Question 1

The promisor may make a promise to pay a sum of money to the promisee for the performance of a certain act.

Accepted Answer

This is a valid form of contract known as a "contract for consideration." The promisor offers to pay a specific amount of money to the promisee in exchange for the promisee performing the promised act.

Question 2

Valid consideration must be either the performance of an act or the payment of money.

Accepted Answer

Valid consideration can also include the forbearance to act (not doing something one has the right to do), or the promise to do any of these things, in addition to the performance of an act or the payment of money.

Question 3

A pledge or a subscription, which is a promise to donate money, is unenforceable.

Accepted Answer

A pledge or subscription is generally considered enforceable if it meets the criteria for a valid contract, including offer, acceptance, consideration, and intention to create legal relations.

Question 4

The Uniform Commercial Code dispenses with the requirement of consideration in certain contracts that involve a merchant's written firm offer that provides that the contract is irrevocable.

Accepted Answer

The Uniform Commercial Code (UCC) provides that a merchant's firm offer, in writing and signed by the merchant, may not be revoked for a period of time not to exceed three months if no consideration is required in exchange for the promise to keep the offer open. This exception to the requirement of consideration is found in UCC Section 2-205.

Question 5

Consideration in a contract may be more than just the promises exchanged by the parties; it may include the actual benefit gained and the detriment suffered by them.

Accepted Answer

Consideration refers to the bargained-for exchange between the parties, which can include promises made by both sides, as well as any benefit gained or detriment suffered by each party. Therefore, consideration can be more than just promises exchanged.

Question 6

The most common form of valid consideration is the promise of money by one party for the promise of an act by another.

Accepted Answer

This statement is true. The exchange of a promise of money for a promise of an act is a common example of valid consideration in contract law.

Question 7

Statutes, in some states, have permitted a person who has a claim against another to give up, or release, his or her claim without an exchange of consideration by making a written statement to that effect.

Accepted Answer

This is true. Such a statement is called a "release," and it is a valid legal tool in some jurisdictions.

Question 8

Sometimes the unequal bargaining power of parties to a contract gives one party an unfair advantage when dealing with those who lack the economic power to enter into a contract on an equal footing.

Accepted Answer

This statement is true. Unequal bargaining power can lead to unfair advantage for one party in a contract, particularly when dealing with those who are economically disadvantaged. Examples of this include contracts between employers and low-wage workers, or contracts between landlords and tenants.

Question 9

Contracts in which the parties have unequal bargaining power are known as unconscionable contracts.

Accepted Answer

The answer of Contracts in which the parties have unequal...

Question 10

The promises exchanged by the parties to a contract, either to give up something of value they have a legal right to keep, such as money or property; to do something they are not otherwise legally required to do, such as performing a service; or to refrain from an action is known as:

Accepted Answer

The promises exchanged by the parties in a contract are known as consideration. It is something of value that each party gives or promises to give to the other. This distinguishes a contract from a gift. The other choices are elements of a contract, but consideration is specifically related to the promises exchanged.

Question 11

Many consumer protection statutes have been passed that recognize some of the problems associated with unconscionable contracts and contracts of adhesion.

Accepted Answer

Consumer protection statutes have indeed been passed to address issues with unconscionable contracts (contracts that are excessively one-sided or unfairly burdensome to one party) and contracts of adhesion (contracts with terms that cannot be negotiated or changed by the consumer). Examples of such statutes include the Uniform Commercial Code and the Truth in Lending Act.

Question 12

Contracts based on moral consideration are generally enforceable.

Accepted Answer

Contracts based on moral consideration alone, without legal consideration (something of value exchanged between parties), are generally not enforceable in a court of law. Legal consideration is a required element for a contract to be valid.

Question 13

Jack promised to pay his nineteen year-old nephew $300 on the nephew's twenty-second birthday if the nephew refrained from smoking cigarettes until he graduated from Western State College. This contract is legal and illustrates the promise of:

Accepted Answer

This contract illustrates the promise of forbearance as consideration, meaning that the nephew is refraining from smoking cigarettes as consideration for the promised $300 on his twenty-second birthday.

Question 14

The exchange of money is a mandatory requirement for a consideration.

Accepted Answer

Consideration in a contract does not necessarily have to involve the exchange of money; it can be anything of value, such as goods, services, or even a promise not to do something.

Question 15

Many contracts, in which part of the consideration is forbearance, involve agreements not to compete.

Accepted Answer

It is common for contracts that involve forbearance to also include agreements not to compete, as one party is often being paid to refrain from engaging in certain activities that could compete with the other party.

Question 16

The promise to refrain from doing something that a party has a legal right to do, or the promise of inaction, is known as:

Accepted Answer

Forbearance refers to the promise to abstain from doing something that a party has a legal right to do. In a contract, this promise of inaction serves as consideration, which is a necessary element for a legally binding agreement. A general release is a legal document that provides a waiver of claims or liabilities against a party, while a pledge or subscription refers to a promise to donate or contribute funds to a cause or organization.

Question 17

Past consideration is a promise to repay someone for a benefit before it has been received.

Accepted Answer

Past consideration refers to benefits that have already been received and cannot be used as a basis for a new promise. A promise must be supported by current consideration, which is the exchange of something of value at the time the promise is made. Therefore, a promise to repay someone for a benefit before it has been received is not considered valid.

Question 18

Consideration required in an enforceable contract can take various forms such as exchange of promises, forbearance, and pledges or subscriptions.

Accepted Answer

This statement is true. Consideration is an essential element of a contract, and it refers to something of value given or promised in exchange for the other party's promise or performance. Consideration can take different forms, including exchange of promises, forbearance, and pledges or subscriptions.

Question 19

With regard to pledges and subscriptions, some courts have held that the consideration given by a charitable institution is the promise to use the money for the purpose for which it was donated.

Accepted Answer

Some courts have recognized that the consideration given by a charitable institution for pledges and subscriptions is the promise to use the donation for the stated purpose. This is known as the doctrine of charitable subscription.

Question 20

A valid contract may exist even if the consideration is a promise to perform an illegal act, or to avoid performing an act that is legally required to be performed.

Accepted Answer

A valid contract must have a lawful purpose and consideration. Promising to perform an illegal act or avoid a legally required act is not a lawful consideration and therefore, the contract would not be considered valid.

Quiz 10: Consideration