Question 1

Assuming no exception applies,which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt for which there is no dispute over the amount or existence of the debt,and the creditor agrees?

Accepted Answer

A)As recognized in Exhibit 15-3,there is no accord and no satisfaction on a
liquidated debt involving an admitted debt)for which a debtor offers to pay less money than is owed as full payment.
B)As recognized in Exhibit 15-3,there is no accord and no satisfaction on a liquidated debt involving an admitted debt)for which a debtor offers to pay less money than is owed as full payment.
C)As recognized in Exhibit 15-3,there is no accord and no satisfaction on a liquidated debt involving an admitted debt)for which a debtor offers to pay less money than is owed as full payment.
D)As recognized in Exhibit 15-3,there is no accord and no satisfaction on a liquidated debt involving an admitted debt)for which a debtor offers to pay less money than is owed as full payment.
E)As recognized in Exhibit 15-3,there is no accord and no satisfaction on a liquidated debt involving an admitted debt)for which a debtor offers to pay less money than is owed as full payment.

Question 2

Which of the following would be the result in a majority of states in regard to Isabella's obligation to the Italian university?

Accepted Answer

A)Under UCC section 3-311,effective in 30 states,if a business does inadvertently cash a "paid-in-full" check,it has 90 days to offer the debtor repayment in the same amount in order to reinstitute the debt.

Question 3

In a lawsuit between the bank and Ursula,regarding the reward funds,who is likely to prevail and why?

Accepted Answer

A)In a unilateral contract a promise for an act),one party's consideration is the
promise and the other party's consideration is the act.
B)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.
C)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.
D)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.
E)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.

Question 4

In a lawsuit between the bank and Kareem regarding the reward funds,who is likely to prevail and why?

Accepted Answer

A)If someone offers a reward for the capture of a suspect,the police officer may not collect it,as he or she was already obligated to apprehend the suspect.
B)If someone offers a reward for the capture of a suspect,the police officer may not collect it,as he or she was already obligated to apprehend the suspect.
C)If someone offers a reward for the capture of a suspect,the police officer may not collect it,as he or she was already obligated to apprehend the suspect.
D)If someone offers a reward for the capture of a suspect,the police officer may not collect it,as he or she was already obligated to apprehend the suspect.
E)If someone offers a reward for the capture of a suspect,the police officer may not collect it,as he or she was already obligated to apprehend the suspect.

Question 5

Which of the following should be the result in regard to Isabella's obligation to Credit Card Company B?

Accepted Answer

A)An exception to the rule that partial payment is not sufficient to discharge a
liquidated debt occurs in the situation in which the debtor offers different performance.
B)An exception to the rule that partial payment is not sufficient to discharge a liquidated debt occurs in the situation in which the debtor offers different performance.
C)An exception to the rule that partial payment is not sufficient to discharge a liquidated debt occurs in the situation in which the debtor offers different performance.
D)An exception to the rule that partial payment is not sufficient to discharge a liquidated debt occurs in the situation in which the debtor offers different performance.
E)An exception to the rule that partial payment is not sufficient to discharge a liquidated debt occurs in the situation in which the debtor offers different performance.

Question 6

Which of the following is true regarding the effect of a debtor offering to pay a different type of payment,for example,goods instead of money,on a debt for which there is not a dispute over the amount or existence of the debt,and the creditor agrees?

Accepted Answer

A)As recognized in Exhibit 15-3,in a situation involving an undisputed liquidated
debt,there is an accord and satisfaction when a debtor and creditor agree that the debtor will pay a different type of payment than that initially agreed upon as full payment.

Question 7

Which of the following was involved when the government,in attempting to help AIG,agreed to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock?

Accepted Answer

A)An example of a bilateral contract,or a promise for a promise,occurred when the
U.S.government agreed to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock.
B)An example of a bilateral contract,or a promise for a promise,occurred when the
U.S.government agreed to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock.
C)An example of a bilateral contract,or a promise for a promise,occurred when the
U.S.government agreed to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock.
D)An example of a bilateral contract,or a promise for a promise,occurred when the
U.S.government agreed to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock.
E)An example of a bilateral contract,or a promise for a promise,occurred when the
U.S.government agreed to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock.

Question 8

[Debt Trouble] Isabella has significant credit card debt following a semester abroad in Italy.Her tuition and living expenses had ended up costing more than she had anticipated.Isabella recently took a business law class and thought that she might be able to find a way out of her troubles.She owed $2,000 to Credit Card Company A and $3,000 to Credit Card Company B.She also owed $2,000 to the local Italian university for tuition and book expenses.Isabella is in negotiations with the university over the amount owed because one of the classes she had originally enrolled in was cancelled halfway through the semester.While the cancellation of that class did not significantly affect her academic career,Isabella thought that she should get at least some deduction on the overall tuition bill.Isabella called Credit Card Company A and told them that she was a student and could not afford to pay the entire $3,000 she owed.The representative of Credit Card Company A,who was working her last day,told Isabella just to pay $50,and that would be considered payment in full.The representative sent Isabella an e-mail to that effect.Isabella was very pleased and immediately quit her job at the campus bookstore,believing that with the reduction from Credit Card Company A,she would have a sufficient amount of extra money.Isabella then called Credit Card Company B and once again pled her case as a student.She talked Credit Card Company B into taking a used car with a blown-up engine worth around $1,000 in exchange for the debt.Transfer details regarding the car were worked out through e-mail.Finally,Isabella sent the university a check for $1,000 marked "paid in full." Much to her surprise and pleasure,the university did indeed cash the check.Isabella,however,was distraught to find that within 30 days,Credit Card Company A sent her a bill for $1,950,Credit Card Company B sent her a bill for $3,000,and the university sent her a check for $1,000 along with a bill for $2,000.Faced with all these claims,Isabella decided to look for work,and ended up finding work she enjoyed as a translator.Assume all credit card company representatives had authority to make the agreements at issue.
-What is Credit Card Company A's best argument in relation to enforcing Isabella's obligations?

Accepted Answer

A)An exception to the rule requiring consideration is promissory estoppel which
occurs when 1)a party makes a promise and either knows or should know that the other party will reasonably rely on it,2)the other party does reasonably rely on the promise,and,3)the only way to avoid injustice is to enforce the promise.Arguably,although Isabella quit her job in reliance on the promise,no injustice would occur through enforcement of the debt.
B)An exception to the rule requiring consideration is promissory estoppel which occurs when 1)a party makes a promise and either knows or should know that the other party will reasonably rely on it,2)the other party does reasonably rely on the promise,and,3)the only way to avoid injustice is to enforce the promise.Arguably,although Isabella quit her job in reliance on the promise,no injustice would occur through enforcement of the debt.

Question 9

What is Isabella's best argument in attempting to avoid obligations to Credit Card Company A?

Accepted Answer

A)An exception to the rule requiring consideration is promissory estoppel which occurs when 1)a party makes a promise and either knows or should know that the other party will reasonably rely on it,2)the other party does reasonably rely on the promise,and,3)the only way to avoid injustice is to enforce the promise.Arguably,Isabella relied to her detriment by quitting her job at the bookstore based on the credit card representative's promise although a complicating factor is that she later got another more likeable job.

Question 10

Which of the following is true regarding Tam's claim that by selling the communications book for a higher price,Ezra breached the contract he had with her?

Accepted Answer

A)Consideration was present,and the court does not weigh whether a good bargain
was made.
B)Consideration was present,and the court does not weigh whether a good bargain was made.
C)Consideration was present,and the court does not weigh whether a good bargain was made.
D)Consideration was present,and the court does not weigh whether a good bargain was made.
E)Consideration was present,and the court does not weigh whether a good bargain was made.

Question 11

Which of the following was the result in the case in the text Hamer v.Sidway,in which,after performance by his nephew,an uncle reneged on a promise to the nephew to pay him $5,000 if the nephew refrained from drinking liquor,using tobacco,swearing,and playing cards or billiards for money until he was 21 years of age?

Accepted Answer

A)The court enforced the agreement stating that "having fully performed the
conditions imposed,it makes no difference whether such performance was actually a benefit to the promisor."
B)The court enforced the agreement stating that "having fully performed the conditions imposed,it makes no difference whether such performance was actually a benefit to the promisor."
C)The court enforced the agreement stating that "having fully performed the conditions imposed,it makes no difference whether such performance was actually a benefit to the promisor."
D)The court enforced the agreement stating that "having fully performed the conditions imposed,it makes no difference whether such performance was actually a benefit to the promisor."
E)The court enforced the agreement stating that "having fully performed the conditions imposed,it makes no difference whether such performance was actually a benefit to the promisor."

Question 12

Nina,an experienced pool contractor,and Charlie,a homeowner,agree on a price for Nina to build a pool in Charlie's backyard.While the area is not known for rocks,Nina unexpectedly encounters a significant problem with solid rock in the backyard when she starts to dig.She tells Charlie that unless she receives an extra $5,000,she cannot complete the job.Charlie agrees,thinking to himself that he has a way out.When Nina finishes the pool,Charlie refuses to pay the additional $5,000.Which of the following is the most likely result of their dispute?

Accepted Answer

A)An exception to the preexisting duty rule is that if unforeseen circumstances cause a party to make a promise regarding an unfinished project that promise is valid consideration.
B)An exception to the preexisting duty rule is that if unforeseen circumstances cause a party to make a promise regarding an unfinished project that promise is valid consideration.
C)An exception to the preexisting duty rule is that if unforeseen circumstances cause a party to make a promise regarding an unfinished project that promise is valid consideration.
D)An exception to the preexisting duty rule is that if unforeseen circumstances cause a party to make a promise regarding an unfinished project that promise is valid consideration.
E)An exception to the preexisting duty rule is that if unforeseen circumstances cause a party to make a promise regarding an unfinished project that promise is valid consideration.

Question 13

[Bank Robbery] Safe Bank was robbed of a significant sum of cash by a robber later identified as Victor Victory.Safe Bank offered a reward of $10,000 to anyone who captured or provided information leading to the capture of Victor.Kareem,a police officer in town,promised Safe Bank officials that he would apprehend Victor.While on duty,Kareem arrested Victor at a restaurant in town.He found Victor after Ursula,Victor's girlfriend,told Kareem about various places Victor enjoyed eating.The bank refuses to pay either Ursula or Kareem any of the reward money.
-Which of the following is true regarding the offer of the reward?

Accepted Answer

A)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.
B)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.
C)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.
D)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.
E)In a unilateral contract a promise for an act),one party's consideration is the promise and the other party's consideration is the act.

Question 14

Upon graduating from college,Anum receives a job offer across the country and moves there,giving up her apartment and cancelling all her other job interviews in the process.After she arrives,she is informed that there is no job.In most states,what may she recover?

Accepted Answer

A)In most states,a party recovering under the theory of promissory estoppel may
recover reliance damages.
B)In most states,a party recovering under the theory of promissory estoppel may recover reliance damages.
C)In most states,a party recovering under the theory of promissory estoppel may recover reliance damages.
D)In most states,a party recovering under the theory of promissory estoppel may recover reliance damages.
E)In most states,a party recovering under the theory of promissory estoppel may recover reliance damages.

Question 15

Which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt when the debt itself,in its entirety,is in dispute,and the creditor agrees?

Accepted Answer

A)As recognized in Exhibit 15-3,there is an accord and a satisfaction on an
unliquidated debt,the existence of which is in dispute,for which a debtor offers to pay less money than is owed in full payment.
B)As recognized in Exhibit 15-3,there is an accord and a satisfaction on an unliquidated debt,the existence of which is in dispute,for which a debtor offers to pay less money than is owed in full payment.
C)As recognized in Exhibit 15-3,there is an accord and a satisfaction on an unliquidated debt,the existence of which is in dispute,for which a debtor offers to pay less money than is owed in full payment.
D)As recognized in Exhibit 15-3,there is an accord and a satisfaction on an unliquidated debt,the existence of which is in dispute,for which a debtor offers to pay less money than is owed in full payment.
E)As recognized in Exhibit 15-3,there is an accord and a satisfaction on an unliquidated debt,the existence of which is in dispute,for which a debtor offers to pay less money than is owed in full payment.

Question 16

[Garage Sale] While cleaning out his garage,Ezra offers to sell Mia a used computer for $200.Mia replies,"I'll think about it and buy it if I decide to do so." Ezra also calls Irina and offers to sell Irina a used business law book for $50.She asks if she can clean his apartment in exchange for the book,instead of paying cash,and he agrees.Ezra also agrees to sell a communications book for $5 to Tam,who promises to pick it up the next day.Meanwhile,Diego comes to visit and offers Ezra $45 for the business law book.Ezra sells it to him because he decides his apartment is clean enough.Diego also offers Ezra $50 for the used computer.Ezra sells it to Diego because he does not expect to hear from Mia.Diego sees the communications book and offers Ezra$45 for it.Ezra decides to forget about Tam and proceeds to sell the book to Diego for $45.The next day Irina shows up to clean Ezra's apartment and is very angry because Ezra did not save the book for her.Irina claims that Ezra breached their contract because they had a deal.Ezra says that they never had a deal because no consideration was present.He also says that even if cleaning house would be considered consideration,any housekeeping done would have been wholly inadequate to support receipt of the book because his house was already clean.Tam is also angry because Ezra sold the communications book,and informs him that he breached the contract he had with her.Ezra tells her that he had no obligation to hold the book for her because they had a unilateral contract.Two days after they first spoke,Mia tells Ezra that she would like the computer.She tells him that her response bound him and that he should have awaited her action.Ezra tells Diego that he needs to return everything for a full refund.Diego refuses.
-Which of the following is true regarding whether Ezra breached a contract with Mia?

Accepted Answer

A)A promisor who has not committed to doing anything has made an illusory
promise,which is not a promise at all and does not constitute consideration.
B)A promisor who has not committed to doing anything has made an illusory promise,which is not a promise at all and does not constitute consideration.
C)A promisor who has not committed to doing anything has made an illusory promise,which is not a promise at all and does not constitute consideration.
D)A promisor who has not committed to doing anything has made an illusory promise,which is not a promise at all and does not constitute consideration.
E)A promisor who has not committed to doing anything has made an illusory promise,which is not a promise at all and does not constitute consideration.

Question 17

Assuming no exception applies,which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt for which there is a dispute over the amount of the debt,and the creditor agrees?

Accepted Answer

A)As recognized in Exhibit 15-3,when there is a dispute as to the amount due and
a creditor accepts a debtor's offer to pay less than the full amount,there is an accord and satisfaction on that unliquidated debt.
B)As recognized in Exhibit 15-3,when there is a dispute as to the amount due and a creditor accepts a debtor's offer to pay less than the full amount,there is an accord and satisfaction on that unliquidated debt.
C)As recognized in Exhibit 15-3,when there is a dispute as to the amount due and a creditor accepts a debtor's offer to pay less than the full amount,there is an accord and satisfaction on that unliquidated debt.
D)As recognized in Exhibit 15-3,when there is a dispute as to the amount due and a creditor accepts a debtor's offer to pay less than the full amount,there is an accord and satisfaction on that unliquidated debt.
E)As recognized in Exhibit 15-3,when there is a dispute as to the amount due and a creditor accepts a debtor's offer to pay less than the full amount,there is an accord and satisfaction on that unliquidated debt.

Question 18

Which of the following is true regarding Ezra's claim concerning the inadequacy of house cleaning as consideration?

Accepted Answer

A)A promise to do something may constitute a type of consideration,and the court
does not weigh whether a good bargain was made.
B)A promise to do something may constitute a type of consideration,and the court does not weigh whether a good bargain was made.
C)A promise to do something may constitute a type of consideration,and the court does not weigh whether a good bargain was made.
D)A promise to do something may constitute a type of consideration,and the court does not weigh whether a good bargain was made.
E)A promise to do something may constitute a type of consideration,and the court does not weigh whether a good bargain was made.

Question 19

Nina,an experienced pool contractor,and Charlie agree on a price for Nina to build a pool in Charlie's backyard.Nina discovers that she did not initially include a sufficient charge for labor in her original price.She informs Charlie that unless she receives an extra $5,000 with which to hire workers,she cannot complete the job.Charlie agrees,thinking to himself that he has a way out.When Nina finishes the pool,Charlie refuses to pay the additional $5,000.Which of the following is the most likely result of their dispute?

Accepted Answer

A)Performance of an existing contractual duty is not good consideration.A pool contractor should have been aware of the amount of labor needed.
B)Performance of an existing contractual duty is not good consideration.A pool contractor should have been aware of the amount of labor needed.

Question 20

Which of the following is true regarding the dispute between Ezra and Diego regarding whether Diego must return anything?

Accepted Answer

A)Diego provided consideration in return for the books and computer,and thus he
has no obligation to return anything.
B)Diego provided consideration in return for the books and computer,and thus he has no obligation to return anything.
C)Diego provided consideration in return for the books and computer,and thus he has no obligation to return anything.
D)Diego provided consideration in return for the books and computer,and thus he has no obligation to return anything.
E)Diego provided consideration in return for the books and computer,and thus he has no obligation to return anything.

Quiz 15: Consideration