Chapter 13 BLaw

Adequacy of consideration refers to a. "how much" consideration is given. b. the substantiality of the consideration exchanged. c. legally sufficient value in the eyes of the law. d. the intangible value to a contracting party of a thing exchanged.

"how much" consideration is given.

Key promises to pay Liv, his niece, $5,000 if she obtains her degree at Metro College, where she is in her third year. Liv graduates. Key must pay because a. obtaining a degree benefits Liv. b. Liv was already enrolled at Metro. c. a job can be hard to find after college. d. Liv obtained a degree at Metro.

Liv obtained a degree at Metro

To constitute consideration, there must be a. a payment. b. serious thought underlying each party's intent to contract. c. a bargained-for exchange. d. a performance

a bargained-for exchange

Buck and Cady are in an auto accident. Buck offers Cady $20,000 for her promise not to pursue a legal claim against him arising out of the accident. Cady agrees. This agreement is a. past consideration. b. promissory estoppel. c. a release. d. an illusory promise

a release

Gwen is indebted to Home Loan Company for $75,000. Gwen agrees to pay, and Home Loan agrees to accept, a lesser amount than the lender originally claimed was owed. The performance of this agreement is a. a satisfaction. b. an accord. c. an illusory promise. d. a release

a satisfaction

Etan is indebted to Finance Credit Corporation for $100,000. Etan agrees to pay, and Finance Credit agrees to accept, a lesser amount than the creditor originally claimed was owed. This agreement is a. a release. b. a satisfaction. c. an accord. d. an illusory promise

an accord

Cloud Storage Inc. promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is a. accord and satisfaction. b. an enforceable contract. c. an illusory promise. d. past consideration

an illusory promise

Ann's Sandwich Shop and Bob's Coffee Bar are adjacent businesses. Ann, whose small shop has little room for her customers to sit, offers Bob a discount on purchases if he will allow her customers to sit at the tables on the sidewalk in front of his store. Bob's forbearance from asking Ann's customers not to use his tables is legally sufficient consideration a. because Bob has a legal right to restrict the use of his tables. b. because Ann's customers will undoubtedly use Bob's tables. c. because Ann's small shop has little room for her customers to sit. d. under no circumstances

because Bob has a legal right to restrict the use of his tables

Sports Bar and Tasty Tacos are adjacent businesses with adjoining parking lots. Sports Bar offers Tasty a discount on purchases if the restaurant will not tow the cars of Sports Bar's patrons who park in the restaurant's lot. The discount is legally sufficient consideration a. because on acceptance, it will become a preexisting duty. b. because the offeror considers it to be adequate. c. under no circumstances. d. because it is a promise of something of value

because it is a promise of something of value

Recovery of Bud's debt to Credit Corporation is barred by a statute of limitations when Bud makes a partial payment. The creditor a. can obtain no more on the debt due to the statute of limitations. b. is estopped from asserting a right to recoup the rest of the debt. c. needs new consideration to recover more than the partial payment. d. can sue to recover the entire debt without consideration.

can sue to recover the entire debt without consideration

Fritz offers to buy a guitar owned by Holle for twice what she paid for it. She accepts and hands the guitar to Fritz. Holle's delivery of the guitar is a. not consideration because the exchange is not a bargain. b. consideration. c. not consideration because its adequacy is unfair. d. not consideration because the value is not legally sufficient.

consideration

While sailboarding, Jolie is injured when Kirby carelessly crosses her path. Kirby's insurance company offers Jolie $50,000 to release Kirby from liability, and she accepts. Later, she learns that her injuries are more serious than she realized. The release is a. unenforceable because the release is an illusory promise. b. unenforceable because Kirby has a preexisting duty to pay. c. unenforceable because Jolie's injuries are unforeseeably difficult. d. enforceable

enforceable

Holes Inc. begins digging a foundation at a construction site for Investment Company under a contract for a certain price. After six months, Holes demands a higher price because of extraordinary difficulties that were totally unforeseen at the time the contract was formed. An agreement to pay the higher price is a. enforceable due to unforeseen difficulties. b. enforceable as the consideration is past. c. unenforceable due to the preexisting duty rule. d. unenforceable as an illusory promise.

enforceable due to unforeseen difficulties

A fire threatens to engulf a commercial building in Middletown. The building's owner promises a cash reward to the Middletown Fire Department to extinguish the blaze. The firefighters cannot claim the reward because a. extinguishing the fire is the firefighters' preexisting duty. b. the promise of a cash reward is illusory. c. extinguishing the fire is a foreseen difficulty. d. extinguishing the fire represents past consideration

extinguishing the fire is the firefighters' preexisting duty

Dore's Aunt Em tells her, "If I feel you deserve it at the time, I will give you a new car when you graduate from college." Em's promise is a. illusory. b. a forbearance. c. enforceable. d. a preexisting duty.

illusory

Expo Center Inc. and Festival Music LLC have an executory contract. They agree to rescind it and simultaneously enter into a new contract. If the previous contract was subject to a preexisting duty, the new contract will most likely be a. invalid. b. valid. c. voidable. d. enforceable

invalid

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump a. is the consideration that creates Kim's obligation to pay Leo. b. imposes a moral obligation on Kim to pay Leo. c. imposes no obligation on Kim unless she is satisfied with the job. d. is not sufficient consideration because it is not goods or money.

is the consideration that creates Kim's obligation to pay Leo

Kris buys Liz's house for $300,000, which is the fair market value of the house. If the contract is later disputed in court, the court is likely to declare Kris's consideration a. past. b. legally sufficient. c. inadequate. d. illusory

legally sufficient

Rory questions whether there is consideration for his contract with Silver Spurs Club to exchange his performance of country music on certain dates for Silver's payment of a certain amount. To constitute consideration, the value of whatever is exchanged must be a. legally sufficient. b. precisely adequate. c. objectively worthy. d. practically sound

legally sufficient.

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Agency, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is a. not liable to Niki. b. liable to Niki under the preexisting duty rule. c. liable to Niki under the doctrine of promissory estoppel. d. liable to Niki under the concept of rescission

liable to Niki under the doctrine of promissory estoppel

Bistro Caterers contracts with Corporate Towers to cater the firm's business meetings. Later, the contract between Bistro and Corporate is completely rescinded. Even later, Bistro offers to make a new deal. Corporate is willing to deal, but for a new price. Bistro and Corporate a. may agree to a new contract that includes the new price. b. must perform the part of their original contract that is executory. c. must perform their original contract. d. may agree to a new contract, but it cannot include a new price.

may agree to a new contract that includes the new price.

Maria is the sheriff of Narez, Texas. Oscar robs a Narez gas station and a $500 reward is offered for his capture. When, later, Maria finds and arrests him, with respect to the reward, she can a. collect it. b. not collect it because it is not legally sufficient consideration. c. not collect it because it is an illusory promise. d. not collect it because she had a preexisting duty to capture Oscar.

not collect it because she had a preexisting duty to capture Oscar

Jen promises to pay Kam $500 because "she does not have as much money as other people." Jen's promise is a. enforceable because society wants people to keep their promises. b. enforceable because the redistribution of wealth is a valid social goal. c. not enforceable because Jen could have paid Kam more. d. not enforceable because Kam has not given consideration in return

not enforceable because Kam has not given consideration in return

Si promises to pay his personal assistant Tery $50,000 in consideration of the services she provided over the years. Si never makes the payment. Si's promise is a. not enforceable because the consideration is in the past. b. enforceable for the entire $50,000. c. not enforceable because the failure to pay is an unforeseen difficulty. d. enforceable to the extent of what Tery's services were actually worth

not enforceable because the consideration is in the past

EcoEnergy LLC files a suit against Fiber Optics Inc., claiming that the consideration for their contract is inadequate—that the plaintiff will not realize sufficient financial benefit from the deal to make it worthwhile. Most likely, the court will a. not question the adequacy of consideration. b. evaluate the fairness of the bargain. c. ask "how much" consideration was given. d. not determine whether consideration was exchanged

not question the adequacy of consideration

Sol offers Tiff $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely a. not question the adequacy of the consideration. b. rewrite the deal after questioning the adequacy of consideration. c. enforce the deal after questioning the adequacy of consideration. d. set aside the deal after questioning the adequacy of consideration

not question the adequacy of the consideration

Molly's motorcycle is damaged in an accident caused by Luc's negligence. Luc agrees to pay Molly $25,000 if she agrees to release him from further liability. Molly agrees. If Molly's damages ultimately exceed $25,000, she can a. recover the balance for lack of consideration. b. not recover the balance. c. recover the balance because the consideration was past. d. recover the balance due to unforeseen events

not recover the balance

Don slips and falls on a patch of ice on Ella's property. Ella offers Don $10,000 if he promises not to pursue any slip-and-fall legal claim against her. Don agrees, but later discovers that it will cost $40,000 in medical expenses for a latent injury. In Don's suit against Ella, Don will most likely recover a. nothing. b. the exact amount to pay the costs and no more. c. $30,000 to pay the costs over what Ella already paid Don. d. the estimated amount to pay the costs and any other liability

nothing

Raj defends against a breach-of-contract suit by Student Loan Corporation by claiming that their deal—a student loan—was unfair because the consideration for the contract was inadequate. With respect to Raj's defense, the court will most likely rule in favor of the lender on the ground that a. Raj performed an act that he was not otherwise obligated to undertake. b. Raj refrained from an act that he had a legal right to undertake. c. the adequacy of the consideration is not for the court to determine. d. Raj promised to do something that he had no prior legal duty to do

the adequacy of the consideration is not for the court to determine

Cindy, a real estate agent, sells her friend Doug's house without charging a commission. In return, Doug promises to give Cindy $1,000. This promise is not an enforceable contract because a. the promise of a payment of $1,000 is illusory. b. the house has already been sold—the consideration is past. c. selling the house was the agent's preexisting duty. d. selling the house was a foreseen difficulty.

the house has already been sold—the consideration is past

Ros contracts with Spicy Pizza to deliver its products. After the deal has been partially performed, both parties inform each other that they would like to cancel the contract. Ros and Spicy may rescind a. their contract to the extent that it is executory. b. their contract to the extent that it has been executed. c. their entire contract. d. none of their contract

their contract to the extent that it is executory

Apps Inc. promises to give stock options to Belden, a creative coder, for processes he has already designed. This promise is a. enforceable because it is an illusory promise. b. enforceable because it is a new contract. c. enforceable because it is supported by past consideration. d. unenforceable.

unenforceable

Under a contract with Soy Farms, Tai begins grading a terraced hillside for planting. Halfway through the project, Tai asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." The farm agrees but later refuses to pay. The agreement to pay more is a. unenforceable because Tai's performance was a preexisting duty. b. unenforceable because the farm's promise was illusory. c. unenforceable because Tai's request modified the contract. d. enforceable.

unenforceable because Tai's performance was a preexisting duty

National Trucking Company begins transporting crude for Oil Inc. under a contract for a stated amount per load. After six months, National demands an increase in the stated amount because ordinary business expenses have increased. Oil's agreement to pay the increased amount is a. unenforceable as an illusory promise. b. enforceable as the consideration is past. c. enforceable due to unforeseen difficulties. d. unenforceable due to the preexisting duty rule

unenforceable due to the preexisting duty rule

Onsite Restoration Inc. begins renovating houses for Property Company under a contract for a stated amount per house. After six months, Onsite demands an extra $20,000 per house, stating no reason for the extra $20,000, but asserting that it will stop work if it is not paid. The agreement is a. unenforceable as an illusory promise. b. enforceable as the consideration is past. c. enforceable due to unforeseen difficulties. d. unenforceable due to the preexisting duty rule

unenforceable due to the preexisting duty rule