Question 1

If Kate promises a stereo system to Uli,which of the following holds true with regard to the idea of consideration?

Accepted Answer

Courts generally do not enforce a promise against the person who made it (the promisor) unless the person the promise was made to (the promisee) has given up something in exchange for the promise. In effect, the requirement of consideration requires a promise to pay the "price" the promisor asked for in order to gain the right to enforce the promisor's promise. In the given scenario, Uli will not be able to enforce Kate's promise if he has not done anything in return.

Question 2

If Khalid agrees to sell his house to Lalita for $300,000,a property which is actually worth $310,000,_____.

Accepted Answer

Courts may refuse to grant equitable remedies to those who seek to enforce grossly inadequate bargains on the grounds that such persons are not entitled to the special treatment equity affords. In the given scenario, Lalita can recover damages for breach of contract if Khalid refuses to perform.

Question 3

When a promisee agrees not to do something he or she has a legal right to do in exchange for the promisor's promise,it constitutes legal value.

Accepted Answer

This statement is true. When someone agrees to give up a legal right in exchange for a promise, it is considered legal value because they are essentially exchanging one right for another. This concept is important in contract law, as it helps to determine whether a contract is legally binding and enforceable.

Question 4

The promise not to file suit is not valid consideration because the promisor has given up a legal right,the right to sue.

Accepted Answer

The promise not to file suit can be considered valid consideration as it provides a benefit to the promisee by avoiding the time, cost, and uncertainty of litigation. The promisor is giving up the right to sue in exchange for this benefit, which counts as consideration.

Question 5

A liquidated debt is one that is due and certain,which means that there is no dispute about the existence or the amount of the debt.

Accepted Answer

A liquidated debt is a debt that is clear and undisputed. The existence and amount of the debt are known and agreed upon by both parties.

Question 6

A promise supported by past consideration is always enforceable.

Accepted Answer

Past consideration is generally not valid consideration in contract law, meaning a promise based on past consideration is typically not enforceable.

Question 7

A promisee's consideration must be another promise and cannot be in the form of an act.

Accepted Answer

This statement is false. Consideration can come in the form of an act, such as providing a service or delivering goods. It does not have to be solely in the form of another promise.

Question 8

Which of the following statements is true of consideration?

Accepted Answer

A promisee's consideration may be an act (in the case of some unilateral contracts) or a promise (in the case of some unilateral contracts and all bilateral contracts).

Question 9

Legal value depends on the adequacy of consideration.

Accepted Answer

The answer of Legal value depends on the adequacy of...

Question 10

As a general rule,performing a preexisting duty is not consideration.

Accepted Answer

This is a well-established principle in contract law. If someone is already obligated to do something, then doing it does not provide any new consideration for creating a contract or modifying an existing one. However, there are some exceptions to this rule, such as when the preexisting duty is modified or when a new benefit is provided.

Question 11

Generally,a bilateral contract that lacks mutuality is unenforceable due to lack of consideration.

Accepted Answer

A bilateral contract requires mutual obligations and considerations from both parties to be enforceable. If one of the parties lacks consideration, the contract is considered unenforceable.

Question 12

As a general rule,a promise to discharge a liquidated debt for part payment of the debt at or after its due date is unenforceable due to lack of consideration.

Accepted Answer

The answer of As a general rule,a promise to discharge...

Question 13

Courts grant equitable remedies to those who seek to enforce grossly inadequate bargains on the grounds that such persons are entitled to the special treatment equity affords.

Accepted Answer

Equitable remedies are typically granted to prevent injustice or unfairness, not to enforce grossly inadequate bargains. Courts aim to ensure fairness, not to reward parties for entering into unfair agreements.

Question 14

Once a binding accord and satisfaction has been entered into,parties give up their right to have a court decide their liability.

Accepted Answer

Accord and satisfaction is an agreement where one party agrees to accept something other than what was originally owed to them in exchange for releasing the other party from their obligation. Once this agreement is reached and fulfilled, both parties give up their right to have a court decide their liability.

Question 15

Consideration can have legal value if the promisee:

Accepted Answer

Consideration can have legal value in one of two ways. If the promisee does or agrees to do something he or she had no prior legal duty to do in exchange for the promisor's promise, that provides legal value. If the promisee agrees not to do something he or she has a legal right to do in exchange for the promisor's promise, that also provides legal value.

Question 16

Freedom of contract includes the freedom to make bad bargains.

Accepted Answer

Freedom of contract is the principle that people have the right to enter into agreements with each other and that the terms of those agreements are binding. This means that individuals are free to negotiate agreements that may not be in their best interest or are disadvantageous to them. The law generally allows individuals to make bad bargains as long as they are voluntary and not the result of fraud, duress, undue influence, or some other form of coercion.

Question 17

Under the Uniform Commercial Code,a modification of an existing contract for the sale of goods requires new consideration.

Accepted Answer

Under the UCC, a modification of a contract for the sale of goods does not require new consideration as long as it is made in good faith.

Question 18

All courts hold that cashing a "payment in full" check discharges the obligation of debt under the Uniform Commercial Code.

Accepted Answer

Under the Uniform Commercial Code (UCC), specifically UCC Section 1-207 (now renumbered as 1-308), the acceptance of a "payment in full" check can discharge a debt, but this outcome can vary. Courts may consider whether the creditor expressly reserved their rights before cashing the check, and state laws and interpretations of the UCC can differ, leading to varying outcomes in different jurisdictions.

Question 19

Legal value that is bargained for and given in exchange for an act or promise is called _____.

Accepted Answer

A useful definition of consideration is legal value, bargained for and given in exchange for an act or promise.

Question 20

In determining whether a party has given consideration,courts look at whether the promises exchanged were of equal value.

Accepted Answer

In determining whether a party has given consideration, courts look at whether there was a bargained-for exchange between the parties, not necessarily whether the promises were of equal value. The law recognizes that the value a person places on a promise may be subjective and vary from person to person.

Quiz 12: Consideration