Chapter 13 Consideration Practice Questions

Consideration can be defined as something of __________ given in exchange for a __________.

value, promise

Consideration is the _________ given in exchange for a promise. A contract cannot be formed without ___________ consideration.

value, sufficient

Something of legally __________ value must be given in exchange for a promise. This may consist of a promise, a ____________ or a forbearance.

Sufficient, performance

T/F: Carmen agrees to cook 20 dinners for Hal. In exchange, Hal will repair all of the plumbing in Carmen's house. Carmen has offered legally sufficient consideration because Carmen has promised something of value.

True

T/F: If two parties substitute a new contract for an old one and the court finds that there was a preexisting duty, then the new contract will be invalid because there was no consideration.

True

T/F: Past consideration is the equivalent of no consideration.

True

T/F: Something does not have to be direct economic or financial value to be considered legally sufficient consideration.

True

Shockingly inadequate consideration can indicate the existence of what exceptions? (3)

Undue influence, duress, fraud

In the interest of fairness and equity, the courts may allow an exception to the preexisting duty rule when __________ ______________ involved unforeseen difficulties.

Contract performance

A preexisting duty might exist because of a duty imposed by a pervious ____________ or a duty imposed by a _________.

Contract, law

The law recognizes that two parties can mutually agree to cancel their contract to the extend that it is _______.

Executory

T/F: Freedom of contract is absolute even in the presence of undue influence.

False

T/F: If an employer asks a current employee to sign a non-compete agreement, his or her employment is sufficient for the agreement.

False

T/F: Something must be of established market value to be considered legally sufficient consideration.

False

Constance tells Jill, her best employee, that: "Your work is so good, if I like what you do over the next six months, I'll give you a $1,000 bonus." Constance does not give Jill the bonus so Jill sues. Most likely Jill will not win because this is an

Illusory promise

Dewitt tells his daughter: "In consideration of the fact that you are not as wealthy as your sisters, I'm going to give you $100,000." Is the element for bargained for exchange present here?

No, no consideration

Something of legally sufficient value may consist of the performance of an action that one is otherwise not __________ to undertake. Something of legally sufficient value may consist of __________ from an action that one has a legal right to undertake. (Also called forbearance.)

Obligated, refraining

Something of legally sufficient value may consist of a promise to do something that one has no ________ legal duty to do.

Prior

The second element of consideration is that it must provide the basis for the bargain, so the item of value must be given or promised by the promisor in return for the promisee's:

Promise, performance, or promise of performance

An award is posted by a private group for information leading to the arrest of a criminal. Who is not allowed to accept the reward?

Sheriffs