Module 6 Self -Assignment

For a court to enforce a promise, who must offer consideration?

Both parties

Suppose Victor promises to stop smoking cigarettes during the winter. What type of promise has Victor made?

A promise to refrain from doing something

The minor's right to disaffirm is designed to protect the minor from competent parties who might otherwise take advantage of him or her. But most states have determined that the minor should not have the right to disaffirm which of the following types of contracts?

All of these - Educational loan contracts - Enlistment in the armed services - Marriage contracts In most states, courts or state legislatures have determined that the minor should not have the right to disaffirm contracts for life insurance, health insurance, psychological counseling, the performance of duties related to stock and bond transfers and bank accounts, education loan contracts, child support contracts, marriage contracts, and enlistment in the armed services

Which of the following terms is not a condition required in promissory estoppel?

All of these I. One party makes a promise knowing the other party will rely on it. II. The other party does rely on the promise. III. The only way to avoid injustice is to enforce the promise

Which of the following examples has never been a way of identifying a contract under seal?

If both parties sign the contract, it is presumed to be under seal Today, sealed contracts are typically identified with the word seal or the letters L.S. (an abbreviation for locus sigilli, which means "the place for the seal") at the end. Consumers may also purchase contract forms with a preprinted seal. The parties using them are presumed, without evidence to the contrary, to be adopting the seal for the contract

Bekah agrees to do bodywork on Fatima's car. In exchange, Fatima agrees to be a poker dealer at Bekah's underground casino. In the state where Bekah and Fatima live, there is a gaming statute that says all games of chance other than slot machines and the state lottery are illegal. Would the agreement be enforceable?

No, because part of the agreement violates a law and the agreement therefore calls for crime Contracts cannot be for illegal purposes or require illegal acts for performance. Any agreement to commit a crime or tort is illegal and unenforceable

Donna is an accountant and decides to do her friend Mike a favor by filing his taxes for free. Mike is very thankful and tells Donna "I will pay you $500 for being so kind and generous!" Mike fails to keep his promise and does not pay Donna the $500. Donna then brings an action to have the promise enforced. Will the court hold that a contract exists?

No, past consideration is no consideration at all For a promise to be enforceable there must be bargaining and an exchange.A contract cannot be based on consideration provided before the promise was made

Frank works as a cell phone salesman. He has worked at the same company for the past two years, and one day his boss approaches him with good news. He says because Frank has sold so many phones lately, he is going to give Frank a $500 bonus. Three weeks later, Frank has still not received the bonus. Can Frank sue his boss to enforce the promise?

No, this is an example of past consideration A promise cannot be based on consideration provided before the promise was made.

Eugene agrees to finish painting Hazel's house within two weeks. A week in, Eugene realizes he cannot finish without additional help. He tells Hazel he will need an extra $700 to do this. Hazel agrees. With the additional help, Eugene finishes painting the house within the agreed two weeks. Does Hazel have to pay the extra $700?

No, under the preexisting duty rule, Hazel does not have to pay under the preexisting duty rule, performance of a duty you are already obligated to perform under contract is not good consideration.

Which of the following is an exception to the preexisting duty rule?

Unforeseen circumstances If unforeseen circumstances cause a party to make a promise regarding an unfinished project, that promise is valid consideration

Suppose Xavier receives an offer to play on a minor-league hockey team a few states away from where he currently lives. He moves out of his apartment, turns down offers from other teams, and moves all his possessions to a new apartment close to the hockey arena. After moving there, Xavier is then told there is no position for him anymore! May he sue the hockey team?

Yes, this situation looks like promissory estoppel 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, even though it is not supported by consideration

Usury occurs when ________

a party gives a loan at an interest rate above the legal maximum

Covenants not to compete in conjunction with the sale of a business are generally __________ if they are for a reasonable length of time and involve a reasonable

enforceable Public policy requires fairness in business transactions, which does not occur when people profit from the sale of a business and then start a new business that destroys the one they just sold.

Suppose Markus offers to sell Zara his surfboard for $200. Zara responds, "I'll look at it on the weekend, and if I like it, I'll pay you." At this point, Zara has not committed to doing anything. The law considers this a(n) ____________

illusory promise An illusory promise is no promise at all and not valid consideration

A person has _________ to enter into a contract if she suffers from a mental illness or deficiency that prevents her from understanding the nature and obligations of the transaction

limited capacity a person may disaffirm the contract at any time until a reasonable time after she no longer suffers from the mental deficiency.

In some states, courts consider the purpose of the licensing statute when determining the effect of the agreement. If a licensing statute is intended simply to generate revenue, then the contract of an unlicensed person is _________

valid If it is to provide government control over the profession or generate revenue, most states allow enforcement of the contract. Although the unlicensed professional is acting in violation of the law and is usually required to pay a fine for working without a license, there are no grave reasons the contract should not be carried out

After a football game, Tyler and Austin want to enter into a contract together. Tyler is completely sober, but he knows Austin is very intoxicated and is so impaired that he is unable to understand the terms of the contract. If they enter into a contract, the contract would be ________

voidable If the sober party is aware that the intoxicated person is so impaired that he is unable to understand his legal obligations under the contract he is entering into, then this type of contract is voidable