Business Law Chapter 8 Study Guide

D. all of these (duress, mutual mistake, and fraud)

A big difference in economic value of what one gives and receives may be evidence of

Legal Value

A change in a party's legal position as a result of a contract

Consideration

A legal concept that distinguishes between social promises and serious transactions

C. both a and b (that the debt exists, and on the amount of the debt)

A liquidated debt is one where the parties agree

Promisee

A person to whom a promise is made

Donor

A person who gives a gift

Promisor

A person who promises an action or forbearance

Donee

A person who receives a gift

Forbearance

A promise not to do something

Nominal Consideration

A token amount of money given as consideration

Gift

A transfer of ownership without receiving anything in return

Payment offered in full settlement by the debtor and accepted by the creditor to settle a disputed claim is a(n) _______ and satisfaction

Accord

A. promissory estoppel

An important exception to the general rule that mutual consideration is necessary for a valid contract or binding promise is

Something for which a detriment can be exchanged

Benefit

Distinguishing factor between social promises and real transactions

Consideration

Person to whom a debt is owed

Creditor

Consideration can be conferred by giving a benefit or incurring a(n)

Detriment

Person who receives a gift

Donee

Person who gives a gift

Donor

A debtor cannot settle a claim by paying less than the full amount even if additional consideration is given.

False

A promise to leave an offer open is enforceable under common law.

False

Consideration never consists of a change in a party's legal position as a result of the contract.

False

Generally, what the parties give and get as consideration need to be of equal economic value.

False

Most courts will enforce a promise made to a charitable organization even if no specific use for the money is stated.

False

Past performance by one party to a contract is always legally sufficient consideration for a new promise by the second party.

False

Promises can be enforced even if the promisee does not act in reliance on the promise.

False

Promises that involve a minimal economic loss to the promisee are always enforced.

False

The statute of limitations specifies a time limit for consideration.

False

There are no exceptions to the general rule that mutual consideration is necessary for a valid contract

False

Promise not to do something

Forbearance

Transfer of ownership without receiving anything in return

Gift

B. illusory

If a contract contains a clause that allows you to escape the legal obligation, the promise is said to be

Clause in a contract that allows you to escape the legal obligation

Illusory

Change in party's legal position

Legal Value

D. all of these (the exchange of two benefits, the exchange of two detriments, and the exchange of a benefit for a detriment)

Legal value is found in

Can a party terminate a requirements contract by stopping production?

No

Can a person under contract sign another contract that offers more money and benefits?

No

Can an act that has already been performed serve as consideration?

No

Does an output contract require a seller to supply all the needs of a particular buyer?

No

If a contract clause allows termination only after a change in defined circumstances, is the promis illusory?

No

If two gifts have legal value, are they consideration when they are promised?

No

Type of consideration that involves a token amount of money

Nominal

An agreement to buy all of the producer's production is a(n) _______ contract

Output

Person to whom a promise is made

Promisee

Charitable

Promises to what type of organizations are enforced if the organization stated a specific use for the contribution?

Exchange of Two Benefits

The most common form of legal value

B. the time limit for bringing a lawsuit

The statute of limitations specifies

A promise must be binding to be consideration.

True

An individual cannot sue for breach of contract or tort when the statute of limitations has passed.

True

Consideration can be given by conferring the benefit or by incurring a detriment

True

Merchants are bound by firm offers for up to three months.

True

Promises are enforced under the doctrine of promissory estoppel.

True

Promises can be enforced if the promisor knew that the promisee would rely on the promise.

True

The statute of limitations for most states is three years.

True

The transfer of ownership without receiving anything in return is called a gift.

True

To promise to do something that you are already obligated to do by law cannot serve as consideration.

True

Contract wherein the consideration is grossly inadequate so as to shock the conscience of the court

Unconscionable

Three Months

Under the UCC, what length of time must merchants leave offers open?

Promissory Estoppel

Under what doctrine are promises enforced?

Common

Under what type of law is consideration necessary for modifying a contract?

Fair Dealing

What implied duty do both parties have under contracts containing termination, output, or requirements clauses? (rfia nildeag)

Composition

What is a group of creditors who agree to accept less than what they are entitled to from a debtor? (iinocoposmt)

Firm Offer

What is a merchant's promise to leave an offer open called?

Creditor

What is a person to whom a debt is owed? (dctirero)

Release

What is a settlement made by parties when the liability is unliquidated? (elresae)

Illusory

What kind of promise is not binding? (rsyluiol)

Three Years

What length of time do most states use for a statute of limitations?

Use for the Money

What must charitable organizations specifically state in order for courts to enforce the pledge?

Termination Clause

What part of a contract allows businesses to withdraw if their circumstances change? (attmenirino seluca)

Statute of Limitations

What principle specifies a time limit for bringing a lawsuit?

Accord and Satisfaction

What type of agreement exists if two parties compromise on the amount of debt? (dcroca dna tssfcnitoaia)

Output

What type of contract requires a buyer to purchase all of a producer's production? (tutpou)

Requirements

What type of contract requires a seller to supply all the needs of a buyer? (sermteuqiern)

Liquidate

What type of debt occurs when the parties agree to the existence and the amount of the debt? (dqtiiudale)

Economic

What type of loss to the promisee requires the promise to be enforced?

A. an output contract

When buyers agree to purchase all of a particular producer's production, it is called

B. an option contract

When consideration is provided to keep an offer open, it creates

B. a gift

Which of the following does not require mutual consideration

C. past performance

Which of the following is not a part of consideration

Can a debtor settle a claim by paying less than the full amount and promising additional consideration?

Yes

Does existing public duty limit public officials in their promise making?

Yes

Does the debtor have to agree not to file for bankruptcy in a composition of creditors>

Yes

If a contract contains a termination clause for any reason, is the promise to perform illusory

Yes

If a promise is given for consideration, is it binding?

Yes

Is the payment of money sufficient consideration for the promise not to sue?

Yes