ACCT 324: Smartbook Chapter 15

Today, how many states will still enforce contract under seal even if it is not supported by consideration? 10 2 48 50

10

Bobby built a dog house for Rhonda and Rhonda agreed to pay Bobby $1,500. Rhonda sends Bobby a check for $1,000 with a note that says "this is all I can pay you." Bobby cashes the check. Which of the following is true? (Check all that apply.) The $1,500 is liquidated debt. Rhonda does have to pay Bobby the remaining $500. Rhonda does not have to pay Bobby the rest of the $500. There is no dispute that Rhonda owes Bobby $1,500.

The $1,500 is liquidated debt. Rhonda does have to pay Bobby the remaining $500. There is no dispute that Rhonda owes Bobby $1,500.

Which of the following is true about a partial payment of a liquidated debt? If more than 50% of the debt is paid, the debt is fully paid. The rest of the debt is forgiven if the partial payment is accepted. Liquidated debt is a product of fraud. The debt remains outstanding.

The debt remains outstanding.

Sam takes photos at the Callie's wedding. Sam thinks Callie owes him $1,000 for the wedding, while Callie think she only owes Sam $750. Callie sends Sam a check for $750. Which of the following is true? Callie still owes Sam $250. This is a liquidated debt only if the check was mailed within five days of the wedding. This is a liquidated debt. This is an unliquidated debt.

This is an unliquidated debt.

Wanda works for Humongous Corporation. Part of her job, for which she was hired 10 years ago, is to prepare a monthly report of all transactions in her department. After 10 years, Wanda tells Humongous that she wants another $500 a month to prepare the reports. Which of the following is true? $500 a month is sufficient consideration. Wanda has an existing contractual duty to prepare the report. Humongous must pay Wanda the $500 a month. Wanda is using undue influence to gain a $500 a month benefit she is not entitled to receive.

Wanda has an existing contractual duty to prepare the report.

When a person promises that they may do something if they want to, they have made an ______ promise. Such a promise is not sufficient consideration. illusory illuminative elusive erudite

illusory

Walter contracts to purchase Marie's mansion and estate for $50,000. Marie's mansion and estate has a property tax value of $1 million. There is no fraud or undue influence involved in the transaction. Which of the following is an incorrect statement regarding the enforcement of this contract? The court will not question the value of the exchanged consideration. The $50,000 is just as sufficient and valuable as a larger sum to support the legal enforcement of this contract. The court will find the $50,000 an insufficient amount of consideration and cancel the contract. The consideration for the contract is the mansion.

liquidated; accord

Performance of a duty you are obligated to do under the law is not good consideration. This is known as the ______ duty rule. collaborative preexisting conditional perfunctory

preexisting

Promissory estoppel and contracts under ______ are two exceptions to the common law rule requiring consideration. ratification subjective interpretation recognizance seal

seal

Scott needs his cars washed by tomorrow afternoon, so he calls Betty and tells her he'll pay her $100 if she washes both cars the next morning. Betty tells Scott, "I'll do it if I wake up in time." Which of the following statements is true? Betty has not promised to wash Scott's cars. Betty has promised to wash Scott's cars. Scott's promise to pay Betty $100 is an executed unilateral contract. Betty and Scott have formed a binding contract supported by consideration.

Betty has not promised to wash Scott's cars.

Without being asked, Johan washed his neighbor Bill's car every Saturday for a month. At the end of the month, Johan demanded payment of $100 from Bill for his services. Bill refused. If Johan sues for breach of contract, Johan will likely lose because there was no ______ exchange. executory equal bargained-for perfunctory

bargained-for

Every contract must be supported by the element of: _______. money forbearance return on investment consideration

consideration

If a business does inadvertently cash a "paid-in-full" check, it has _______ days to offer the debtor repayment in the same amount. 120 90 30 60

90

Which of the following is not an type of consideration? A promise to accept a gift A benefit to the promisee A promise to refrain from doing something A detriment to the promisor

A promise to accept a gift

Which of the following is a correct statement regarding a promise to refrain from doing something you are legally entitled to do? A promise to not do something you are legally entitled to do is good contract consideration only if it equals in value the other party's promise. A promise to not do something you are legally entitled to do is sufficient consideration for a contract. A promise to not do something you are legally entitled to do is good contract consideration only if the contract involves services, not goods. A promise to not do something you are legally entitled to do is good contract consideration only if the contract involves goods, not services.

A promise to not do something you are legally entitled to do is sufficient consideration for a contract.

Which of the following is true about a bilateral contract? (Check all that apply.) A promise to perform has value. A promise standing alone with nothing in return is sufficient consideration. It is never an oral contract. A promise in exchange for a promise can be consideration.

A promise to perform has value. A promise in exchange for a promise can be consideration.

Anna promises Elsa that she will clean Elsa's house and Elsa promises Anna she will pay Anna $100 when Anna is done. Which of the following is true? (Check all that apply) Anna and Elsa have formed a bilateral contract. There is no contract because there is no consideration. Anna's promise in exchange for Elsa's promise is sufficient consideration. Anna and Elsa's promises are an exchange of something of value.

Anna and Elsa have formed a bilateral contract. Anna's promise in exchange for Elsa's promise is sufficient consideration. Anna and Elsa's promises are an exchange of something of value.

Which of the following statements are true of legal consideration? (Check all that apply.) The consideration of love and affection has been deemed insufficient to support a conveyance. Any consideration, however small, will support a promise. A court will not regulate the amount of consideration in the absence of fraud. As a general rule, a contract need not be supported by consideration in order for it to be binding.

Any consideration, however small, will support a promise. A court will not regulate the amount of consideration in the absence of fraud.

Which of the following statements are true of legal consideration? (Check all that apply.) The consideration of love and affection has been deemed insufficient to support a conveyance. As a general rule, a contract need not be supported by consideration in order for it to be binding. Any consideration, however small, will support a promise. A court will not regulate the amount of consideration in the absence of fraud.

Any consideration, however small, will support a promise. A court will not regulate the amount of consideration in the absence of fraud.

Sheila tells Ed that if Ed fixes her air conditioner by the end of the day, Sheila will pay Ed $500. Which of the following is true? There is no contract because there is no consideration. If Ed fixes the air conditioner by the end of the day, Sheila does not have to pay him. Ed and Sheila have entered into a valid unilateral contract. Ed and Sheila have entered into a valid bilateral contract.

Ed and Sheila have entered into a valid unilateral contract.

William tells his neighbor George that he will give George a job as his butler if George promises to drop out of college. Which of the following is true? Walter must pay William for the referral. George's promise to refrain from going to college is not a consideration. William's promise is not enforceable. George's promise to refrain from going to college is consideration.

George's promise to refrain from going to college is consideration.

When does the court look at the adequacy of consideration in a contract? (Check all that apply.) If the court thinks that undue influence was used If the court thinks that the deal was not profitable for all the parties involved If the court thinks that one party made a good bargain If the court believes fraud occurred

If the court thinks that undue influence was used If the court believes fraud occurred

Which of the following is true about a unilateral contract? (Check all that apply.) It refers to a promise for a promise. It is a promise in exchange for performance. It is not a real contract because it lacks consideration. It is a real contract because it is a mutual exchange of value.

It is a promise in exchange for performance. It is a real contract because it is a mutual exchange of value.

Identify the true statements about past consideration. (Check all that apply.) It is enforceable if a party unexpectedly benefits from the past consideration provided by the other party. It is enforceable to the extent necessary to avoid injustice. It is enforceable if it was given with the expectation of future payment. It is enforceable if the circumstances of the party that provided the past consideration change.

It is enforceable to the extent necessary to avoid injustice. It is enforceable if it was given with the expectation of future payment.

Which of the following statements is true about past consideration? (Check all that apply.) It refers to a situation where one party provides value before the promise is made. It is enforceable by the law. It includes consideration from both sides. It is not a real consideration.

It refers to a situation where one party provides value before the promise is made. It is not a real consideration.

Joan teaches Bobby how to shoot an outside jump shot in basketball. Bobby becomes such a good basketball player he gets a full scholarship to college and becomes highly sought after by professional teams. Just before he signs a contract with a pro team, Bobby tells Joan, "I promise I'll give you $500,000 when I sign that contract. I owe you for teaching me that jump shot." Which of the following is true? Bobby can claim undue influence as a defense to the contract. Although Bobby does not owe Joan $500,000, he does owe her the reasonable value of her coaching services. Joan is entitled to $500,000 from Bobby when he signs his professional contract. Joan's work with Bobby in the past is not consideration to enforce Bobby's promise.

Joan's work with Bobby in the past is not consideration to enforce Bobby's promise.

Patty and Mario dispute whether Patty owes Mario $1,000. Patty asks Mario if she can give him her gold necklace, worth $500, in full payment of the debt. Mario agrees and takes the gold necklace. Which of the following is true? Patty still owes Mario $500 after giving him the gold necklace. Mario taking the necklace constitutes an accord and satisfaction. Patty has committed fraud. Mario must give the necklace back to Patty.

Mario taking the necklace constitutes an accord and satisfaction.

Phil tells Gloria that if she works for him full time, he'll pay her $1,000 a week. As a result and based on Phil's promise, Gloria quits her job at the department store and puts a down payment on a car. When Gloria shows up at Phil's to start work, Phil tells her he's changed his mind about the full time job. What are Gloria's options? Phil's promise is enforceable because it is supported by consideration. It was unreasonable for Gloria to quit her job and put a down payment on a car. Phil's promise is always unenforcible because it was not in writing. The best way to enforce Phil's promise is to assert promissory estoppel.

The best way to enforce Phil's promise is to assert promissory estoppel.

Walter contracts to purchase Marie's mansion and estate for $50,000. Marie's mansion and estate has a property tax value of $1 million. There is no fraud or undue influence involved in the transaction. Which of the following is an incorrect statement regarding the enforcement of this contract? The consideration for the contract is the mansion. The court will not question the value of the exchanged consideration. The $50,000 is just as sufficient and valuable as a larger sum to support the legal enforcement of this contract. The court will find the $50,000 an insufficient amount of consideration and cancel the contract.

The court will find the $50,000 an insufficient amount of consideration and cancel the contract.

Forrest hires Nadine to turn his basement into a family room for $50,000. About halfway through, Nadine discovers for the first time that the wood in the floor of the basement was riddled with mold and all the wood had to be removed and replaced. Nadine tells Forrest that it will cost him an additional $10,000 for this work. Which of the following is true? The mold was an unforeseen circumstance to the basement work, and it was lawful for Nadine to charge Forrest for the additional work. Nadine was entitled to charge Forrest the $10,000 to avoid an unjust enrichment. Nadine would only be able to collect the $10,000 if the contract was registered with the Secretary of State. Nadine had a preexisting duty to work on the basement and could not charge Forrest the extra $10,000.

The mold was an unforeseen circumstance to the basement work, and it was lawful for Nadine to charge Forrest for the additional work.

What are the conditions for promissory estoppel to occur? (Check all that apply.) To avoid an injustice, the promise must be enforced. A promise is exchanged for a promise. One party makes a promise and knows the other party will rely on it. A party reasonably relies on another's promise.

To avoid an injustice, the promise must be enforced. One party makes a promise and knows the other party will rely on it. A party reasonably relies on another's promise.

What are the conditions for promissory estoppel to occur? (Check all that apply.) To avoid an injustice, the promise must be enforced. One party makes a promise and knows the other party will rely on it. A promise is exchanged for a promise. A party reasonably relies on another's promise.

To avoid an injustice, the promise must be enforced. One party makes a promise and knows the other party will rely on it. A party reasonably relies on another's promise.

Identify exceptions to the preexisting duty rule. (Check all that apply.) UCC Article 2 (sale of goods) Additional work required to fulfill the promised obligation Unforeseen circumstances Lack of resources to fulfill the promised obligation

UCC Article 2 (sale of goods) Additional work required to fulfill the promised obligation Unforeseen circumstances

Under the UCC, writing "paid in full" on a check for less than the full amount of the debt owed will not be an accord and satisfaction unless the creditor inadvertently cashes the check and waits longer than 90 days to offer the debtor repayment in the same amount, or unless the check is sent to a special address for disputed amounts per the creditor's request. words "paid in full" are written conspicuously with red ink and 14-point font. check was sent to a credit card company. debt was for medical services.

check is sent to a special address for disputed amounts per the creditor's request.

A promise to refrain from doing something is sufficient: _______. conditioning deliberation determination consideration

consideration

In some cases, if past consideration was given with the expectation of ______ payment, the court may enforce the promise. gratuitous honorary future no

future

Leslie sold Tom her house for $5,000, but lied to Tom because she did not actually own the house. The court is likely to: _______. order Leslie to buy the house from it's true owner and give it to Tom enforce the contract and make Tom pay Leslie $5,000 not enforce the contract order Tom to pay the actual owner of the property

not enforce the contract

If the parties disagree about the amount of money owed, the debt is ______. unliquidated outstanding liquidated paid

unliquidated