Chp 15 - BA3301

Which of the following is not a legal detriment? a. A 20 year old who lives in a state where the drinking age is 21 promises not to drink alcohol. b. A 22 year old who lives in a state where the drinking age is 21 promises not to drink alcohol. c. An 85 year old with a valid driver's license promises that she will not drive on superhighways anymore. d. The victim of libel promises not to sue.

a. A 20 year old who lives in a state where the drinking age is 21 promises not to drink alcohol.

Consideration in a bilateral contract always involves both a. A legal benefit and a legal detriment b. A legal detriment and a legal impediment c. A legal benefit and a legal waiver d. A legal waiver and a legal renunciation

a. A legal benefit and a legal detriment

Mutuality of consideration is a requirement for a (n)_________________. a. Bilateral contract b. Unilateral contract c. Action for promissory estoppel d. Firm offer under the Code

a. Bilateral contract

Which of the following is false about a renunciation? a. Renunciations are valid in common law but not under the Code b. A written renunciation does not require consideration. c. An oral renunciation does require consideration. d. The right that is waived in a renunciation is a contract right.

a. Renunciations are valid in common law but not under the Code

Big Oil Company has a contract with homeowner to deliver however much heating oil homeowner needs for the fall and winter seasons. This is an example of a(n) __________________contract. a. Requirements b. Output c. Unilateral d. Consumer lease

a. Requirements

Famous Chef told Shrimp Boat Captain: I will buy your catch if I think the shrimp are large enough." What is the status of this promise? a. This is a valid promise because the chef must make the decision in good faith. b. This is a valid promise because size is a quantifiable term. c. This is an illusory promise because the chef has complete control over whether or not he will keep the promise. d. This is an illusory promise for a contract but a valid promise for promissory estoppel.

a. This is a valid promise because the chef must make the decision in good faith.

Promissory estoppel is often used in which of the following business situations? a. When a contractor submits a bid in reliance on the bids of his subcontractors. b. When a businessperson reasonably relies on representations that he will get a franchise. c. When employees rely on employer promises about pensions and benefits, d. All of the above are likely business applications of promissory estoppel.

a. When a contractor submits a bid in reliance on the bids of his subcontractors.

7. Which of the following is an illusory promise? a. "I will buy tickets to the World Series if the Red Sox win the Pennant." b. "I will go with you to the donkey basketball game if I can't think of anything better to do." c. "I will drive you to work if your car is still in the repair shop." d. "I will buy your car if my husband likes it."

b. "I will go with you to the donkey basketball game if I can't think of anything better to do."

Which element of a contract is met by a bargained-for exchange? a. Agreement b. Consideration c. Capacity d. Legality

b. Consideration

Customer ordered fried chicken strips at the drive-in window of Famous Burger. One of the "strips" turned out to be an entire chicken head, battered and deep fried. Famous Burger tested the head and found that it was, indeed, cooked in their batter and in their oil. Pictures of Customer with the fried head showed up in newspapers and on the Internet. Famous Burger offered Customer a cash settlement in exchange for Customer's promises not divulge the amount of the settlement, sue Famous Burger over the incident, or ever speak of it in public again. Agreeing not to exercise these three rights in exchange for the settlement is an example of ____________________. a. Renunciation b. Forbearance c. An accord and satisfaction d. Restitution

b. Forbearance

Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim catches during the season for $35 per bushel. This is an example of a (n) ___________contract. a. Requirements b. Output c. Unilateral d. Implied in law

b. Output

Under which of the following circumstances will cashing a check marked "paid in full" create an accord and satisfaction? a. The check is for a lesser sum that the amount due on a liquidated debt. b. The check is for an unliquidated debt and both parties know of the dispute. c. The check is for any transaction governed by the Code. d. The check is in payment of a court judgment.

b. The check is for an unliquidated debt and both parties know of the dispute.

In an accord and satisfaction, the accord is a. The old agreement b. The substitute agreement c. The performance of the action called for in the substitute agreement. d. The liquidated portion of a debt.

b. The substitute agreement

Which of the following is an example of an unliquidated debt? a. A promissory note for the sum of $10,000 to be repaid in 6 years at 5% interest. b. A cell phone service contract for $29.99 per month. c. A bill sent to homeowner by contractor for an additional $500 for cost overruns: owner claims he will pay only $250. d. An installment sales contract for the purchase of a $5,000 mower with $200 down and the rest financed at 8% for 3 years.

c. A bill sent to homeowner by contractor for an additional $500 for cost overruns: owner claims he will pay only $250.

Which of the following statements is true about modifying contracts governed by the Code? a. No new consideration is required to modify an existing contract. b. Modifications must be made in good faith c. Parties may agree that all modifications to an existing contract must be in writing. d. All of the above are true statements.

d. All of the above are true statements.

Promissory estoppel is best described as a. A contract remedy for breach of bilateral contracts b. A contract remedy for breach of unilateral contracts. c. An equitable remedy when an accord and satisfaction fails. d. An equitable remedy when one party suffers an unbargained-for detriment.

d. An equitable remedy when one party suffers an unbargained-for detriment.

Another term for promissory estoppel is a. Forbearance b. Restitution c. Good faith d. Detrimental reliance

d. Detrimental reliance

Which of the following statements is true about an accord and satisfaction? a. It is only used in construction contracts. b. It is only used in labor contracts c. It can only be used in liquidated debt contracts. d. It can be used for unliquidated debts based on contract or tort claims.

d. It can be used for unliquidated debts based on contract or tort claims.

Brenda was the lead detective assigned to investigate the murder of a prominent local businessman. A local civic group offered a $10,000 reward to anyone who provided information leading to the arrest and conviction of the murderer. The murderer was found, tried, and convicted largely due to Brenda's efforts. Can Brenda collect the reward? a. Yes, this is a unilateral contract and Brenda performed the requested action. b. Yes, the reward was a bargained-for benefit. c. Yes, the civic group had both a legal detriment and a legal benefit under the contract. d. No, Brenda had a preexisting contractual duty to find and try to convict the murderer.

d. No, Brenda had a preexisting contractual duty to find and try to convict the murderer.

An illusory promise is created when a. The promise is conditional on any other event happening first. b. The promise is conditional on an event happening first that is outside the promissor's control. c. The promise is conditional on an event happening first that is totally within the promissor's control. d. The promise cannot be performed within 1 year of the contract date.

c. The promise is conditional on an event happening first that is totally within the promissor's control.

Benny bought shares in Big Chip Maker (BCM) when the shares were trading for $37 a share. For the past 9 years BCM shares have not traded above $21. Can Benny rescind his purchase based on failure of consideration? a. Yes, he clearly gave more value than he received. b. Yes, he suffered an economic detriment c. Yes, there is a difference in value sufficient to trigger the adequacy of consideration rule. d. No, unless he was induced into buying the shares through fraud or other wrongdoing.

d. No, unless he was induced into buying the shares through fraud or other wrongdoing.

Local Delivery Service had a one year contract with Supply Co. to make four deliveries a month to Supply's customers who live across the Bay. There is only one bridge spanning the Bay for 200 miles in each direction. Without warning, the state closed the bridge to all traffic for 10 months after an inspection revealed dangerous structural problems. Local now has to travel an extra 400 miles for each of the scheduled deliveries. Local asked Supply Co. for an additional $60 per trip above the contract price and Supply Co. agreed. Under common law, is this an enforceable contract? a. No, Supply Co. will receive no new benefit. b. No, Local will incur no new duty c. No, Local has a pre-existing duty under the contract to make the deliveries d. Yes, the request is made in good faith for an unforeseen difficulty

d. Yes, the request is made in good faith for an unforeseen difficulty

Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim catches during the season for $35 per bushel. Which of the following actions would constitute a breach of the contract between Bay Crab and Jim? a. Jim sells crabs to another buyer. b. Jim buys crabs from other crabbers at $25 per bushel so that he can sell them to Bay Crab at the contract price of $35 per bushel. c. Bay Crab buys crabs from another crabber. d. a and b are both breaches e. a and c are both breaches

d. a and b are both breaches

Which of the following statements about nominal consideration is correct? a. Giving your siblings a quitclaim deed for your 1/8 share in your family home for $1 is an example of nominal consideration. b. Nominal consideration will support an enforceable contract. c. Nominal consideration is another term for sham consideration. d. a and b are true e. b and c are true

d. a and b are true

Which of the following is not an element of promissory estoppel? a. There must be an underlying enforceable bilateral contract. b. The promissor must foresee that the promissee would rely on the promise. c. The promissee did in fact reasonably rely on the promise. d. The promissee suffered a loss because of the reliance. e. All of the above are elements of promissory estoppel.

e. All of the above are elements of promissory estoppel.