Question 1

"I'll sell you my car if I decide to sell it" is an example of:

Accepted Answer

The answer of "I'll sell you my car if I...

Question 2

Lisa owes $800 to Bella Shoe Store.She sends the store a check for $200 with the notation "payment in full" on the check.If the store cashes the check:

Accepted Answer

The fact that Lisa made the notation "payment in full" on the check creates a potential dispute as to whether the check was intended to be an accord and satisfaction. Under the UCC, if a debtor sends a check with a notation of "payment in full" to settle a disputed claim, the creditor must either accept the payment as satisfaction of the claim or object in writing within a certain period of time. If the creditor accepts the payment, it is treated as a settlement of the claim, even if the amount is less than the full amount owed. However, if the creditor objects in writing within a certain period of time, the check is not considered an accord and satisfaction and the creditor can still pursue the full amount owed. Thus, the check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks.

Question 3

A promise by Derkin Restaurants to buy all of the produce it needs this next year at an established price from Elfredo's Produce would be an:

Accepted Answer

This is an enforceable requirements contract because Derkin Restaurants is promising to buy all of the produce it needs for the next year at a set price from Elfredo's Produce, which means Derkin's purchase obligations are determined by its actual requirements or needs.

Question 4

The Kelsoe v.International Wood Products,Inc.case was an example of:

Accepted Answer

The answer of The Kelsoe v.International Wood Products,Inc.case was an...

Question 5

An agreement in which a buyer agrees to buy all the goods produced by a manufacturer is known as:

Accepted Answer

The answer of An agreement in which a buyer agrees...

Question 6

Upon graduating from college,Kathy announced her plans to enter law school the following fall and to marry Rick in December.Kathy's father was afraid that marriage during her first year in law school might cause her to fall behind in her studies or cause her to drop out of school.He called Kathy and promised her $10,000 if she postponed her wedding until after completion of her first year of law school.Kathy agreed and postponed the wedding for a year.Kathy successfully completed her first year of law school,but soon thereafter,Kathy's father died.The administrator of her father's estate claimed she was not entitled to the $10,000 because there was no consideration for her father's promise.If Kathy sues the estate,she will probably be:

Accepted Answer

In this scenario, there was a valid contract between Kathy and her father. Her father promised to pay her $10,000 if she postponed her wedding until after the completion of her first year of law school, and Kathy agreed to this condition. This mutual promise or exchange of value is known as consideration, which makes the contract legally enforceable. Therefore, if Kathy sues the estate, she will probably be successful in claiming the $10,000 because there was consideration involved in the contract.

Question 7

Jamie is building a new house on her lot.She invites Earnie of Earnie's Excavation to bid on the excavation job.Earnie observes that the lot next to Jamie's is also under excavation and the soil in that lot is normal and not excessively rocky.Based on the assumption that the soil in Jamie's lot will be similar,he and Jamie agree that the excavation will cost $3,000.When Earnie starts digging,he learns there is solid rock under Jamie's lot.Earnie says it will cost an extra $2,500 for the excavation work.Jamie agrees just to get the job done but later refuses to pay a dime more than $3,000.If Earnie sues,the most likely result would be:

Accepted Answer

In this scenario, Earnie encountered an unforeseen difficulty, which is solid rock under Jamie's lot. As per the doctrine of unforeseen difficulties, if a party faces an unforeseen difficulty while performing a contract, which was not contemplated by the parties at the time of making the contract, the party may be excused from performing the contract. Therefore, Earnie is entitled to the additional payment of $2,500, and he is likely to win if he sues Jamie.

Question 8

Sanders Co.and Gaines,Inc.enter into a contract for the manufacture and sale of 200 patio wooden tables.If both parties agree that a modification is necessary:

Accepted Answer

An agreement to rescind the contract will terminate the contractual rights of both parties if neither has completed their obligations, allowing them to modify the contract as needed.

Question 9

If Ellen and Daryl are in disagreement as to the exact amount of money that Ellen owes Daryl,then they may choose to form a new agreement at a set amount.If they both perform the new agreement,their conduct would be an example of:

Accepted Answer

An accord and satisfaction occurs when parties agree to settle a dispute by forming a new agreement (the accord) and then performing it (the satisfaction), resolving the disagreement over the original obligation.

Question 10

The Plaza Hotel contracts with EZ Lawn to have EZ mow the grass on the Plaza grounds for the next 10 years.However,there is a clause in the contract that states if the hotel chooses,the contract may be terminated provided Plaza pays EZ $2,000 on termination.Which of the following is correct?

Accepted Answer

The contract is enforceable because the option to cancel clause is supported by consideration in the form of the $2,000 payment that Plaza must make if it chooses to terminate the contract. The fact that only one party has the option to cancel does not make the contract unenforceable. Additionally, the $2,000 payment is not past consideration because it is payable if the contract is terminated in the future, and therefore constitutes valid consideration. The option to cancel clause does not make the contract an illusory promise because the obligation to pay the $2,000 provides consideration that supports the promise to perform the lawn mowing services for the 10-year term.

Question 11

Northland,Inc.agreed to build Heather a cedar garden shed for $3,000.After beginning the project,Northland realized that it could not complete the job and make a profit.Northland demanded $3,800 to complete the building.Heather agreed to pay the $3,800.When the project was complete,Heather tendered $3,000 to Northland for the job.If Northland sues Heather for the remaining $800:

Accepted Answer

In order for Heather to be legally obligated to pay the additional $800, there must be legal consideration to support it. Consideration is the exchange of something of value between the parties. In this case, Northland had already agreed to build the shed for $3,000, and Heather had agreed to pay that amount. Northland demanding more money later on without providing any additional value does not provide legal consideration to support the additional $800. Therefore, Northland cannot sue Heather for the remaining $800.

Question 12

Under the Uniform Commercial Code,an agreement modifying a contract:

Accepted Answer

According to the Uniform Commercial Code (UCC), an agreement modifying a contract may not require consideration. This means that a modification can be made to the terms of the original contract without any new benefits being exchanged between the parties. However, it is important to note that this is not always the case and other legal requirements may need to be met in order for the modification to be enforceable.

Question 13

If Rudy offers Oscar $200 for his $600 stereo and Oscar agrees,a court will probably:

Accepted Answer

This is a valid contract as both parties agreed on the terms voluntarily. The court will not interfere with the agreed-upon price as long as it was not the result of fraud, coercion, or duress. The UCC (Uniform Commercial Code) governs contracts involving the sale of goods and does not require a particular level of consideration for a contract to be enforceable.

Question 14

Mid-American Oil had a contract with NSB Company to supply 1,000 gallons of oil by September 1.The contract contained a provision which required all modifications to be written and signed by the company presidents.In early August,an executive of Mid-American talked with the purchasing agent of NSB who orally agreed to two shipments of oil; one in September and the second one in December.By September 30,when only 500 gallons had been delivered,NSB sued.The likely outcome of this lawsuit is:

Accepted Answer

The contract specifically required that all modifications be in writing and signed by both company presidents. The oral agreement made between an executive and a purchasing agent did not satisfy this requirement. Therefore, the modification was not valid and enforceable, and NSB would likely win the lawsuit.

Question 15

Police Officer Paul apprehends a wanted criminal and then demands the $10,000 reward offered by Crime Stoppers.Which of the following statements is true?

Accepted Answer

Police Officer Paul was under a pre-existing duty to make the arrest as it is part of his job as a police officer. This means that his performance of the duty does not constitute valid consideration for the reward. Therefore, he is not entitled to the reward offered by Crime Stoppers.

Question 16

Emily agrees to sell Clowns R Us some balloons.The contract states that Clowns may buy as many balloons as it wishes.This agreement is:

Accepted Answer

An illusory contract is one where the terms are not definite or certain, making it unenforceable. In this case, since Clowns R Us can choose to buy any number of balloons, including none, the agreement lacks mutual obligation.

Question 17

An unliquidated debt can be described as:

Accepted Answer

An unliquidated debt is a type of debt in which the existence or amount of debt is in dispute. It means that either the creditor or the debtor disagrees over the amount of the debt, or whether the debt exists or not.

Question 18

Frank owes an undisputed amount to Hanson Gutter Cleaners.Which of the following is true?

Accepted Answer

The statement "If Hanson agrees to accept less than the full amount as full payment, the agreement is not binding" is true because an agreement to accept less than the full amount as full payment is known as an accord and satisfaction. To be legally binding, this agreement must be made in good faith and with a bona fide dispute over the amount owed. Additionally, any agreement to settle a debt for less than the full amount must be supported by consideration, which means that Hanson must give up something of value in exchange for accepting less than the full amount. If these requirements are not met, then the agreement is not binding.

Question 19

If Annie promises not to drink alcohol until she is 21 years of age in exchange for her aunt's promise of $1,000,the agreement is:

Accepted Answer

The promise made by Annie is not enforceable because she is not legally entitled to drink alcohol before the age of 21, therefore she cannot give up a legal right in exchange for her aunt's promise. The agreement is against public policy and is void.

Question 20

Walter worked nights as a clerk in a fast-food store.On his last work shift,Walter's boss told him,"I'm really grateful for the year that you have worked here.I am going to give you a bonus of $1,000 in your last paycheck." When Walter got his last paycheck,there was no bonus.If Walter sues,the likely result will be:

Accepted Answer

A promise of a bonus is not enforceable without consideration, which is something of value offered in exchange for the promise. Walter did not provide any consideration for the bonus, so he cannot sue for its non-payment.

Quiz 11: Consideration