Question 1

Is a promise to pay a pre-existing moral obligation enforceable? Explain.

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Question 2

Consideration:

Accepted Answer

Consideration may be given to the promisor or to some other person by the promisee or by some other person. This means that consideration can be given by anyone as long as it is something of value that is exchanged between the parties involved in the contract. Therefore, option C is the best choice. Options A, B, and D are incorrect as they do not accurately reflect the concept of consideration.

Question 3

Define legal detriment.

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Question 4

Ron owes Matt an unsecured debt of $3,000.Ron has a discharge of all his unsecured debts by a bankruptcy court.Can the contract between Matt and Ron be reinstated?

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Question 5

The requirement of legally sufficient consideration:

Accepted Answer

Legally sufficient consideration means that the parties have agreed to an exchange and that it imposes a legal detriment upon the promisee or confers a legal benefit upon the promisor. This means that there must be something of value exchanged between the parties, which can be a promise, a performance of an act, or refraining from an action. Legally sufficient consideration does not require the subject matter to have the same value or to be adequate, as long as there is a mutual agreement and legal detriment or benefit.

Question 6

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

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Question 7

Define a substituted contract and describe how it affects an agreement.

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Question 8

Define consideration.

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Question 9

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.In this case:

Accepted Answer

Darla's conditional promise is sufficient consideration as long as she believes there is at least a possibility of receiving the money from her uncle's estate. If she knows for sure that she cannot receive at least $6,000, then the consideration would be insufficient. This type of contract is known as a conditional contract, where the fulfillment of one party's promise is contingent on a specific event or condition.

Question 10

A bank robbery has occurred,and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber.Several people are claiming to be entitled to the money.Which of them is eligible?

Accepted Answer

Generally, law enforcement officers and bank employees are not eligible for rewards offered for information leading to arrests in crimes they are professionally involved in. However, an off-duty deputy sheriff from a different county would not be professionally involved and thus could be eligible for the reward.

Question 11

In which of the following situations will a smaller sum be unable to discharge a larger debt?

Accepted Answer

If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency, the smaller sum will be unable to discharge the larger debt. This is because the debtor is unable to pay the larger debt in full, and the smaller sum is not sufficient to cover the entire debt.

Question 12

Jason's mother would like him to go to college,so in June he enrolls at State University.He also quits his job and tells his mother his plans to continue taking classes.His mother says,"I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485.Which of the following is true regarding his mother's promise?

Accepted Answer

Jason's mother's promise is unenforceable because Jason had already enrolled in school before she made the promise, meaning there was no new consideration from Jason's side for her promise. Consideration is a core requirement for a contract to be enforceable, and it involves a bargained-for exchange where each party receives something of value. Since Jason's action of enrolling in college occurred before his mother's promise, his action cannot be considered as consideration for her promise to pay for his books.

Question 13

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

Accepted Answer

This fact situation involves a preexisting contract between Andrew and Betty, where Andrew agrees to paint Betty's house for $500. Two days into the job, Andrew decides the agreed-upon price is not enough and demands an additional $100 to continue. However, he is not offering any additional consideration in return for Betty's promise to pay more. Therefore, this situation is an example of an attempted modification of a preexisting contract without any new consideration, which is generally unenforceable.

Question 14

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.

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Question 15

Which of the following requires consideration in order to be binding upon the parties?

Accepted Answer

Consideration is required for the material alteration of a personal service contract to be binding, as it involves a change in the terms of the original agreement.

Question 16

A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n)____ contract.

Accepted Answer

A requirements contract is an agreement where the buyer agrees to purchase all of the goods or services they need from a particular seller. The seller is obligated to supply the goods or services at the agreed-upon price when the buyer needs them. This is different from an output contract, where the seller agrees to sell all of their production to a particular buyer. An exclusive dealing contract involves a seller agreeing to only sell to a particular buyer or a buyer agreeing to only purchase from a particular seller. An illusory contract is a contract that appears to be a legally binding agreement, but in reality, one party has not actually committed to anything.

Question 17

Doug obtains an exclusive franchise to sell widgets for the Acme Widget Company.The exclusive franchise covers the entire State of Wisconsin for a period of three years.In this case:

Accepted Answer

Under the Uniform Commercial Code (UCC), when a seller grants an exclusive territory to a buyer or franchisee, there is an implied obligation that the buyer or franchisee must use their best efforts to promote and sell the goods in that territory. This ensures that the seller's grant of exclusivity is valuable and that the seller benefits from the arrangement by having their products actively marketed and sold in the exclusive territory.

Question 18

William agrees to drill a well up to 200 feet deep for John's rural cabin.The contract price is $3,000.After drilling 100 feet,William strikes solid granite rock.He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract.He offers to get a special drill,but says it will cost him more money,so that he will be unable to complete the project for the agreed price.Because John is anxious to have the well,he agrees to pay William an additional $1,000 to complete the job.However,once the well is finished,he changes his mind and now says he will pay only the originally agreed-upon amount.In this case:

Accepted Answer

The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000 because he agreed to it at the time and it was not an unreasonable request by William considering the unforeseen circumstances.

Question 19

Barbara,a wealthy widow,promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage.Other pledges are obtained to pay off the mortgage,but now Barbara has changed her mind and plans to take an around-the-world cruise instead.In this case:

Accepted Answer

In this case, the doctrine of promissory estoppel can be applied. Barbara made a promise to donate $20,000 to the church if other pledges were obtained to pay off the mortgage. The church relied on this promise and obtained the other pledges. It would be unjust for Barbara to now back out of her promise and go on a cruise instead. Therefore, the doctrine of promissory estoppel can be used to enforce Barbara's promise, even though it may not have been a legally binding contract.

Quiz 12: Consideration