BL chapter 12
Which of the following promises must be supported by consideration to be enforceable?
A modification of an existing contract under common law
Which of the following would be an illusory promise?
Bill agrees to buy all the widgets he wants from Sara.
A contract under which the parties' obligation to perform arises only on the happening of a stated event lacks the requisite mutuality of obligation if the specified event may never occur.
F
Bill Businessman has a bad day one Monday morning and signs a contract to buy a piece of real property for $250,000. Later he realizes he has been had, because the property is only worth $100,000. Bill can avoid the contract based on inadequacy of consideration.
F
In a unilateral contract, each promise is the consideration for the other, a relationship that has been referred to as mutuality of obligation.
F
The adequacy of consideration is the same as the legal sufficiency of consideration.
F
The agreement of a seller to sell her entire production to a particular purchaser is an illusory agreement because the purchaser doesn't know the quantity being purchased.
F
The doctrine of consideration requires only that the promise or performance of one party be legally sufficient.
F
Under the Code, the modification of a contract for the sale of goods requires the furnishing of additional consideration, just as required under the common law.
F
Slick owes Gullible $50. Slick offers to let Gullible have Slick's pocket knife if he will accept $25 and forgive the rest of the debt. Later Gullible sues for the balance of the debt.
Slick will win because the knife constituted legally sufficient consideration
At common law, a modification of an existing contract must be supported by new consideration in order for the reformed agreement to be enforceable.
T
Bill Businessman agrees to buy 2,000 widgets from the Widget Corporation of America next year for $60 a widget if he wants to for his business. This is an illusory contract.
T
Bill purchased 500 pairs of shoes from Sam at a contract price of $1,000. Fifty pairs were defective and a dispute arose as to the amount owing under the contract. Finally, Bill sent a check for $800, marked it "paid in full," and sent a letter to Sam explaining his reasons for thinking $800 was fair. Sam didn't respond, but he cashed the check. The debt is discharged.
T
In the absence of legal consideration, a promise may nevertheless be enforceable under the doctrine of promissory estoppel if the promisee has relied on the promise to his detriment.
T
The performance of a preexisting contractual obligation that is neither doubtful nor the subject of honest dispute is not legally sufficient consideration, because the doing of what one is legally bound to do is neither a detriment to the promisee nor a benefit to the promisor.
T
To be legally sufficient, the consideration for the promise must be either a legal detriment to the promisee or a legal benefit to the promisor.
T
Under the Code, a merchant's offer to buy or sell goods is not revocable for lack of consideration during the time stated that it is open or if no time is stated, for a reasonable time, but in either event for a period not to exceed three months.
T
Words of promise that make the performance of the purported promisor entirely optional result in an illusory contract.
T
Which of the following is legally sufficient consideration
The settlement of a debt subject to honest dispute as to its amount
Carl Contractor pledges to contribute $500 to the local United Fund for charity.
There is the probability of reliance by the United Fund and the promise will be enforced under the doctrine of promissory estoppel
The requirement of consideration is satisfied by:
a promise exchanged for a promise, a promise exchanged for an act
Debbie promises to pay Bill $2,000 if Bill paints Debbie's house. Bill doesn't say a word but paints Debbie's house. This is an example of:
a unilateral contract
Colleen agrees to pay $10 for David's computer which is worth $300. Colleen's consideration:
appears to be inadequate but is probably legally sufficient
To be legally sufficient, the consideration for a promise must be:
either a legal detriment to the promisee or a legal benefit to the promisor
A promise by Andrew to pay Barry $1,000 if he refrains from suing Andrew, which is accepted by Barry not suing is:
enforceable because Andrew has received a legal benefit, enforceable because Barry has incurred a legal detriment by refraining from bringing suit, supported by consideration
Which of the following is necessary in order to satisfy the consideration requirement?
legal sufficiency, bargained-for exchange
Crime Stoppers offers a reward of $500 for information leading to the arrest and conviction of a criminal who has committed several recent burglaries. Paul Police Officer has been working on the case and applies for the reward based upon information he has gathered while on duty. Paul cannot collect the reward under the:
preexisting duty rule
Widget Manufacturing Corporation of America contracts with the Poly Plastic Company of Wisconsin to buy from Poly all of the plastic it will need next year in its manufacturing process. This is an example of a(n):
requirements contract.