Question 1

In a skateboarding accident with Ryan,Starla is injured.Ryan's insurance company's offers her $25,000 to release him from liability,and she accepts.Later,she learns that her injuries are more serious than she realized.The release

Accepted Answer

When Starla accepted the $25,000 and released Ryan from liability, she entered into a binding settlement agreement. This release generally bars her from seeking further recovery from Ryan, even if her injuries are more serious than initially thought.

Question 2

Speedy Assembly Company promises its employees a 10-percent raise at the end of the year if productivity has increased and management feels it is warranted.Speedy must

Accepted Answer

The answer of Speedy Assembly Company promises its employees a...

Question 3

Shila promises to pay Blaine $500 because "he does not have as much money as other people." Shila's promise is

Accepted Answer

Shila's promise lacks consideration which is essential to enter into a contract. Blaine has not given anything in return for the promise of $500, thus it is not legally enforceable.

Question 4

Suki works for Renaldo.At the end of her first year,Renaldo promises to pay her a bonus for her "four quarters of success." Renaldo's promise is

Accepted Answer

Renaldo's promise is unenforceable because Suki's performance is past consideration, meaning it was completed before the promise was made, and thus cannot be used as consideration for a new promise.

Question 5

Quinn promises to sell his recreational vehicle (RV)to Sid,who builds a structure behind his house in which to keep it.Quinn's later attempt to renege on the promise is

Accepted Answer

If Sid has detrimentally relied on Quinn's promise by building a structure to keep RV, then Quinn cannot renege on the promise as it would cause harm to Sid. Therefore, choice D is correct. Choice A is incorrect as it is irrelevant whether Quinn asked Sid to build anything or not. Choice B is incorrect as Quinn's desire to sell the RV to someone else does not invalidate his promise to Sid. Choice C is also incorrect as it is not relevant whether Sid can obtain a similar RV for a similar price.

Question 6

Chip's Chips Company agrees to supply Delicioso Café with all the corn chips that it re?quires for a year.A sudden demand for ethanol results in a shortage of corn,and the price rises sharply.Chip's asks Delicioso to pay a higher price for the chips.This request is

Accepted Answer

The unforeseen difficulty of the sudden price increase makes the request valid.

Question 7

Gino files a suit against Free-Flo Plumbing Corporation under the doctrine of prom?issory estoppel.Gino must show that

Accepted Answer

In order to succeed in a suit under the doctrine of promissory estoppel, Gino must show that he justifiably relied on Free-Flo's promise to his detriment. This means that Gino relied on the promise and was harmed in some way as a result of that reliance. The other answer choices do not accurately reflect the requirements of promissory estoppel.

Question 8

Braxton questions whether there is consideration for his contract with Tawny to exchange his accounting services for her payment of a certain amount.To constitute consideration,there must be

Accepted Answer

Consideration requires a bargained-for exchange between the parties. In this case, Braxton and Tawny have agreed to exchange accounting services for payment, which satisfies the requirement of consideration. Payment of money or performance of services alone do not necessarily constitute consideration, as they must be part of a mutually agreed-upon exchange. Detrimental reliance is not relevant to consideration.

Question 9

Rollo promises to perform,for a price,shoe repair services in affiliation with Togs 'n Things,a clothing store.To support a contract,the consid?eration ex?changed by the parties must be

Accepted Answer

For a contract to be valid, the consideration exchanged by the parties must be legally sufficient, meaning it must have some value and be bargained for. Adequacy of consideration or wise pricing is not required for a contract to be valid, and the value of consideration exchanged does not necessarily have to be equally valuable.

Question 10

Credit & Debt Corporation loans Evelyn $25,000 to start a new business.Evelyn does not pay,but Credit & Debt fails to sue within the time prescribed by the applicable statute of limitations.Evelyn promises to pay a portion of the debt even though recovery is barred.Credit & Debt can sue to recover

Accepted Answer

Evelyn's promise to pay a portion of the debt, even though the statute of limitations has expired, creates a new obligation for that amount, allowing Credit & Debt to sue for the promised portion.

Question 11

Mei writes a check to Nat in an amount that represents half of her debt to him.On the back of the check,Mei includes the words "payment in full." Nat cashes the check.This dis?charges the entire debt

Accepted Answer

If the debt is unliquidated, then Mei's payment in full statement on the back of the check is considered a accord and satisfaction offer. If Nat cashes the check, he is accepting Mei's offer and the entire debt is discharged. However, if the debt is liquidated or past due, Mei's payment in full statement would not be considered a valid accord and satisfaction offer, and Nat would not be obligated to accept the partial payment as full satisfaction of the debt.

Question 12

Joel contracts to hire Huong for one year to tend the orchids in his commercial greenhouse but reserves the right to cancel the employment on one month's notice at any time after Huong begins work.This promise is

Accepted Answer

The promise is enforceable because Joel has made a commitment to employ Huong for a year, with a specific provision allowing for termination with notice. This creates a valid contract with consideration, as both parties have obligations.

Question 13

Triple-D Cinemas promises to pay Shakir $1,000 to repair and clean its marquee.The act of doing this work is

Accepted Answer

The promise of payment by Triple-D Cinemas for Shakir's work to repair and clean its marquee is a mutual exchange or a bargain, therefore, it is considered consideration.

Question 14

Jeff offers Kelly $500 for her three-year-old laptop computer.Kelly ac?cepts.If a dispute arises,a court would likely

Accepted Answer

There is no indication that the transaction is illegal, fraudulent or unconscionable, and the consideration exchanged is not inherently illegal or immoral, so the court would not question the adequacy of the consideration. The court would likely enforce the deal as it was agreed upon by the parties involved.

Question 15

Metal Fabrication Corporation promises to give stock options to Sigourney for processes she has already designed for the firm.This promise is

Accepted Answer

Promising to give stock options for processes that have already been designed is not considered valid consideration as the work has already been completed. This makes the promise an unenforceable one.

Question 16

Sonic Board Corporation files a suit against Custom Fabricators Company,claiming that the consideration for their contract is inadequate.The court will most likely not examine the adequacy of the considera?tion if

Accepted Answer

The court will not examine the adequacy of consideration if there is something of value passed between the parties, regardless of whether one party believes it to be inadequate or if there is a large disparity in the amount of consideration exchanged. The amount of the consideration is also irrelevant, as the court will only focus on whether there was a valid exchange of something of value.

Question 17

Todos Ltd.agrees to supply United Steel,Inc. ,with minerals from Venezuela.When the gov?ern?ment is unexpectedly overthrown in a revolution,Todos can obtain the goods only at a much higher price.United agrees to pay but later files a suit to recover the difference.The court will most likely rule that

Accepted Answer

The unforeseen difficulty due to the revolution supports the contract modification, making the price increase reasonable under the circumstances.

Question 18

Fact Pattern 12-B1 
Sal contracts with Tasty Pizza Company to deliver its products.Both parties change their minds,however,and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 12-B1.The next day,Sal changes her mind and again offers to deliver Tasty's products.Tasty is willing to deal,but for a new price.Sal and Tasty

Accepted Answer

Since both parties have cancelled the original contract, they are free to negotiate a new contract with different terms, including a new price.

Question 19

George and Hildy disagree as to the exact amount one owes the other.They form a new agreement that,on fulfillment,will discharge the prior obli?gation.This is

Accepted Answer

An accord and satisfaction is a new agreement made to settle a dispute over an existing obligation, in which the parties agree to accept something different from what was originally promised as full satisfaction of the obligation. This is the best choice because it involves the formation of a new agreement that discharges the prior obligation, which is exactly what is happening in this scenario. A covenant not to sue is an agreement in which one party agrees not to sue the other, but it does not necessarily involve the discharge of an existing obligation. A release is a document in which one party waives any future claims against another party, but it also does not necessarily involve the discharge of an existing obligation. Promissory estoppel is a doctrine that prevents a party from going back on a promise if the other party relied on that promise to their detriment, but it does not involve the formation of a new agreement or the discharge of an existing obligation.

Question 20

Fact Pattern 12-B1 
Sal contracts with Tasty Pizza Company to deliver its products.Both parties change their minds,however,and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 12-B1.Sal and Tasty

Accepted Answer

Since both Sal and Tasty Pizza Company have informed each other that they want to cancel the contract, the contract can be rescinded to the extent that it is executory, meaning any parts that have not yet been performed. Therefore, they do not have to perform the entire contract but only the parts that are already in motion.

Quiz 12: A: Consideration