Question 1

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

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Question 2

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.In this case:

Accepted Answer

Option A is correct as a manufacturer is generally obligated to use their best efforts to supply goods even if not specified in the written franchise agreement. Option B is also correct as Roberto has an implied obligation to promote the sale of widgets as he obtained an exclusive franchise. Option C is incorrect as the Uniform Commercial Code (UCC) does not apply to franchise agreements, and even if it did, consideration is generally not an issue in such agreements. Therefore, options A and B are correct, making option D the correct choice.

Question 3

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

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Question 4

Barbara,a wealthy widow,promises the pastor of her church that she will donate $30,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $60,000 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.In this case:

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Question 5

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

An off-duty deputy sheriff from a different county is eligible because they are not performing their official duties at the time of the arrest, unlike on-duty law enforcement officers who are typically not eligible for rewards for performing their job duties.

Question 6

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 7

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.If 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 because Darla has promised to pay Edward if she receives the money from her uncle's estate, and there is consideration on both sides of the agreement. While there is a condition present, it does not make the contract illusory, as the condition is not entirely within Darla's control.

Question 8

Clint contests the amount of a bill he received from Car Care Specialists.Under the Restatement,settlement of the claim:

Accepted Answer

According to the Restatement, settlement of a doubtful claim is a valid consideration. In this case, if there was uncertainty as to the facts at the time of the settlement, it would be considered a doubtful claim and therefore the settlement would be a valid consideration.

Question 9

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

Accepted Answer

All of the above choices involve situations where consideration is not necessary for the transaction to be enforceable. In choice A, a promise to pay a debt barred by the statute of limitations is enforceable without consideration due to the legal principle of "past consideration." In choice B, a promise to pay a discharged debt is enforceable without consideration as long as certain conditions are met, such as the promise being in writing and signed by the debtor. Choice C refers to a situation where a contract may be initially voidable, but if the party with the right to avoid the contract instead chooses to reaffirm it through a new promise, consideration is not required for the reaffirmed contract to be enforceable.

Question 10

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.

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Question 11

Herb promises to give his nephew,Curt,his old TV when the new one he ordered arrives. Explain whether this promise is enforceable,and include in your discussion the concept of "bargained-for exchange."

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Question 12

In a contract for the sale of lawn care services,an issue arises about whether the homeowner would receive disproportionately less in service than the lawn care company would receive in compensation.This disparity may be relevant to the:

Accepted Answer

This disparity may be relevant to the availability of certain defenses, such as unconscionability, and certain remedies, such as reformation or rescission, but not to the requirement of legally sufficient consideration, which only requires that something of value is exchanged.

Question 13

Orwin,owner of a used furniture store,gives Maggie a signed offer to buy her living room furniture for $800.This offer:

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Question 14

Define legal detriment.

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Question 15

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.Jason's mother's promise is:

Accepted Answer

Jason's mother's promise is unenforceable because there was no consideration for her promise; Jason had already enrolled in college and quit his job before she offered to pay for his books, so he did not incur any new obligation or give up any legal right in reliance on her promise.

Question 16

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

Accepted Answer

The settlement of an undisputed debt is already legally obligated, therefore, no additional consideration would be necessary for it to be enforced. The other options may require additional consideration because they involve a promise to pay a debt or fulfill an obligation that may not have been legally enforceable without such consideration.

Question 17

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.What is the result?

Accepted Answer

The parties have entered into a new agreement, or substitute contract, which discharges the original contract. The new agreement was for John to pay an additional $1,000 for William to complete the job. Since John agreed to this new agreement, he is obligated to pay the additional amount.

Question 18

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 was already obligated to paint Rosalene's house for $500, and he gave no additional consideration in return for her promise to pay him $100 more. This means that there was no new consideration, and therefore no enforceable contract. Andrew cannot demand more money after the agreement has been made.

Question 19

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

Accepted Answer

The court held that there was no consideration for the stock option, and promissory estoppel did not apply because detrimental reliance was not proven.

Question 20

Which of the following statements best describes charitable subscription promises?

Accepted Answer

Charitable subscription promises are generally enforceable if there is reliance or a probability of reliance by the charity. This means that if the charity relies on the promise and incurs expenses or takes actions based on the promise, the promisor can be held accountable for fulfilling the promise. However, if there is no reliance or probability of reliance, the promise may not be enforceable.

Quiz 12: Consideration