Question 1

Contracts in which one party agrees in good faith to buy all his requirements of certain goods from the other party are generally unenforceable because there is no definite amount.

Accepted Answer

Contracts in which one party agrees in good faith to buy all his requirements of certain goods from the other party are enforceable as long as the requirement is made in good faith and the quantity is not unreasonably disproportionate.

Question 2

A debt that is disputed because the parties disagree over its existence or amount is an unliquidated debt.

Accepted Answer

This is the definition of an unliquidated debt.

Question 3

"I'll sell you my car if I decide to sell it" is an example of
A)a conditional offer.
B)an unliquidated offer.
C)a unilateral contract.
D)an illusory promise.

Accepted Answer

The statement "I'll sell you my car if I decide to sell it" is an illusory promise because it does not commit the speaker to any action, as the decision to sell is entirely at their discretion.

Question 4

Section 2-306 of the UCC expressly disallows output contracts in the sale of goods.

Accepted Answer

Section 2-306 of the UCC expressly allows output contracts in the sale of goods.

Question 5

What phrase explains how a requirements contract can be valid?
A)"will buy 100 percent of output"
B)"willing to accept the entire quantity"
C)"no consideration needed"
D)"in good faith"

Accepted Answer

The answer of What phrase explains how a requirements contract...

Question 6

The UCC requires consideration for agreements modifying contracts for the sale of goods.

Accepted Answer

Under the Uniform Commercial Code (UCC), an agreement modifying a contract for the sale of goods does not need consideration to be binding, provided the modification is made in good faith. This is a departure from the general contract law principle that requires consideration for contract modifications.

Question 7

Denton agreed to build a cedar deck for the Thrashers for $7,000.After he began the work,the Thrashers asked him to add cedar flower boxes at one side.Denton replied he would,but it would cost an additional $600.The Thrashers would not be obligated to pay the additional sum because the original agreement already obligated Denton to complete the deck for $7,000.

Accepted Answer

According to the scenario, the Thrashers asked Denton to add cedar flower boxes, which would cost an additional $600. Denton agreed to do so, but it would increase the total cost of the project to $7,600. Therefore, the Thrashers would be obligated to pay the additional sum if they wanted the flower boxes added to the deck.

Question 8

Courts distinguish between mere gifts between parties and legally binding commitments by the element of consideration.

Accepted Answer

Consideration is a legal concept that refers to something of value (usually money or its equivalent) given in exchange for a promise or performance. Without consideration, a contract or agreement is generally not enforceable as a legally binding commitment. Therefore, courts do distinguish between mere gifts, which are not legally binding, and agreements with consideration that create legally binding obligations.

Question 9

A promise to do (or not do)something in the future counts as consideration.

Accepted Answer

This is true. A promise to do (or not do) something in the future can be considered as a form of consideration in a contract.

Question 10

An agreement between two parties to pay a lesser amount to settle an unliquidated debt is
A)enforceable, as there is consideration.
B)unenforceable, as there is no consideration.
C)enforceable in only some states.
D)unenforceable as a violation of public policy.

Accepted Answer

An agreement between two parties to pay a lesser amount to settle an unliquidated debt is enforceable, as there is consideration. Both parties are exchanging something of value, the debtor is giving up the right to contest the debt, and the creditor is accepting a lesser amount as full payment. This is known as an accord and satisfaction.

Question 11

Agreeing not to open a competing business could be consideration.

Accepted Answer

Agreeing not to open a competing business is a promise or obligation that one party is agreeing to, and therefore can be considered as consideration in a contract.

Question 12

In the historic case of Hamer v.Sidway,the nephew
A)lost, as the Court found therewas no consideration.
B)lost, as the uncle was dead.
C)won, as the Court found therewas consideration.
D)won, as there was a completed gift.

Accepted Answer

In the case of Hamer v. Sidway, the nephew won because the Court found that there was consideration. The uncle had promised to pay his nephew $5,000 if the nephew refrained from drinking, smoking, swearing, and playing cards or billiards for money until he turned 21. The nephew held up his end of the deal and refrained from these activities, and the uncle had promised to pay him the money. The Court found that this promise constituted valid consideration and therefore the nephew was owed the $5,000.

Question 13

A completed act can be the basis for consideration.

Accepted Answer

The answer of A completed act can be the basis...

Question 14

Pastor Tom was employed by the First Church for 40 years.On Pastor Tom's retirement there was no adequate pension plan.Two months after the retirement,a wealthy parishioner,in consideration for Pastor Tom's 40 years of faithful service and for being such a "sweet" man,promised to pay him $500 per month for the rest of his life.This promise probably is not enforceable.

Accepted Answer

A promise to pay someone a certain amount of money for the rest of their life is considered a form of pension plan, which should have been established before the retirement. Since there was no adequate pension plan at the First Church and the promise was made two months after retirement, it is unlikely to be enforceable. Additionally, verbal promises without a written agreement are generally not enforceable.

Question 15

As it pertains to consideration,which of the following does NOT constitute value?
A)an illusory promise
B)an act
C)a forbearance
D)a promise to act

Accepted Answer

An illusory promise does not constitute value because it does not represent a commitment to do or not do something. It is a statement that is not binding and does not create any legal obligation. Therefore, it cannot be considered as a valid consideration in a contract. On the other hand, an act, forbearance, or a promise to act are all forms of consideration that can be used to form a valid contract.

Question 16

Contracts generally do not require bargaining that leads to an exchange between the parties.

Accepted Answer

Contracts typically require an offer, acceptance, and consideration, which involves bargaining and an exchange of value between the parties.

Question 17

Hilda owes Lex $3,000,which is an undisputed amount.If she offers him her car in full settlement of the debt and he accepts,the agreement is binding and he can no longer claim she owes him anything on the original debt.

Accepted Answer

This is a valid example of accord and satisfaction. If both parties agree to the offer and consideration is given (in this case, the car), then the debt is considered satisfied and the creditor cannot claim any further amount owed on the original debt.

Question 18

An illusory promise is valid consideration.

Accepted Answer

An illusory promise is a statement that appears to be a promise but does not actually commit the person making the statement to do anything. It is not considered valid consideration because there is no legally binding obligation or exchange of value involved.

Question 19

The two basic elements of consideration are intention and agreement.

Accepted Answer

The two basic elements of consideration are something of value given by both parties and a bargained-for exchange between the parties.

Question 20

Billy owes a liquidated debt of $3000 to Rayna,his personal weight trainer.Billy sends Rayna a check for $300 on which he has marked,"Payment in Full." If Rayna cashes the check she will not be able to successfully sue Billy for the remainder of the debt.

Accepted Answer

The marking "Payment in Full" on a check for a lesser amount than the total debt is known as an accord and satisfaction. Rayna can choose whether or not to accept the partial payment as full satisfaction of the debt. If she cashes the check, it indicates acceptance of the accord and satisfaction, and she will not be able to sue Billy for the remaining debt. However, if she does not accept the partial payment as full satisfaction, she can still sue Billy for the remaining debt. Therefore, the statement is false.

Quiz 13: Consideration