Chapter 15

Today, how many states will enforce contract under seal even if it is not supported by consideration?

10.

At law, minors are deemed to lack _______.

Capacity.

Every contract must be supported by the element of:

Consideration.

When does the court look at the adequacy of consideration in a contract?

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

Things that are not consideration:

Illusory promise, past consideration, and preexisting duty rule.

What is true about a partial payment of a liquidated debt?

The debt remains outstanding.

Exceptions to the preexisting duty rule:

UCC Article 2 (sale of goods), Additional work required to fulfill the promised obligation, and unforeseen circumstances.

What is consideration?

Value for value; bargain for exchange. Court rarely considers adequacy of consideration.

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

90.

What 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 sufficient consideration for a contract.

Consideration can be anything, as long as it is the product of a(n) _______.

Bargained-for-exchange.

Types of consideration:

Benefit to the promisee, detriment to the promisor, a promise to do something, and a promise to refrain from doing something.

In some cases, if past consideration was given with the expectation of _______ payment, the court may enforce the promise.

Future.

What is true about a unilateral contract?

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

With regard to the enforceability of a present promise, what is an accurate statement regarding past consideration?

It is no consideration at all.

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:

Not enforce the contract.

What are the conditions for promissory estoppel to occur?

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

What most accurately reflects the preexisting duty rule?

Performance of a duty you are obligated to do under the law is not good consideration.

Exceptions to need for consideration:

Promissory estoppel, contracts under seal, partial performance, quasi contract, and contractual remedies where they are not available under contract law.

In a _______ contract, if one party's consideration is a promise, and the other party's consideration will be an act.

Unilateral.

Partial payment allowed to discharge debt where the following are present:

Unliquidated debt, creditor agrees to accept as full payment, less than the creditor claims is owed "accord", and debtor pays agreed-upon amount (satisfaction).

If the parties disagree about the amount of money owed, the debt is _______.

Unliquidated.

Sheila tells Ed that if Ed fixes her air conditioner by the end of the day, Sheila will pay Ed $500. What is true?

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?

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

Current vs. Past Consideration:

Have to have consideration. Current: at the time the acceptance is made.

Ronald agrees that he owes a bank $10,000, as claimed by the bank. Ronald explains to the bank that he can only pay the bank $8,000 as full payment toward the money he owes. The bank agrees to accept $8,000 from him. The following month, Ronald receives his new bank statement claiming that he still owes the bank $2,000. Which of the following statements is true of this scenario?

If Ronald does not agree to pay the remaining $2,000, the creditor may sue Ronald for the balance it believes is owed.

When there is no dispute over the amount of debt or existence of debt, it is referred to as a _______.

Liquidated debt.

What does capacity on a contract mean?

Makes the contract voidable but does not mean the other party will not get paid or get the product.

Kevin is offered a job by a reputable company in a different city. To take the new job, Kevin quits his previous job and moves to the new city along with his family. When he shows up at work, he is told that there is no job. Kevin can sue the employer under the theory of _______.

Promissory estoppel.

_______ occurs when one party makes a promise knowing the other party will rely on it, the other party does rely on it, and the only way to avoid injustice is to enforce the promise.

Promissory estoppel.

Minors have:

Temporary condition and the ability to ratify or disaffirm a contract. Implied and express ratification.

If the parties dispute either the existence of a debt or the amount of a debt, that debt is called a(n) _______ debt.

Unliquidated.

In a(n) _______ debt, the parties either disagree about whether money is owed or dispute the amount.

Unliquidated.