Deck 12: A: Consideration

Question 1

In many states,a release requires a signed writing.

Answer 1

True

Question 2

A release bars further recovery beyond the terms stated in the release.

Answer 2

True

Question 3

To be legally sufficient,consideration must include something of economic value.

Answer 3

False

Question 4

Failing to use the word consideration in an agreement means that no consideration has been given.

Question 5

The doctrine of promissory estoppel does not apply unless there is a clear and definite promise.

Question 6

An accord and satisfaction is used to discharge an unliquidated debt.

Question 7

In contract law,"consideration" refers to the time that a party takes to evaluate a deal.

Question 8

Extraordinary difficulties that were unforeseen at the time a contract was formed do not justify a demand for additional compensation.

Question 9

An obligation is enforceable only if it is supported by past consideration.

Question 10

A covenant not to sue always bars further recovery.

Question 11

Rescission is the substitution of one party to a contract for a third party,who agrees to assume the contractual duties.

Question 12

A promise to do something that one has a prior legal duty to do is not consideration.

Question 13

Inadequate consideration may reflect a lack of bargained-for exchange.

Question 14

A bargained-for exchange is one of the elements of consideration.

Question 15

If a promise is made,it will be enforced.

Question 16

Any promise made with respect to a past event is enforceable because the event is cer?tain-it has already occurred.

Question 17

Promissory estoppel requires reliance of a substantial and definite character.

Question 18

Risks ordinarily assumed in business constitute consideration for the modification of a contract.

Question 19

A promise to pay a debt for which a statute of limitations bars recovery is an unenforceable promise.

Question 20

If a debt is in dispute,an accord and satisfaction cannot take place.

Question 21

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

A)bars Starla's further recovery from Ryan.
B)is unenforceable because Starla's injuries are unforeseeably difficult.
C)is unenforceable because Ryan has a preexisting duty to pay.
D)is unenforceable because the release is an illusory promise.

Question 22

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

A)do nothing.
B)give the employees a 10-percent raise only at the end of the year.
C)give the employees a 10-percent raise only if produc?tivity increases.
D)give the employees a 10-percent raise under any circumstances.

Question 23

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

A)enforceable because society wants people to keep their promises.
B)enforceable because the redistribution of wealth is a valid social goal.
C)not enforceable because Shila could have given more.
D)not enforceable because Blaine has not given consideration in return.

Question 24

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

A)unenforceable because Suki's performance was a preexisting duty.
B)unenforceable because Suki's performance is past.
C)enforceable.
D)unenforceable because Suki's performance is not legally sufficient.

Question 25

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

A)effective if Quinn did not ask Sid to build anything.
B)effective if Quinn wants to sell the RV to someone else.
C)not effective if Sid cannot obtain a similar RV for a similar price.
D)not effective if Sid detrimentally relied on Quinn's promise.

Question 26

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

A)invalid as an attempt at extortion or the so-called holdup game.
B)invalid under the preexisting duty rule.
C)valid as a risk ordinarily assumed in business.
D)valid due to the unforeseen difficulty of the sudden price increase.

Question 27

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

A)he justifiably refused to fulfill a promise to Free-Flo.
B)he justifiably relied on Free-Flo's promise to his detriment.
C)Free-Flo justifiably refused to fulfill a promise to him.
D)Free-Flo justifiably relied on his promise to its detriment.

Question 28

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

A)a payment of money.
B)a performance of services.
C)a bargained-for exchange.
D)detrimental reliance.

Question 29

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

A)adequately considerate.
B)equally valuable.
C)legally sufficient.
D)wisely priced.

Question 30

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

A)the entire debt.
B)the amount promised.
C)none of the debt.
D)the amount of the consideration for Evelyn's later promise.

Question 31

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

A)if the debt is liquidated.
B)if the debt is past due.
C)if the debt is unliquidated.
D)under no circumstances.

Question 32

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

A)enforceable.
B)illusory.
C)unliquidated.
D)unforeseen.

Question 33

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

A)not consideration because its performance is a preexisting duty.
B)not consideration because its exchange is not a bargain.
C)consideration.
D)not consideration because its value is legally insufficient.

Question 34

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

A)enforce the deal after questioning the adequacy of consideration.
B)not question the adequacy of the consideration.
C)rewrite the deal after questioning the adequacy of consideration.
D)set aside the deal after questioning the adequacy of consideration.

Question 35

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

A)enforceable because it is a new contract.
B)enforceable because it is an illusory promise.
C)enforceable because it is supported by past consideration.
D)unenforce?able.

Question 36

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

A)there is a large disparity in the amount of consideration exchanged.
B)Sonic asserts that there is inadequate consideration.
C)something of value passed between the parties.
D)the consideration is worth less than $100.

Question 37

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

A)a change in government is a risk ordinarily assumed in business.
B)an unforeseen difficulty supported the contract modification here.
C)Todos engaged in extortion or the so-called holdup game.
D)Todos had a preexisting duty to supply the goods at the initial price.

Question 38

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

A)may agree to a new contract,but it cannot include a new price.
B)may agree to a new contract that includes the new price.
C)must perform their original contract.
D)must perform the part of their original contract that is executory.

Question 39

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

A)a covenant not to sue.
B)an accord and satisfaction.
C)a release.
D)promissory estoppel.

Question 40

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

A)may rescind their entire contract.
B)may rescind their contract to the extent that it is executory.
C)must perform their entire contract.
D)must perform the part of their contract that is executory.

Question 41

Cato promises Isabella $40,000 if she graduates from State College.Isabella enrolls in State,attends full-time for four years,and graduates.When she asks Cato for $40,000,he 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 otherwise be enforceable,I revoke it now." Can Isabella en?force Cato's "prom?ise"? Why or why not?

Question 42

In May,Rolf agrees to work for Soda Sales Company at $800 per week for a year beginning June 1.The following January,Tropic Beverages,Inc. ,offers Rolf the same work at $900 per week.Rolf tells Soda about the offer.Soda offers to enter into a new contract with Rolf at $875 per week.If Rolf agrees,is the new Soda contract enforce?able? Why or why not?