Question 1

Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable

Accepted Answer

The answer of Industrial Engineering, Inc., promises to give stock...

Question 2

Fact Pattern 10-3 
Sally 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 10-3. Sally and Tasty

Accepted Answer

Rescinding their contract to the extent that it is executory means that both parties would be released from any future obligations under the contract, but any obligations already performed would not be undone. This is a reasonable solution given that both parties have changed their minds about the contract, but it would be unfair to require either party to perform duties they no longer want to undertake.

Question 3

Frisco offers to buy a Gibson guitar owned by Hayden for twice what she paid for it. She accepts and hands the guitar to Frisco. Her delivery of the guitar is

Accepted Answer

Delivery of the guitar is the consideration in the exchange. Frisco offered to buy the guitar for twice the amount Hayden paid for it, indicating that the exchange is a bargain. The value of the guitar is also legally sufficient. Therefore, Hayden's delivery of the guitar is consideration for the agreement.

Question 4

Mobile Media Company contracts to hire Nada for one year at $35 per hour, reserving the right to cancel the contract at any time after Nada begins performance by giving two weeks' notice. This promise is

Accepted Answer

The contract is enforceable because it specifies a clear rate of pay and a duration, with a provision for cancellation that requires notice, making it a valid agreement.

Question 5

Fact Pattern 10-2 
Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 10-2. If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased, the agree?ment is

Accepted Answer

The agreement is unenforceable due to the preexisting duty rule, which states that a party cannot demand additional compensation for performing a duty they are already contractually obligated to perform.

Question 6

Fact Pattern 10-2 
Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 10-2. If Teatro says it is asking for the extra $250,000 because it has encountered extraordinary unforeseen difficulties that will add consid?erable cost to the project, the agreement is

Accepted Answer

The agreement is enforceable because Teatro encountered unforeseen difficulties that will add considerable cost to the project. This falls under the doctrine of impossibility, which permits a party to demand additional compensation when unforeseen difficulties make it much more expensive to perform contractual duties.

Question 7

Mariah promises to pay her assistant Nadine $10,000 in consideration of the ser?vices she provided over the years. Mariah never pays Nadine. Mariah is

Accepted Answer

The answer of Mariah promises to pay her assistant Nadine...

Question 8

Mobile Minutes Company offers Nate an unlimited number of monthly phone minutes for $4.50 per month. Nate ac?cepts. If a dispute arises, a court would likely

Accepted Answer

Courts generally do not question the adequacy of consideration in contracts, as long as there is some consideration present (which in this case is Nate paying $4.50 per month). This means that the court would likely enforce the deal as is.

Question 9

Fact Pattern 10-1 
Bridey defends against a suit for breach of contract by Continental Mortgage Company by claiming that their deal-a mortgage loan secured by Bridey's purchase of a house-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 10-1. The court is most likely to evaluate the adequacy of consid?era?tion if

Accepted Answer

The court is most likely to evaluate the adequacy of consideration if there is a large disparity in the amount or value of the consideration exchanged, as this could indicate unfairness or unconscionability in the contract.

Question 10

Under a contract with Valley Vineyard, Walsh begins grading a terraced hillside for the planting of grapes. Halfway through the project, Walsh asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." Valley agrees but later refuses to pay. Their agreement is

Accepted Answer

The agreement is unenforceable because Walsh's performance was a preexisting duty, and any modification to the contract requires new consideration.

Question 11

Fact Pattern 10-3 
Sally 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 10-3. The next day, Sally changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sally and Tasty

Accepted Answer

Since both parties revoked the original contract, they are free to negotiate a new contract. This new contract can include changes in price or other terms. Therefore, Sally and Tasty may agree to a new contract that includes the new price.

Question 12

Quentin questions whether there is consideration for his contract with Rainey to exchange his performance with the Symphonic Saxophone Sextet for her payment of a certain amount. To constitute consideration, there must be

Accepted Answer

Consideration requires a bargained-for exchange, meaning that each party must give something of value or make a promise to give something of value in exchange for something of value given by the other party. In this case, Quentin is exchanging his performance with the Symphonic Saxophone Sextet for Rainey's payment of a certain amount, which constitutes a bargained-for exchange and therefore consideration. The other options (A, B, and D) are not sufficient on their own to constitute consideration. A payment or performance alone does not necessarily indicate a bargained-for exchange, and serious thought underlying each party's intent to contract is a requirement for a legally binding agreement, but it does not necessarily indicate consideration.

Question 13

Dave's uncle tells Dave that if "he feels that Dave deserves it," he will give Dave $1,000 when Dave graduates from college. Dave's uncle's promise is

Accepted Answer

Dave's uncle's promise is illusory because it lacks consideration. The promise is conditional upon Dave's uncle's subjective opinion of whether Dave "deserves" the money, which does not create a legal obligation. Furthermore, the promise is too vague and lacks certainty as there is no objective standard for determining whether Dave deserves the money. Therefore, the promise cannot be enforced.

Question 14

Produce Packaging Company promises its employees a 10 percent raise at the end of the year if productivity has increased and management feels the raise is warranted. Produce Packaging must

Accepted Answer

The answer of Produce Packaging Company promises its employees a...

Question 15

Sully signs a contract to borrow $200,000 from Riverside Bank to buy a house. In the contract, Sully agrees to pay a certain rate of interest on the amount of borrowed funds at monthly intervals for thirty years. This debt is

Accepted Answer

The debt in this scenario is liquidated because the amount owed (i.e. $200,000) is a fixed and determinable sum, and the terms of payment (i.e. the interest rate and monthly intervals) are specified in the contract. An illusory promise is a promise that appears to be a commitment, but is so vague or uncertain that it does not actually create an obligation. Past consideration means that something of value was given or done in the past, but is not currently being exchanged for the debt. An unliquidated debt is one where the amount owed is unknown or subject to dispute.

Question 16

Fact Pattern 10-1 
Bridey defends against a suit for breach of contract by Continental Mortgage Company by claiming that their deal-a mortgage loan secured by Bridey's purchase of a house-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 10-1. "Adequacy" of consideration refers to

Accepted Answer

Adequacy of consideration refers to "how much" consideration is given, focusing on the fairness or equivalence of the exchange in the contract.

Question 17

Fact Pattern 10-1 
Bridey defends against a suit for breach of contract by Continental Mortgage Company by claiming that their deal-a mortgage loan secured by Bridey's purchase of a house-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 10-1. If, as Bridey claims, the consideration for this contract is inadequate, it may indicate a lack of

Accepted Answer

Inadequate consideration may indicate a lack of voluntary consent on Bridey's part, meaning that she did not fully agree to the terms of the contract. This could be due to coercion or duress, or simply lack of understanding of the terms. None of the other choices address the issue of inadequate consideration.

Question 18

Valley Paragliders Association files a suit against Wing Designers, Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the considera?tion if

Accepted Answer

The court will not examine the adequacy of consideration if something of value passed between the parties. This is because consideration can be anything of value that is given or received in exchange for a promise or performance, and the court is generally not concerned with whether the consideration was a good deal or not.

Question 19

Sparky offers Teodora $1,000 for her collection of rare coins. She ac?cepts. If a dispute arises, a court would likely

Accepted Answer

In general, courts do not question the adequacy of consideration, as long as there was mutual agreement and the consideration had some value. Therefore, if a dispute arises in this case, the court would likely uphold the deal and not question the adequacy of the consideration.

Question 20

Fact Pattern 10-2 
Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 10-2. If Teatro offers no reason for the extra $250,000, but says only that it will stop work if it is not paid, the agreement is

Accepted Answer

This situation falls under the preexisting duty rule, which is a common law doctrine that says a party to a contract cannot demand additional compensation for doing something they were already obligated to do under the contract. Since Teatro was already under obligation to renovate the old theater for Urban Edge Productions, they cannot demand extra compensation without providing any specific reason. Therefore, the agreement is unenforceable due to the preexisting duty rule.

Quiz 10: Consideration