Chapter 12 BLAW ADD THIS
____ _____ means (1) doing that which the promisee was under no prior legal obligation or to do or (2) refraining from doing that which he was previously under no legal obligation to refrain from doing
Legal Detriment
A ______ contract results when the parties to a contract mutually agree to rescind their original contract and enter into a new one
Substituted
Consideration has two basic elements. What are they?
1. Legal sufficiency (something of value) 2. bargained for exchange
Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of: a.an illusory promise. b.past consideration. c.the pre-existing duty rule. d.good consideration.
A
Carlos ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door at $179.99. Carlos calls the store and demands the advertised price. They say okay. a.Carlos must pay $179.99. b.Carlos must pay $249.99. c.There is no contract. d.There is a contract for the reasonable value of the door.
A
Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on November 1 at Howard's house. Which of the following would constitute legally sufficient consideration? a.Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house. b.Rob comes to Howard's house to collect the $75 on November 1, but Howard only has $50. Rob tells Howard to forget the other $25. c.Since this is an unliquidated debt, the only legally sufficient consideration is Howard
A
Stan purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective, and a dispute arose as to the amount due and owing under the contract. Stan refuses to pay the $800, and Isaac is threatening to sue. Which of the following is correct with regard to this transaction? a.If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable. b.If Isaac agrees to accept $600 to settle the dispute a
A
The requirement of legally sufficient consideration: a.is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor. b.has nothing to do with the value of what is exchanged. c.means the subject matter that the parties agree to exchange has to have the same value. d.is the same as the requirement of adequacy of consideration.
A
Which of the following are the two basic elements to consideration? a.Bargained-for exchange and legal sufficiency b.Legal detriment and legal benefit c.Legal sufficiency and legal adequacy d.Promise and forbearance
A
Which of the following is enforceable without consideration? a.A new promise to pay a debt barred by the statute of limitations. b.An illusory promise. c.Under the common law, a promise made to satisfy a preexisting moral obligation. d.A promise by a father to pay someone for rendering emergency services to his injured son before the father had arrived at the accident scene.
A
William agrees to drill a well up to 200 feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well
A
A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract. a.illusory b.requirements c.output d.exclusive dealing
B
Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable? a.Yes, there is no way for the dealer to get the extra money anyway b.Yes, there is consideration for the modified amount c.No, there is no consideration and the
B
Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will. a.Janet has made an illusory promise. b.Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million. c.Janet has made a conditional promise which is not sufficient to form consideration. d.Janet's promise is legally inadequate and the courts will therefore not enforce it.
B
Tyler contracts to build a garage for Wilbur for a price of $6,000. Because of an increase in the cost of labor and materials, Tyler refuses to perform. Wilbur wants the garage, so he agrees to pay an additional $500. a.Wilbur must pay the additional $500. b.Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price. c.The substitute agreement is an illusory contract. d.The debt is a disputed one, and therefore Wilbur is obligated to pay
B
Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it." a.There is no contract because there is no mutual assent. b.There is no contract because there is no valid consideration. c.There is no contract because $10 is reasonably inadequate consideration. d.There is a contract with sufficient consideration.
B
Which of the following would most likely be enforceable? a.An agreement supported by past consideration b.A substitute agreement to settle an undisputed debt c.A debt agreed to seven years ago in a state where the statute of limitations is six years d.A promise following the rendering of emergency services that is not supported by new consideration
B
______ is the inducement for a promise or performance. It is what which is exchanged to make a promise enforceable.
Consideration
Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract? a.No, because Robbie gave no benefit to Aunt Ellie b.No, because Robbie did not suffer any detriment c.Yes, because stopping smoking will benefit Robbie's health d.Yes, because Robbie gave up a legal right
D
Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. a.The doctrine of promissory estoppel can be applied to this case. b.The promise to pay $20,000 is a promise to give a gift and i
D
Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. a.This is an illusory contract, because Darla doesn't know whether she will receive the money for sure. b.The consideration moving from Darla to Edward is the promise of $6,000 subject to a condition. c.Darla's conditional promise is sufficient consideration unless Darla k
D
Doug obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. a.Acme is obligated to use its best efforts to supply the goods even if no such clause appears in the written franchise agreement. b.According to the UCC, unless otherwise agreed, Doug must use his best efforts to promote the sale of the widgets in his territory. c.Under the UCC, such an agreement lacks consideration. d.Both (a
D
Jason's mother would like him to go to college, so in June he enrolls at State University. He also quits his job and tells his mother his plans to continue taking classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise? a.It is enforceable, because Jason returned to college. b.It is enforceable, because Jason is giving up the right to do something
D
Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed, only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement is most accurate? a.McHenry is not liable to Nancy since
D
Which of the following gratuitous promises are enforceable by statute? a.A good-faith contract modification in a contract for the sale of goods b.A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month c.A renunciation of a claim in a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods d.All of the above are enforceable by statute.
D
A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible? a.The employees of the bank b.An on-duty sheriff's deputy in the county where the arrest occurred c.An off-duty deputy sheriff from a county other than the one where the arrest occurred d.None of the above are eligible.
C
Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job unless Betty agrees to pay him $100 more. What law applies to this fact situation? a.The acceptance of additional money to settle a disputed claim is supported by consideration. b.A past obligation is sufficient consideration for a new promise. c.Andrew gives no additional consideration in return for modification of a preexisting contract. d.Betty
C
In which of the following situations will a smaller sum be unable to discharge a larger debt? a.If the smaller sum is paid before the due date of the larger debt. b.If an additional article or service is given together with the payment of the smaller sum. c.If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency. d.A smaller sum is never able to discharge a larger debt.
C
Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct? a.Marilyn will have to pay $20,000. b.This is a contract under seal which is enforceable. c.This is a modification of a preexisting contract, which under common law mu
C
Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay: a.$50, since that is the original agreement. b.$50, since a modification must be in writing. c.$60, since the modified agreement is supported by additional consideration. d.$60, since any subsequent agreement is enforceable.
C
Sue owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. She has been offered a two-year graduate fellowship, but she will not be able to pay the loan back if she accepts the fellowship. The bank manager tells Sue that if she pays $3,000 now, they will forgive the loan. Should Sue accept the offer? a.No, because the bank can still sue for the remaining $2,000 b.No, because the manager's promise is not binding on the bank c.Yes, because the early p
C
Which of the following requires consideration in order to be binding upon the parties? a.A written promise by a merchant to keep an offer to buy goods open for 14 days b.Material modification of a sale of goods contract under Article 2 of the UCC c.Material alteration of a personal service contract d.Settlement of a disputed debt
C
Which of the following statements is most accurate concerning charitable subscription promises? a.They are generally not enforceable. b.The courts equate them with gifts. c.They are generally enforceable if there is reliance by the charity. d.The Restatement uses a strict reliance requirement in relation to charitable subscriptions.
C
Which of the following will support a contract? a.An illusory promise b.Past consideration c.Forbearance to do an act d.A pre-existing public obligation
C
