Deck 10: Consideration

Question 1

The promisor may make a promise to pay a sum of money to the promisee for the performance of a certain act.

Answer 1

True

Question 2

Valid consideration must be either the performance of an act or the payment of money.

Answer 2

False

Question 3

A pledge or a subscription, which is a promise to donate money, is unenforceable.

Answer 3

False

Question 4

The Uniform Commercial Code dispenses with the requirement of consideration in certain contracts that involve a merchant's written firm offer that provides that the contract is irrevocable.

Question 5

Consideration in a contract may be more than just the promises exchanged by the parties; it may include the actual benefit gained and the detriment suffered by them.

Question 6

The most common form of valid consideration is the promise of money by one party for the promise of an act by another.

Question 7

Statutes, in some states, have permitted a person who has a claim against another to give up, or release, his or her claim without an exchange of consideration by making a written statement to that effect.

Question 8

Sometimes the unequal bargaining power of parties to a contract gives one party an unfair advantage when dealing with those who lack the economic power to enter into a contract on an equal footing.

Question 9

Contracts in which the parties have unequal bargaining power are known as unconscionable contracts.

Question 10

The promises exchanged by the parties to a contract, either to give up something of value they have a legal right to keep, such as money or property; to do something they are not otherwise legally required to do, such as performing a service; or to refrain from an action is known as:

A) competence of parties.
B) offer and acceptance.
C) mutual agreement.
D) consideration.

Question 11

Many consumer protection statutes have been passed that recognize some of the problems associated with unconscionable contracts and contracts of adhesion.

Question 12

Contracts based on moral consideration are generally enforceable.

Question 13

Jack promised to pay his nineteen year-old nephew $300 on the nephew's twenty-second birthday if the nephew refrained from smoking cigarettes until he graduated from Western State College. This contract is legal and illustrates the promise of:

A) pledge or subscription.
B) forbearance as consideration.
C) general release.
D) implied contract.

Question 14

The exchange of money is a mandatory requirement for a consideration.

Question 15

Many contracts, in which part of the consideration is forbearance, involve agreements not to compete.

Question 16

The promise to refrain from doing something that a party has a legal right to do, or the promise of inaction, is known as:

A) forbearance.
B) consideration.
C) general release.
D) pledge or subscription.

Question 17

Past consideration is a promise to repay someone for a benefit before it has been received.

Question 18

Consideration required in an enforceable contract can take various forms such as exchange of promises, forbearance, and pledges or subscriptions.

Question 19

With regard to pledges and subscriptions, some courts have held that the consideration given by a charitable institution is the promise to use the money for the purpose for which it was donated.

Question 20

A valid contract may exist even if the consideration is a promise to perform an illegal act, or to avoid performing an act that is legally required to be performed.

Question 21

Statutes in many states have permitted a person who has a claim against another to give up, or release, his or her claim without an exchange of consideration by making a:

A) written statement to that effect.
B) soliloquy to that effect.
C) modification.
D) complaint to that effect.

Question 22

Courts may justify the enforcement of some contracts, even though there is no consideration, by stating that there was:

A) monetary consideration.
B) moral consideration.
C) pecuniary consideration.
D) fiscal consideration.

Question 23

The obligation to perform acts already required is known as a:

A) pious obligation.
B) preexisting duty.
C) social obligation.
D) contractual duty.

Question 24

The three essential characteristics of valid consideration are:

A) accuracy, brevity, and clarity.
B) fulfillment of social, moral and ethical obligations.
C) legality, adequacy, and the possibility of performance.
D) intention, practices, and policies.

Question 25

The UCC provides that "any claim or right arising out of an alleged breach can be discharged in whole or in part without consideration by a written waiver or renunciation signed and delivered by the aggrieved party." Such a written agreement is called a:

A) general release.
B) mutual release.
C) barren promise.
D) preexisting duty.

Question 26

A legally enforceable contract will not be enforced if it:

A) is impossible to fulfill.
B) is inconvenient to fulfill.
C) is difficult to fulfill.
D) poses unforeseen expenses.

Question 27

A valid contract does not exist if the contract is a promise of/to:

A) payment.
B) provide services.
C) forbearance.
D) perform an illegal act.

Question 28

A promise to do something that one is already required to do either by law or by contract represents no additional sacrifice and is:

A) a general release.
B) an illegal act.
C) not valid consideration.
D) fraudulent.

Question 29

A promise of an act by one party in exchange for the promise of an act by another is an example of:

A) a void contract.
B) a valid offer and acceptance.
C) valid consideration.
D) a voidable contract.

Question 30

A promise to pay an existing debt or to obey the law, or a similar promise, is called a:

A) pledge.
B) gratuitous promise.
C) preexisting duty.
D) barren promise.

Question 31

The Uniform Commercial Code dispenses with the requirement for consideration in contracts that involve:

A) a merchant's firm written offer of an irrevocable contract.
B) an oral discharge of a claim for an alleged breach of contract.
C) modifications on future contracts.
D) modifications to executed contracts.

Question 32

Charitable organizations frequently raise money by asking for:

A) discounts.
B) bribes.
C) gifts.
D) pledges.

Question 33

The most common form of valid consideration is:

A) the promise of money by one party for the promise of an act by another.
B) the promise of an act by one party for the promise of refraining from trade by the other party.
C) the promise of money by one party for the promise of restraining oneself from competitive trade by another.
D) the promise of an act by one party in exchange for a different act by another.

Question 34

If a contract requires a person to do something he or she is already required to do, such as obey all traffic laws, the contract is:

A) enforceable
B) not enforceable.
C) illegal.
D) impossible.

Question 35

The law assumes that, as long as no undue pressure is brought to bear, the parties were:

A) free to reject a proposed unfair contract.
B) not allowed to enter into another contract.
C) required to accept proposed contract terms.
D) part of a confidential relationship.

Question 36

Some agreements that lack consideration are:

A) enforceable.
B) not enforceable.
C) valid.
D) unlawful.

Question 37

A person who makes a promise without requiring some benefit in return has made a:

A) gratuitous promise.
B) barren promise.
C) pledge or subscription.
D) onerous contract.

Question 38

A promise that consists of an indefinite, open-ended statement purporting to be an agreement is known as a(n):

A) illusory promise.
B) gratuitous promise.
C) preexisting duty.
D) barren promise.

Question 39

A barren promise is one that involves a promise:

A) to do something one is already required to do.
B) to perform an illegal act.
C) to perform an act that involves an unreasonable period of time.
D) that cannot be performed.

Question 40

With respect to pledges and subscriptions, courts have generally held that these promises are:

A) unenforceable.
B) enforceable.
C) enforceable only in cases involving amounts greater than $500.
D) unenforceable if they are not made for a reasonable period of time.

Question 41

Identify four kinds of agreements that lack consideration.

Question 42

Define and explain the term "general release."

Question 43

Describe agreements supported by moral consideration.

Question 44

A promise to repay someone for a benefit after the benefit has been received is known as:

A) a pre-ordained contract.
B) a pre-meditated contract.
C) prior consideration.
D) past consideration.

Question 45

Discuss the situations in which the Uniform Commercial Code dispenses with the requirement of consideration in contracts to sell goods.

Question 46

What are the characteristics of valid consideration?

Question 47

______ is a promise that is generally not valid consideration and is considered a gratuitous promise, except in cases of moral consideration.

A) Present consideration
B) Past consideration
C) A barren promise
D) An onerous contract