Contracts: Consideration

Which of the following statements is true?

A legal detriment need not be involved any measurable loss to the promisee or benefit to the promisor.

WHich of the following is an example of an illusory promise?

A promise that the promisor will choose one out of several means of performance, most of which involve a legal detriment to the promisor.

Which of the following promises is commonly considered to be illusory?

A promise with an unqualified right to cancel or withdraw at any time.

Consideration with only a possibility of future value is considered _________.

Adequate consideration.

Which of the following would serve as sufficient consideration for a promisee by a creditor to discharge an existing debt?

An alternative method of payment.

In most states, when forming a contract, which of the following is not a necessary element of consideration?

An economic benefit to the promisor.

It is not enough that the promisee incurs ___________; the _________ (same word) must be the price of the exchange, and not merely fulfillment of certain conditions for making a gift.

Detriment

Which of the following would not be considered valuable consideration that supports a contract?

Fulfillment of a condition to receive a gift. The fulfillment of the condition must be of some benefit to the promisor to constitute property consideration.

Partial payment of the amount due on an existing debt _____ (is/is not) sufficient consideration for a promise by the creditor to discharge the debt.

Is not

Which of the following normally would not be an exception to the pre-existing legal duty rule?

One party's unforeseen difficulty in performing the contract.

Which of the following statements about suretyships is false?

Suretyship contract are enforceable without consideration.

Under UCC Article 2, a contract for the sale of goods may be modified without consideration only if:

The modification is sought in good faith.

A promise that contains a right to cancel or withdraw at any time may be valid consideration if:

The right is in any way restricted. (Even a restriction such as one requiring notice makes the promise not illusory).

Consideration will be considered adequate, provided that:

There is some possibility of future value in the bargained-for act.

Court will look primarily at the _______ of the surety's promise in determining whether a gratuitous suretyship contract is supported by proper consideration.

Timing.

What is the test used for determining if a promisee's act or forbearance serves as valuable consideration?

Whether the act or forbearance would be of nay benefit to the promisor.

If a gratuitous surety makes his promise to pay ______________ the creditor performs or promises to perform, the creditor's performance or promise will serve as proper consideration for the surety's promise, because the creditor has incurred a detriment in exchange for the surety's promise.

before (or at the same time as)

Conditional promises are generally enforceable, unless the _______.

condition is entirely within the promisor's control.

Conditional promises are generally enforceable, unless the ________.

condition is entirely within the promisor's control.

Which of the following generally would be considered adequate consideration for formation of a contract?

consideration with only a possibility of future value

A promise to perform a voidable obligation is enforceable _________.

despite the absence of new consideration.

If there is a possibility of _____ in the bargained-for act, adequacy of consideration will be found, even if the value never comes into existence.

future value

Token Consideration

is consideration entirely devoid of value and is usually not considered to be legally sufficient consideration.

A party suffers a ________ if he agrees to refrain from doing something that he has a legal right to so.

legal detriment

Valuable consideration must have:

legal value. This means it must constitute a nbenefit to the promisor or a detriment to the promisee.

There need not be ___________________ from the promisee, the promisor, or both parties at the time of the ratification.

new consideration. The ratification will be enforceable despite the absence of new consideration.

A condition may be based on a subjective standard, such as ___________ with the goods.

one party's satisfaction

"Requirement" contracts

promises to purchase all that one requires

"Output" contracts

promises to sell all that one decides to make

A conditional promise is unenforceable if:

the condition is entirely within the promisor's control.

An illusory promise is one in which _____________ is not actually bound to perform.

the promisor

A promise to choose one of several alternative means of performance is illusory (lacks consideration) if ________.

the promisor retains the power to select an alternative without legal detriment.

A promise that contains a right to cancel or withdraw at any time may be valid consideration if:

the right is in any way restricted.

Sham Consideration

this arises when the parties never intended that the consideration to be paid.

A promise to chose among one of several alternative means of performance, only one of which involves an actual legal detriment, will be deemed _____.

valuable consideration if the choice of performance rests with the promisee.

In judging the validity of consideration, courts of law _____ inquire into the adequacy of the consideration.

will not.