LFoB Ch 12 Quiz and Concept Checks

A police officer who finds a missing child as part of his duties may not collect any reward for finding the child. Why? Because the officer did not accept the offer prior to finding the child. Because the reward is not a valid offer. Because the officer already had a pre-existing duty to do so. Because the officer did not promise to perform the act.

Because the officer already had a pre-existing duty to do so.

What is true about consideration and the parties to a contract? Choose 2 answers. Consideration may be given by some person other than the promisor. Consideration must be paid to the parties to the contract. Consideration to support a promise may be given to a person other than the promisor if the promisor bargains for that exchange. Consideration must be paid by the parties to the contract.

Consideration may be given by some person other than the promisor. Consideration to support a promise may be given to a person other than the promisor if the promisor bargains for that exchange.

Barbara's promise to pay Luiz $1,000 to not publish lies about her is not sufficient consideration because: Luiz could make over $10,000 in sales of his gossip tabloid. Luiz has a public duty to not defame Barbara. there is no proof that Luiz was planning to publish lies about Barbara. Luiz has a preexisting contractual obligation as a publisher to tell the truth.

Luiz has a public duty to not defame Barbara.

Geraldo is the owner/manager of Geraldo's Cleaning Service, a firm that cleans office building. Geraldo has a team of seven employees who do a fantastic job. To encourage them to keep up the good work, Geraldo tells his employees that if they continue to work hard until the end of the quarter and if he is pleased with his profits at the end of the quarter, he will give them each a $100 bonus. At the end of the quarter, the company's profits were extremely high. Will Geraldo have to make good on his promise of a $100 bonus for each employee? No, Geraldo will not have to award the bonuses because his offer of a $100 bonus if he is pleased with his profits was an illusory promise. No, Geraldo will not have to award the bonuses because the work of the employees is not valid consideration. Yes, Geraldo will have to award the bonuses because the work of the employees is valid consideration. Yes, Geraldo will have to award the bonuses because profits were extremely high.

No, Geraldo will not have to award the bonuses because his offer of a $100 bonus if he is pleased with his profits was an illusory promise.

What is true about promises made to satisfy a preexisting moral obligation? Choose 2 answers. Under the Restatement, they may be enforceable to prevent injustice. Under the Restatement, they are unenforceable for lack of consideration. Under the common law, they are unenforceable for a lack of consideration. Under the common law, they are enforceable as a public duty.

Under the Restatement, they may be enforceable to prevent injustice. Under the common law, they are unenforceable for a lack of consideration.

What is consideration? an offer to enter a contract an exchange of promises between two or more parties made through a bargaining process the fulfillment of a contract by performance by both parties the negotiation period of forming a contract during which each party considers what the other wants

an exchange of promises between two or more parties made through a bargaining process

A seller's agreement to sell their entire production to a particular purchaser is called: an output contract. a quantity contract. a requirements contract. an illusory contract.

an output contract.

What term describes a statement that is in the form of a promise but which imposes no obligation on the party making the statement? illusory promise voidable promise consideration insufficient promise

illusory promise

Some promises that otherwise would be unenforceable have been made binding by statute. Most significant among these are: (Choose 3 answers) irrevocable offers. renunciations. contract modifications. a promise under seal.

irrevocable offers. renunciations. contract modifications.

Ellen offers to sell her 1997 Mustang convertible to Fred for $2,000. Fred agrees to pay $2,000 for Ellen's Mustang. Before Fred picks up the Mustang, Ellen discovers that the Mustang is considered a classic car and is worth much more than $2,000. Ellen refuses to sell the Mustang to Fred, stating that the consideration is insufficient. If Fred tries to enforce the deal by taking Ellen to court: the court would probably not enforce the deal because there is no consideration flowing from Ellen to Fred. the court would probably enforce the deal because there was valid consideration on both sides. the court would not enforce the deal because $2,000 is too low to be valid consideration. the court would probably enforce the deal because the amount of consideration is never an issue.

the court would probably enforce the deal because there was valid consideration on both sides.

Elise rents a booth at a vintage market. Elise is selling an old violin and is asking $25 for it. Elise originally purchased the violin for $5 at a flea market, so she thought $25 was a pretty good markup. Customer Eddie buys the violin for $25. As Eddie is walking away, Eddie tells his friend, "What a great find! This violin is an antique Stradivarius worth $100,000! I can't believe my good luck!" Elise tries to rescind the transaction and take the violin back, but Eddie refuses. Elise files a lawsuit against Eddie for the return of the violin, alleging there was insufficient consideration for their contract. The court in this case will probably decide that: there was a bargained-for exchange, but the value was too low and decide the case for Elise. there was a bargained-for exchange and decide the case for Eddie. there was no bargained-for exchange and decide the case for Elise. as a merchant, Elise was in a stronger bargaining position than Eddie and decide the case for Eddie.

there was a bargained-for exchange and decide the case for Eddie.

In order for an accord and satisfaction to be valid, the debt must be: liquidated. unliquidated. over a year old. of fair market value for the exchange that took place.

unliquidated

Which of the following is true about a liquidated debt? Choose 3 answers. Which of the following is true about a liquidated debt? Choose 2 answers. A partial payment of a liquidated debt is sufficient consideration for its discharge if accepted by the creditor. The existence is undisputed, but the amount is disputed. The existence and amount are undisputed. A partial payment of a liquidated debt is not sufficient consideration for its discharge.

A partial payment of a liquidated debt is sufficient consideration for its discharge if accepted by the creditor. The existence and amount are undisputed. A partial payment of a liquidated debt is not sufficient consideration for its discharge.

What factors are required for the application of promissory estoppel? Choose 2 answers. The contract must involve a charitable organization. A promise that the promisor reasonably should expect to induce detrimental reliance does induce such action or forbearance. Enforcement is required to avoid injustice. The promise must be in writing.

A promise that the promisor reasonably should expect to induce detrimental reliance does induce such action or forbearance. Enforcement is required to avoid injustice.

Which of the following is a bargained-for exchange? Bobby gives his employee, Lina, an end of the year bonus. Alfred gives Charu a horse trailer in exchange for her boarding his three horses free for a year. Uncle Chao leaves Jeremy a 2010 red sports car in his will. Betty gives Miguel a bicycle for his birthday.

Alfred gives Charu a horse trailer in exchange for her boarding his three horses free for a year.

Alfred is having trouble with his car so he visits his friend Glen, who is a mechanic, for some free advice. Alfred asks Glen just to look at the car and determine what is wrong, but not to fix it. Glen looks at the car, determines the problem, and repairs the car using parts and materials he already had in his garage. Alfred takes the car out for a test drive, and it performs better than it ever has. Alfred tells Glen that because Glen fixed his car, when Alfred gets paid again he will buy Glen the new torque wrench that Glen has been wanting. A week later, Glen asks Alfred about the torque wrench, and Alfred tells Glen that he has changed his mind. If Glen sues Alfred to enforce his promise to buy Glen the torque wrench: a) Glen will win because consideration flowed from each party, and therefore a valid contract was formed. b) Alfred will win because the contract between Glen and Alfred was not in writing, and therefore not valid. c) Alfred will win because the act of repairing Alfred's car is past consideration, and therefore no valid contract was formed. d) Glen will win because all the elements required for a valid contract are present.

Alfred will win because the act of repairing Alfred's car is past consideration, and therefore no valid contract was formed.

Anna purchases a wedding dress and takes the dress to Jessica for alteration. Anna and Jessica agree that Anna will pay Jessica $75 for the alterations. After Jessica begins working on the dress, she has second thoughts. Jessica contacts Anna and advises her that the alternations will cost $150 instead of $75. Because Anna's wedding is in just two weeks, Anna reluctantly agrees. Once the alterations are completed, Anna pays Jessica the $75 originally agreed on. Is Jessica entitled to the additional $75? Yes, Jessica is entitled to the additional $75 because the original contract contained insufficient consideration. No, Jessica is not entitled to the additional $75 because there is no additional consideration for the revision to the contract. No, Jessica is not entitled to the additional $75 because contracts cannot be altered once the terms are agreed on. Yes, Jessica is entitled to the additional $75 because Anna agreed to it, forming a valid contract.

No, Jessica is not entitled to the additional $75 because there is no additional consideration for the revision to the contract.

What factors are used to judge if consideration is adequate to ensure a fair bargain? Choose 2 answers. Items or promises exchanged must be of nearly equal value. Promises must be made with voluntary consent. Consideration must be a promise to pay money. Promises exchanged may not be a preexisting duty.

Promises must be made with voluntary consent. Promises exchanged may not be a preexisting duty.

What is true of contract modifications? Under the common law, a contract for the sale of goods can be effectively modified without new consideration. Contract modifications are not allowed under the Uniform Commercial Code (UCC). Under the Uniform Commercial Code (UCC), a contract for the sale of goods can be effectively modified without new consideration. Under the Uniform Commercial Code (UCC), a modification of a contract for the sale of goods requires new consideration.

Under the Uniform Commercial Code (UCC), a contract for the sale of goods can be effectively modified without new consideration.

If a buyer agrees to purchase "all the widgets I require" and the seller agrees to sell him "all the widgets you require" is there sufficient consideration? No, this is illusory. Yes, because this is an output contract. No, because without knowing the number of widgets, there can be no bargained-for exchange. Yes, because this is a requirements contract.

Yes, because this is a requirements contract.

If unforeseen difficulties arise during the performance of a contract, may the parties change the terms of the contract without giving additional consideration? No, both parties must provide new consideration. Yes, but only if the modification is a rescission of the contract. No, at least one of the parties must provide additional consideration. Yes, if the modification is fair and equitable.

Yes, if the modification is fair and equitable.

The concept that parties have negotiated and agreed to give each other something in return for a promise or performance is called: a bargained-for exchange. payment of debt. sale and purchase. fair dealings.

a bargained-for exchange.

The term for a written offer signed by a merchant offering or promising to keep an offer to buy or sell goods open for a period of time is: a firm offer. a time-dependent offer. a revocable offer. an open offer.

a firm offer.

A creditor on a liquidated debt of $1 million may agree to take which of the following from the debtor in satisfaction of that debt? Choose 2 answers. a horse in exchange for the $1 million that is due 100 cents on the dollar a promise by the debtor not to engage in any illegal behavior $500,000

a horse in exchange for the $1 million that is due 100 cents on the dollar

What characteristics are required for consideration to be legally sufficient? Choose 2 answers. a legal benefit equal amounts of value from both sides a legal detriment market value of the item being purchased

a legal benefit a legal detriment

What is it called when one party to a contract promises to refrain from an act they have the right to do? a legal benefit self-control sufficiency a legal detriment

a legal detriment

An agreement will lack consideration if: a person makes a promise in return for an act which has yet to take place. a person settles a disputed claim through an accord and satisfaction. a person performs an act required by an offer. a person makes a promise in return for an act which has already taken place.

a person makes a promise in return for an act which has already taken place.

What consideration is exchanged in a bilateral contract? a promise for an act or forbearance a promise for a promise none money in exchange for an object or service

a promise for a promise

What consideration is exchanged in a unilateral contract? a promise for an act or forbearance a promise for a promise none money in exchange for an act

a promise for an act or forbearance

Which of the following is legally sufficient consideration? Choose 2 answers. a promise to do a legal act forbearance of a legal act a promise maybe pay money in the future forbearance of an illegal act

a promise to do a legal act forbearance of a legal act

What is a type of contract that a court will enforce even though the obligation was not originally enforceable? Choose 3 answers. a promise to pay a debt that was discharged in bankruptcy a promise to pay a debt that is no longer enforceable due to the statute of limitations a contract with subject matter that has subsequently become illegal a promise to pay an obligation that could have been avoided but was not

a promise to pay a debt that was discharged in bankruptcy a promise to pay a debt that is no longer enforceable due to the statute of limitations a promise to pay an obligation that could have been avoided but was not

In a bilateral contract, the consideration which supports the forming of the contract is: a past act. an act. a past promise. a promise to perform.

a promise to perform.

When the parties to a contract mutually agree to rescind their original contract and enter into a new one, this is called: a substituted contract. a reformed contract. a replacement contract. an alternative contract.

a substituted contract.

A promise made on account of something the promisee has already done is: (Choose 2 answers) called "past consideration." a bargained-for-exchange. not enforceable. enforceable.

called "past consideration." not enforceable.

Hubert promises to donate $200,000 to the Sunny Days Children Home to build a new wing. Saul is the director of Sunny Days. Saul hires a contractor and advances $50,000 for the contractor to get started on the new wing. The contractor begins work immediately by hiring subcontractors to begin the work. After a week, Sunny Days has still not received the $200,000 donation, so Saul contacts Hubert to inquire about it. Hubert tells Saul that he has changed his mind about the donation. Saul files a lawsuit against Hubert, seeking to enforce his promise to donate $200,000. Hubert defends by stating that there was no contract, just a promise. Under these facts, the court will probably: a) enforce the promise because Sunny Days relied on Hubert's promise and changed its position to its detriment. b) not enforce the promise because there is no consideration from Sunny Days. c) enforce the promise because it is morally correct to do so. d) not enforce the promise because it lacks all of the elements of a valid contract.

enforce the promise because Sunny Days relied on Hubert's promise and changed its position to its detriment.

Julian and Margaret live next door to each other and have become very good friends. For the last two years, Margaret's health has prevented her from doing chores around the house and going shopping, and Julian willingly provided those services to Margaret. As Margaret is moving into a nursing home, Margaret tells Julian she will give him $4,000 to compensate for the services Julian has provided to her for the last two years. Two weeks later, Margaret dies. A personal representative is appointed to handle the estate. The executor of Margaret's estate: a) is not legally obligated to pay Julian because the "contract" was based on past performance. b) must honor Margaret's promise to pay Julian $4,000. c) must pay Julian because the promise is not required to be in writing. d) is not legally obligated to pay Julian because the promise was not in writing.

is not legally obligated to pay Julian because the "contract" was based on past performance.

Angelica is the branch manager for the local Wal-Mart Store. Angelica promises all her employees that if they work hard and she believes they deserve a bonus, they will each get a $500 bonus at the end of the quarter. Every employee agrees to this deal. At the end of the quarter, sales are up $10,000. Angelica is: a) not obligated to award each employee a $500 bonus because her promise to do so was illusory. b) obligated to award each employee a $500 bonus because each employee agreed to the deal. c) obligated to award each employee a $500 bonus. d) not obligated to award each employee a $500 bonus because it is not economically feasible.

not obligated to award each employee a $500 bonus because her promise to do so was illusory.

In certain circumstances in which detrimental reliance has occurred, the courts will enforce noncontractual promises under the doctrine of: justifiable enforcement. promissory estoppel. renunciation. gratuitous modifications.

promissory estoppel.

Nellie's Kitchens makes the best chicken pot pies in the region and does a thriving business. Nellie's Kitchens enters into a contract with Ferndale Farms to purchase carrots for the pies. Rather than stating a specific amount of carrots in the contract, Ferndale Farms agrees to provide to Nellie's Kitchens all the carrots that Nellie's Kitchens needs. The contract between Nellie's Kitchens and Ferndale Farms is a: requirements contract and is enforceable. output contract and is enforceable. requirements contract and is unenforceable. output contract and is unenforceable.

requirements contract and is enforceable.

Summer works as a part-time transcriptionist for the local coroner's office. Summer is new to the job; she was hired because the coroner had a huge backlog of cases. Summer agrees to transcribe the entire backlog of 45 cases for $1,575, or $35 per case, and to complete the job within two weeks. The coroner agrees and is anxious to have the work completed. Three days before the deadline, the coroner contacts Summer and says that he will pay her an extra $500 if she completes the job before the deadline. Delighted, Summer agrees and completes the project. Upon receiving the reports, the coroner pays Summer $1,575. If Summer sues for the remaining $500: a) she will win because she had a preexisting contractual duty to complete the reports, and no additional consideration is being provided by Summer. b) she will lose because she had a preexisting contractual duty to complete the reports, and no additional consideration is being provided by Summer. c) she will lose because she had a preexisting contractual duty to complete the reports, and no additional consideration is being provided by the coroner. d) she will win because she had a preexisting contractual duty to complete the reports, and no additional consideration is being provided by the coroner.

she will lose because she had a preexisting contractual duty to complete the reports, and no additional consideration is being provided by Summer.