Question 1

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is
A) liable to Niki under the concept of accord and satisfaction.
B) liable to Niki under the doctrine of promissory estoppel.
C) liable to Niki under the preexisting duty rule.
D) not liable to Niki.

Accepted Answer

Marketing Solutions made a promise to Niki and Niki relied on that promise by quitting her job, resulting in a detrimental change in her position. Therefore, Marketing Solutions would likely be liable under the doctrine of promissory estoppel. The other options, such as accord and satisfaction or preexisting duty rule, are not applicable in this scenario.

Question 2

Apple & Pear Orchards contracts to hire Brigit for one year to tend the fruit in its commercial orchards but reserves the right to cancel the employment on thirty days' notice at any time after Brigit begins work. This promise is
A) enforceable.
B) illusory.
C) unliquidated.
D) unforeseen.

Accepted Answer

The promise is enforceable because it includes a provision for termination with notice, which is a common and acceptable term in employment contracts.

Question 3

Rudy files a suit against Shakes & Shingles, Roofing Contractor, Inc., under the doctrine of prom?issory estoppel. Rudy must show that
A) he justifiably refused to fulfill a promise to Shakes & Shingles.
B) he justifiably relied on Shakes & Shingles' promise to his detriment.
C) Shakes & Shingles justifiably refused to fulfill a promise to him.
D) Shakes & Shingles justifiably relied on his promise to its detriment.

Accepted Answer

In a promissory estoppel claim, the plaintiff must prove that they justifiably relied on the defendant's promise to their detriment. Option A is incorrect because it suggests that the plaintiff refused to fulfill a promise, which is not the case in promissory estoppel. Option C is incorrect because it suggests that the defendant refused to fulfill a promise, which is not the case in this scenario. Option D is incorrect because it suggests that the defendant relied on the plaintiff's promise, which is also not applicable here.

Question 4

Lea signs a contract with Metro Business Loans, Inc., to borrow $25,000 to remodel Lea's Hair Care Salon. Lea does not repay the loan. Metro fails to sue within the time prescribed by the applicable statute of limitations. Later Lea promises to pay the debt. To be enforceable, this promise needs
A) bargained-for consideration.
B) no consideration.
C) legally sufficient consideration.
D) adequate consideration.

Accepted Answer

A promise to pay a debt barred by the statute of limitations does not require new consideration to be enforceable.

Question 5

Centre City Properties, Inc., owns and manages a warehouse. DIY Home Improvement Stores agrees to lease the warehouse for six years. Under the lease, DIY is obligated to pay all of the utility costs. Two years into the term, DIY asks Centre City to modify the lease to provide that the utility costs will be split equally between them. The landlord agrees, but later decides it does not want to share the costs and refuses to pay. Is Centre City bound to its agreement to share the utility costs? Why or why not?

Accepted Answer

The answer of Centre City Properties, Inc., owns and manages...

Question 6

Claudia pledges to donate $10,000 to Disaster Relief & Recovery Inc. (DR&R). On the basis of the pledge, DR&R orders additional supplies. If Claudia does not fulfill the pledge, a court may enforce it
A) under the preexisting duty rule.
B) on the basis of unforeseen difficulties.
C) as a requirement contract.
D) under the doctrine of promissory estoppel.

Accepted Answer

The best choice is D because the scenario involves a promise, which creates a moral and legal obligation on Claudia's part. DR&R reasonably relied on Claudia's promise to order additional supplies, and Claudia's failure to fulfill the pledge would cause harm to DR&R. Therefore, a court may enforce the promise under the doctrine of promissory estoppel. The preexisting duty rule does not apply here since Claudia did not have a preexisting contractual duty to make the donation. There is also no unforeseen difficulty or requirement contract in this scenario.

Question 7

Qiana writes a check to Payday Loans, Inc., in an amount that represents half of her debt to the lender. On the back of the check, Qiana includes the words "payment in full." Payday agrees to accept the lesser sum and cashes the check. This dis?charges the entire debt
A) if the debt is liquidated.
B) if the debt is past due.
C) if the debt is unliquidated.
D) under no circumstances.

Accepted Answer

This is an example of an accord and satisfaction, where a debtor offers to pay a lesser sum than owed, and the creditor accepts it as full payment. If the debt is liquidated, meaning the exact amount owed is known and agreed upon, then an accord and satisfaction can discharge the entire debt. If the debt is unliquidated, meaning the exact amount owed is not yet determined, then an accord and satisfaction can only discharge the portion of the debt agreed upon in the settlement. Therefore, choice C is correct as the answer.

Question 8

Gustaf and Hilltop Country Club disagree as to the exact amount Hilltop owes Gustaf for his landscaping work. They form a new agreement that, on fulfillment, will discharge the prior obli?gation. This is
A) a covenant not to sue.
B) an accord and satisfaction.
C) a release.
D) promissory estoppel.

Accepted Answer

An accord and satisfaction occurs when parties agree to a new arrangement that discharges a prior obligation. In this scenario, Gustaf and Hilltop have formed a new agreement regarding the amount owed for Gustaf's landscaping work, which will discharge the prior disagreement.

Question 9

Franzea is injured in an accident caused by Gentry. Gentry agrees to pay Franzea $2,500 if she agrees to release him from further liability. She agrees. If Franzea's damages ultimately exceed $2,500, she can collect
A) the balance from Gentry in a breach-of-contract suit.
B) the balance from Gentry in a tort suit.
C) the balance from Gentry on the ground of unforeseen difficulties.
D) nothing more from Gentry.

Accepted Answer

Franzea has agreed to release Gentry from further liability in exchange for $2,500. This means she cannot later seek additional damages from him, regardless of the actual cost of her damages. Therefore, the correct answer is D.

Question 10

Chris promises Dina $40,000 if she graduates from Eagle College. Dina enrolls in Eagle, attends full-time for four years, and graduates. When Dina asks Chris for $40,000, Chris says, "I don't re?member promising you $40,000. But if there was a promise, it's not en?forceable, because we didn't bargain for it. And even if there was a prom?ise that would other?wise be enforceable, I revoke it now." Can Dina en?force Chris's "prom?ise"? Why or why not?

Accepted Answer

The answer of Chris promises Dina $40,000 if she graduates...

Question 11

Twyla's dock is damaged in an accident caused by Ulric's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulric fails to pay, Twyla can bring an action for breach of contract. This agreement is
A) a covenant not to sue.
B) an accord and satisfaction.
C) unliquidated.
D) a release.

Accepted Answer

This agreement is a covenant not to sue because Twyla agrees not to sue Ulric if he pays for the damage. If he fails to pay, she can bring an action for breach of contract. A covenant not to sue is an agreement not to sue in exchange for something of value, like payment for damages.

Question 12

After an accident with a driver for Onyx Security Company, Paul signs a covenant not to sue Onyx for damages in a tort action if it pays for the damage to his car. This covenant
A) bars recovery only if Onyx pays.
B) is an illusory contract.
C) is barred by the preexisting duty rule.
D) is unconscionable.

Accepted Answer

The covenant not to sue only bars recovery if Onyx pays for the damage to Paul's car. It does not restrict Paul's right to pursue legal action if Onyx does not fulfill its obligation to pay for the damages. Therefore, option A is correct. Option B is incorrect because the contract is not illusory, as it requires Onyx to pay for the damages to Paul's car. Option C is incorrect because Paul and Onyx did not have a preexisting legal obligation to each other. Option D is incorrect because the covenant not to sue is not unconscionable, as it is a fair and reasonable agreement between two parties.

Quiz 10: Consideration

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

Apple & Pear Orchards contracts to hire Brigit for one year to tend the fruit in its commercial orchards but reserves the right to cancel the employment on thirty days' notice at any time after Brigit begins work. This promise is

Rudy files a suit against Shakes & Shingles, Roofing Contractor, Inc., under the doctrine of prom?issory estoppel. Rudy must show that

Lea signs a contract with Metro Business Loans, Inc., to borrow $25,000 to remodel Lea's Hair Care Salon. Lea does not repay the loan. Metro fails to sue within the time prescribed by the applicable statute of limitations. Later Lea promises to pay the debt. To be enforceable, this promise needs

Claudia pledges to donate $10,000 to Disaster Relief & Recovery Inc. (DR&R) . On the basis of the pledge, DR&R orders additional supplies. If Claudia does not fulfill the pledge, a court may enforce it

Qiana writes a check to Payday Loans, Inc., in an amount that represents half of her debt to the lender. On the back of the check, Qiana includes the words "payment in full." Payday agrees to accept the lesser sum and cashes the check. This dis?charges the entire debt

Gustaf and Hilltop Country Club disagree as to the exact amount Hilltop owes Gustaf for his landscaping work. They form a new agreement that, on fulfillment, will discharge the prior obli?gation. This is

Franzea is injured in an accident caused by Gentry. Gentry agrees to pay Franzea $2,500 if she agrees to release him from further liability. She agrees. If Franzea's damages ultimately exceed $2,500, she can collect

Twyla's dock is damaged in an accident caused by Ulric's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulric fails to pay, Twyla can bring an action for breach of contract. This agreement is

After an accident with a driver for Onyx Security Company, Paul signs a covenant not to sue Onyx for damages in a tort action if it pays for the damage to his car. This covenant