Question 1

An undisputed debt is:

Accepted Answer

An undisputed debt is an obligation that is not contested as to its existence or amount. This means that both parties involved acknowledge that the debt exists and agree on the exact amount owed.

Question 2

Ken, a research chemist, has been promised a fellowship with a stipend of $10,000 to do research on synthetic fuel oil.Under the terms of the fellowship, Ken is free to use the money as he sees fit.Ken decides to build his own laboratory, so he will not have to rent one.He hires a carpenter who begins working on shelving and cabinets in the laboratory.Then Ken receives a telegram saying the fellowship has been canceled.No reason is given for the cancellation.If Ken sues, will he be able to collect the money from the foundation which promised the fellowship? Explain your answer using legal terminology.

Accepted Answer

The answer of Ken, a research chemist, has been promised...

Question 3

A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber.Several people are claiming to be entitled to the money.Which of them is eligible?

Accepted Answer

The answer of A bank robbery has occurred, and the...

Question 4

There are certain transactions that are enforceable without consideration.These include:

Accepted Answer

All three options listed are situations where a promise or transaction may be enforceable without consideration. If a promise is made to pay a debt that is barred by the statute of limitations, it is still enforceable without consideration. Similarly, if a promise is made to pay a debt that has been discharged in bankruptcy (as long as certain requirements are met), it is also enforceable without consideration. Finally, a new promise to perform a voidable obligation that has not yet been avoided is also enforceable without consideration.

Question 5

Andrew agrees to paint Rosalene's house for $500.Two days after he starts the job, he decides that $500 isn't enough money.He refuses to finish the job, unless Rosalene agrees to pay him $100 more.What principle applies to this fact situation?

Accepted Answer

Andrew had already agreed to paint Rosalene's house for $500, so he had a pre-existing obligation to do so. He did not provide any additional consideration in exchange for Rosalene's promise to pay him $100 more. Therefore, the principle of pre-existing duty applies, which states that a promise to do something that one is already obligated to do is not valid consideration.

Question 6

Define a substituted contract and explain how it affects an agreement.

Accepted Answer

The answer of Define a substituted contract and explain how...

Question 7

Shane contracts to build a garage for Bob for a price of $6,000.Because of an increase in the cost of labor and materials, Shane refuses to perform.Bob wants the garage, so he agrees to pay an additional $500.In this case:

Accepted Answer

Under common law, a contract modification requires additional consideration. Shane has not provided any new consideration for the additional $500, so he must perform at the original price.

Question 8

Define legal detriment.

Accepted Answer

The answer of Define legal detriment....

Question 9

Which of the following are the two basic elements to consideration?

Accepted Answer

The two basic elements to consideration are bargained-for exchange and legal sufficiency. A bargained-for exchange refers to a mutual exchange of promises or actions between parties, while legal sufficiency requires that the consideration be something of value in the eyes of the law. Choices B, C, and D all refer to aspects of consideration, but they do not encompass the two basic elements.

Question 10

Ron owes Matt an unsecured deposit of $3,000.Ron has a discharge of all his unsecured debts by a bankruptcy court.Can the contract between Matt and Ron be reinstated?

Accepted Answer

The answer of Ron owes Matt an unsecured deposit of...

Question 11

Which of the following statements best describes charitable subscription promises?

Accepted Answer

Charitable subscription promises are generally enforceable if the charity relied or can show a probability of reliance on the promise. This is because charitable subscriptions are considered to have economic value to the charity, unlike gifts. While they may not be legally enforceable as contracts, the charity can seek equitable remedies if the donor does not fulfill their promise.

Question 12

Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company.The exclusive franchise covers the entire State of Wisconsin for a period of three years.

Accepted Answer

A) Under the implied covenant of good faith and fair dealing, the manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement. 
B) As a franchisee, Roberto has an implied obligation to use his best efforts to promote the sale of the widgets, as it is essential for the success of the franchise. 
C) The UCC does not apply to the franchise agreements. Hence, such an agreement cannot lack consideration under the UCC.

Question 13

Which of the following would not be enforceable without additional consideration?

Accepted Answer

In contract law, additional consideration refers to something of value that is given in exchange for a promise, which is necessary for a contract to be enforceable. A, B, and C are all scenarios where additional consideration is not required for the promise to be enforceable. However, D, the settlement of an undisputed debt, typically requires additional consideration to be enforceable because if the debt is undisputed, the debtor is already legally bound to pay the original amount, so agreeing to pay something they are already obligated to pay does not constitute new consideration.

Question 14

Is a promise to pay a pre-existing moral obligation enforceable? Explain.

Accepted Answer

The answer of Is a promise to pay a pre-existing...

Question 15

Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated.She expects to know for sure how much she will receive within a week or so.Edward agrees.

Accepted Answer

The consideration from Darla to Edward is the promise of $6,000 subject to a condition. This is a valid contract as long as the condition is not illegal or impossible to perform.

Question 16

Barbara, a wealthy widow, promises the pastor of her church that she will donate $10,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $30,000 mortgage.Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead.Barbara's promise to pay $10,000:

Accepted Answer

The answer of Barbara, a wealthy widow, promises the pastor...

Question 17

In DiLorenzo v.Valve and Primer Corporation, the court held:

Accepted Answer

The court held that there was no consideration for the stock option and that promissory estoppel did not apply because detrimental reliance was not proven. This means that DiLorenzo did not provide anything of value in exchange for the stock option, and there was no evidence that he suffered any harm or detriment as a result of relying on Valve & Primer's promise. Therefore, the court did not find in favor of DiLorenzo.

Question 18

Jason's mother would like him to go to college, so in June he enrolls at the local university.He also quits his job and tells his mother his plans to take classes.His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485.Which of the following is true regarding his mother's promise?

Accepted Answer

In order for a promise to be enforceable as a contract, there must be consideration exchanged. Consideration is a legal term referring to something of value given in exchange for a promise. Here, Jason had already enrolled in school before his mother made the promise to pay for his books, so he did not provide consideration in exchange for her promise. Therefore, her promise is unenforceable as a contract.

Question 19

William agrees to drill a well up to 200-feet deep for John's rural cabin.The contract price is $3,000.After drilling 100 feet, William strikes solid granite rock.He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract.He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price.Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job.However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount.

Accepted Answer

The parties have entered into a substitute contract, which discharges the original contract. John agreed to pay an additional $1,000 for the completion of the project, and this agreement overrides the initial agreement. Therefore, John is obligated to pay the additional $1,000.

Question 20

Which of the following will often not constitute valid consideration?

Accepted Answer

An illusory promise is a promise that is so vague and uncertain that it does not bind the promisor to any specific performance. Therefore, it usually does not constitute valid consideration. The other choices - forbearance to act, performance of services, and a promise to perform - can all be valid consideration in certain circumstances.

Quiz 12: Consideration