BUS Law Ch 10 Quiz
Sam offers Betty his bicycle for $75. Which of the following is an example of an illusory promise on the part of Betty?
"I'll take it if I decide to do so"
Garage sale. Richard, who is cleaning out his garage, offers to sell Dawn a used computer for $200. Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book. She is excited to receive the book and tells him that she will pick it up the next day. Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day. Meanwhile, Sam comes to visit, offers Richard $20 for the business law book and Richard sells it to him. Sam also offers Richard $50 for the used computer. Richard sells it to Sam because he does not expect to hear from Dawn. Sam sees the communications book and offers Richard $60 for it. Richard decides to forget about Jill and proceeds to sell the book to Sam for $60. Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer. Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her. Exactly 31 days later, Dawn tells Richard that she would like the computer. She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision. Richard tells Sam that he needs to return everything for a full refund. Sam refuses. Which of the following is true regarding Dawn's statement that her response was sufficient consideration to bind Richard to an option contract and that he should have awaited her final decision?
Dawn is incorrect on both counts. Her statement did not create an option contract nor was Richard bound to await her final decision.
In the Hamer v. Sidway case cited in the textbook, the New York Court of Appeals concluded that:
Forbearance is sufficient consideration for a valid and enforceable contract.
Which of the following is a valid Uniform Commercial Code (UCC) rule regarding checks marked "paid-in-full"?
If a business inadvertently cashes a check marked "paid-in-full," the business has 90 days from the date it cashed the check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
Which of the following is a correct statement regarding illusory promises?
Illusory promises are not consideration.
Which of the following is a correct statement regarding past consideration?
It is not consideration that will support a binding contract.
Courtney, who does not keep up with the price of current technology, agrees to buy a used computer from Jake for $2,500. Later, Courtney's friend Brice tells Courtney that she made a terrible deal and that she could get a better, new computer for no more than $1,000. Courtney tells Jake that she is not giving him any money because he has not been fair to her in terms of the computer price. Which of the following is the most likely result if Jake sues Courtney alleging breach of contract?
Jake will win because the court will not weigh whether a good bargain was made.
Was there sufficient consideration to support Marcy's agreement to throw a party for Sue?
No, there was insufficient consideration because Sue did not promise anything in exchange.
In the Smith v. Riley case referenced in the textbook, how did the Tennessee Court of Appeals rule regarding whether a purchase for "the sum of One Dollar ($1.00) and other good and valuable consideration" was sufficient consideration to support an agreement?
The Court ruled that the purchase amount was sufficient consideration.
Bank Robbery. Victor robbed Safe Bank of a significant sum of cash. Safe Bank offered a reward of $10,000 for anyone who captured or provided information leading to the capture of Victor. Ted, a police officer in town, promised Safe Bank officials that he would apprehend Victor. While on duty, Ted arrested Victor at a hamburger joint in town. He found Victor based upon a hunch he had after Ursula, who dated Victor, told him about various places Victor enjoyed eating. The bank refuses to pay either Ursula or Ted any of the reward money. In a lawsuit between the bank and Ted, regarding the reward funds, who is likely to prevail and why?
The bank is likely to prevail because Ted had a preexisting duty to catch Victor.
Sally goes to have her hair trimmed and agrees to pay $40 to the stylist. While there, Sally decides that she would also like highlights. The stylist informs her that highlights will cost an additional $30. Sally agrees to the price, gets the highlights, but refuses to pay the extra amount. What is the likely result in a dispute between Sally and the stylist, and why?
The stylist will win because she did additional work in exchange for the extra payment; therefore, Sally's promise was supported by valid consideration.
ank Robbery. Victor robbed Safe Bank of a significant sum of cash. Safe Bank offered a reward of $10,000 for anyone who captured or provided information leading to the capture of Victor. Ted, a police officer in town, promised Safe Bank officials that he would apprehend Victor. While on duty, Ted arrested Victor at a hamburger joint in town. He found Victor based upon a hunch he had after Ursula, who dated Victor, told him about various places Victor enjoyed eating. The bank refuses to pay either Ursula or Ted any of the reward money. In a lawsuit between the bank and Ursula, regarding the reward funds, who is likely to prevail and why?
Ursula is likely to prevail because an enforceable unilateral contract exists based on her provision of information leading to the capture of Victor.
Which of the following is true regarding a valid accord and satisfaction?
When the amount agreed upon is paid, the debt is fully discharged.
In a bilateral contract, the consideration for each promise is ______.
a return promise
Marcy's Mom. Marcy's mother, Sue, did not want her to date until she was older. She also wanted Marcy to attend law school. Just before Marcy started her freshman year in college, Sue told Marcy that if Marcy would refrain from dating until she received her law degree, then Sue would pay off all Marcy's school loans and throw in an extra $50,000. Marcy agrees and states, "Thanks, Mom, and by the way, when I graduate I'm throwing you a big party for all you've done for me!" Sue smiles and hugs Marcy. Marcy finished law school and asked for payment of her loans, the $50,000 in cash, and for a car. Sue said, "No way - I know you went out on some dates during law school, and I never agreed on the car." Marcy said those were just study nights and that her mother had never objected to Marcy's frequent statements that she wanted a car upon graduation. Sue asks about the party. Marcy tells her that she is nuts because there is no way Marcy can afford a party since Sue has backed out of the deal. After some serious negotiation Marcy and Sue settled their dispute with Sue agreeing to pay for half of Marcy's school loans and for all the expenses of Marcy's upcoming wedding, and to forget about Marcy's throwing a party for her. In reaching a settlement, Marcy and Sue entered into a(n) ______.
accord and satisfaction
Which of the following is an exception to the preexisting-duty rule?
additional work
In a unilateral contract, the consideration for a promise is ________.
an act
________ must pledge consideration for an agreement to be enforceable in the courts.
bothe the offeror and offeree
For a promise to be enforced by the courts, there must be ________.
consideration
Suppose that Eduardo agrees to purchase Caleah's car for $10,000. Eduardo's payment of $10,000 is the _____ Caleah will receive for her car.
consideration
Consideration is what a person will receive in return for ________.
performing a contract obligation
Which of the following is an exception to the rule requiring consideration?
promissory estoppel
________ is the legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract.
promissory estoppel
When an accord and satisfaction is at issue, the ______ is the payment, by the debtor, of the reduced amount.
satisfaction
Suppose that Dakiyah promises to pay Fernando $300 for his television. Fernando promises to sell Dakiyah his television for $300. The parties have not documented the transaction in writing. Which of the following is an accurate statement regarding this arrangement?
there is an oral contract
