like the computer.She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision.Richard tells Sam that he needs to return everything for a full refund.Sam refuses.Which of the following is true regarding Jill's claim that by selling the communications book for a higher price,Richard breached the contract he had with her?

A)Jill is correct.
B)Jill is correct,but only if she can establish that she had prior dealings with Richard.
C)Jill is correct,but only if she can establish that she had provided past consideration in addition to the amount she agreed to pay for the book.
D)Jill is incorrect because her acceptance was illusory.
E)Jill is incorrect because the amount she agreed to pay was significantly less than the fair market value of the book; as a result,it did not constitute valid consideration.

Question 52

Which of the following is a valid Uniform Commercial Code (UCC)rule regarding checks marked "paid-in-full"?

A)If a business inadvertently cashes a check marked "paid-in-full," the business has 30 days from the date it cashed the check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
B)If a business inadvertently cashes a check marked "paid-in-full," the business has 60 days from the date it cashed the check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
C)If a business inadvertently cashes a check marked "paid-in-full," the business has 90 days from the date it cashed the check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
D)If a business inadvertently cashes a check marked "paid-in-full," the business has 120 days from the date it cashed the check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
E)If a business inadvertently cashes a check marked "paid-in-full," the business has no recourse,and the debt is legally satisfied and discharged.

Question 53

Which of the following is a valid accord and satisfaction?

A)A dispute over an unliquidated debt is settled and paid for less than the full amount.
B)A dispute over a liquidated debt is settled and paid for less than the full amount.
C)A dispute over an unliquidated debt is settled and paid for the full amount.
D)A dispute over a liquidated debt is settled and paid for the full amount.
E)A dispute over either an unliquidated or liquidated debt is settled and paid for less than the full amount.

Question 54

When an accord and satisfaction is at issue,the ________ is the payment,by the debtor,of the reduced amount.

A)satisfaction
B)accord
C)both satisfaction and accord
D)fund transfer
E)bond

Question 55

Bank Robbery.Victor robbed Safe Bank of a significant sum of cash.Safe Bank offered a reward of $10,000 for anyone who captured or provided information leading to the capture of Victor.Ted,a police officer in town,promised Safe Bank officials that he would apprehend Victor.While on duty,Ted arrested Victor at a hamburger joint in town.He found Victor based upon a hunch he had after Ursula,who dated Victor,told him about various places Victor enjoyed eating.The bank refuses to pay either Ursula or Ted any of the reward money.Which of the following is true regarding the offer of the reward?

A)It was made in the context of a bilateral contract that could only be accepted by the offeree's promise as consideration.
B)It was made in the context of a bilateral contract that could only be accepted by the offeree's performance as consideration.
C)It was made in the context of a bilateral contract that could be accepted by the offeree's promise or performance as consideration.
D)It was made in the context of a unilateral contract that could only be accepted by the offeree's promise as consideration.
E)It was made in the context of a unilateral contract that could only be accepted by the offeree's performance as consideration.

Question 56

A new agreement to pay less than the creditor claims is owed is called a(n)________.

A)satisfaction
B)accord
C)voluntary dismissal without prejudice
D)written compromise
E)written acknowledgement

Question 57

Which of the following is true regarding a valid accord and satisfaction?

A)When the amount agreed upon is paid,the debt is fully discharged.
B)When the amount agreed upon is paid,the debt is fully discharged except for any late charges due under the original agreement.
C)When the amount agreed upon is paid,the debt is fully discharged except for any interest due under the original agreement.
D)When the amount agreed upon is paid,the debt is fully discharged except for any late charges and any interest due under the original agreement.
E)When the amount agreed upon is paid,the debt is fully discharged except for any late charges or interest due under the original agreement,or for any reasonable attorney's fees the creditor has accumulated in his or her attempt to collect the debt.

Question 58

Garage sale.Richard,who is cleaning out his garage,offers to sell Dawn a used computer for $200.Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book.She is excited to receive the book and tells him that she will pick it up the next day.Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day.Meanwhile,Sam comes to visit,offers Richard $20 for the business law book and Richard sells it to him.Sam also offers Richard $50 for the used computer.Richard sells it to Sam because he does not expect to hear from Dawn.Sam sees the communications book and offers Richard $60 for it.Richard decides to forget about Jill and proceeds to sell the book to Sam for $60.Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer.Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her.Exactly 31 days later,Dawn tells Richard that she would like the computer.She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision.Richard tells Sam that he needs to return everything for a full refund.Sam refuses.Which of the following is true regarding the dispute between Richard and Sam regarding whether Sam must return anything?

A)Sam must return the computer only.
B)Sam must return the business law book only.
C)Sam must return the communications book only.
D)Sam must return the computer,the business law book,and the communications book.
E)Sam does not legally have to return anything.

Question 59

In a(n)________ debt,the parties either dispute the fact that any money is owed or agree that some money is owed but dispute the amount.

A)disputed
B)unacknowledged
C)uncertain
D)liquidated
E)unliquidated

Question 60

Which of the following is a correct statement regarding whether an accepted offer to satisfy a debt by paying only part is consideration?

A)Partial payment is consideration under all circumstances.
B)Partial payment is not consideration under any circumstances.
C)Partial payment is consideration if a liquidated debt is involved.
D)Partial payment is consideration if an unliquidated debt is involved.
E)Partial payment is consideration,but only if a liquidated or unliquidated debt is involved.

Question 61

Define the terms liquidated debt and unliquidated debt,and discuss when an accord and satisfaction is enforceable.

Question 62

Marcy's Mom.Marcy's mother,Sue,did not want her to date until she was older.She also wanted Marcy to attend law school.Just before Marcy started her freshman year in college,Sue told Marcy that if Marcy would refrain from dating until she received her law degree,then Sue would pay off all Marcy's school loans and throw in an extra $50,000.Marcy agrees and states,"Thanks,Mom,and by the way,when I graduate I'm throwing you a big party for all you've done for me!" Sue smiles and hugs Marcy.Marcy finished law school and asked for payment of her loans,the $50,000 in cash,and for a car.Sue said,"No way - I know you went out on some dates during law school,and I never agreed on the car." Marcy said those were just study nights and that her mother had never objected to Marcy's frequent statements that she wanted a car upon graduation.Sue asks about the party.Marcy tells her that she is nuts because there is no way Marcy can afford a party since Sue has backed out of the deal.After some serious negotiation Marcy and Sue settled their dispute with Sue agreeing to pay for half of Marcy's school loans and for all the expenses of Marcy's upcoming wedding,and to forget about Marcy's throwing a party for her.Was there sufficient consideration to support Marcy's agreement to throw a party for Sue?

A)Yes,sufficient consideration was present.
B)No,there was insufficient consideration because Sue did not promise anything in exchange.
C)No,there was insufficient consideration because Marcy's agreement was illusory.
D)No,because throwing a party does not have monetary value and,therefore,does not constitute valid consideration.
E)No,because close relatives are involved.

Question 63

Define and discuss promissory estoppel,and give an example of when it would be applied.

Question 64

Marcy's Mom.Marcy's mother,Sue,did not want her to date until she was older.She also wanted Marcy to attend law school.Just before Marcy started her freshman year in college,Sue told Marcy that if Marcy would refrain from dating until she received her law degree,then Sue would pay off all Marcy's school loans and throw in an extra $50,000.Marcy agrees and states,"Thanks,Mom,and by the way,when I graduate I'm throwing you a big party for all you've done for me!" Sue smiles and hugs Marcy.Marcy finished law school and asked for payment of her loans,the $50,000 in cash,and for a car.Sue said,"No way - I know you went out on some dates during law school,and I never agreed on the car." Marcy said those were just study nights and that her mother had never objected to Marcy's frequent statements that she wanted a car upon graduation.Sue asks about the party.Marcy tells her that she is nuts because there is no way Marcy can afford a party since Sue has backed out of the deal.After some serious negotiation Marcy and Sue settled their dispute with Sue agreeing to pay for half of Marcy's school loans and for all the expenses of Marcy's upcoming wedding,and to forget about Marcy's throwing a party for her.In reaching a settlement,Marcy and Sue entered into a(n)________.

A)partial payment agreement
B)promissory estoppel
C)settlement and affiliation
D)agreement and payment
E)accord and satisfaction

Question 65

Frank is building a home for Debby that under the original contract is to be completed by December 31.Debby found the plans for the home in a publication focusing on unique houses and is excited because it will be the only home of its type in the area.Because he underestimated the time needed for special and unique framing required for Debby's house,Frank tells Debby that he needs to hire additional workers in order to have the home done by that time and that she needs to pay him an extra $10,000.Debby says that she will pay.Frank finishes the home and asks for his $10,000.Debby refuses to pay.What is the likely result if Frank sues? Discuss whether you believe the result is ethical and equitable.

Question 66

Do you believe that in order to enforce a contract,the law should require a party to give consideration that is similar to or equal in value to what they will receive from the other party? Discuss why or why not.

Question 67

Henry's boss,Jacob,tells Henry that because he has been such a valuable employee,he will receive an extra week of vacation.When Henry decides to schedule the vacation,he reminds Jacob of his statement.Jacob says that he has changed his mind and that he really cannot afford to let Henry take the extra vacation time.Henry says that Jacob has breached the contract he had with Jacob for an extra vacation week.Who is right and why?

Question 68

Marcy's Mom.Marcy's mother,Sue,did not want her to date until she was older.She also wanted Marcy to attend law school.Just before Marcy started her freshman year in college,Sue told Marcy that if Marcy would refrain from dating until she received her law degree,then Sue would pay off all Marcy's school loans and throw in an extra $50,000.Marcy agrees and states,"Thanks,Mom,and by the way,when I graduate I'm throwing you a big party for all you've done for me!" Sue smiles and hugs Marcy.Marcy finished law school and asked for payment of her loans,the $50,000 in cash,and for a car.Sue said,"No way - I know you went out on some dates during law school,and I never agreed on the car." Marcy said those were just study nights and that her mother had never objected to Marcy's frequent statements that she wanted a car upon graduation.Sue asks about the party.Marcy tells her that she is nuts because there is no way Marcy can afford a party since Sue has backed out of the deal.After some serious negotiation Marcy and Sue settled their dispute with Sue agreeing to pay for half of Marcy's school loans and for all the expenses of Marcy's upcoming wedding,and to forget about Marcy's throwing a party for her.What type of alleged debt was involved in the dispute between Marcy and Sue involving the school loans,additional funds,car,and party?

A)Liquidated
B)Unliquidated
C)Supported
D)Unsupported
E)Liquidated in relation to the school loans,additional funds,and car; and unsupported in relation to the party.