BLAW Exam 2 Part 2 (chapter 12,13)
"Consideration" does not require an actual benefit to both sides of an agreement.
T
A conditional promise is a promise the performance of which depends upon the happening or nonhappening of an event not certain to occur.
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A covenant not to compete is a type of restraint of trade that courts today will enforce under certain circumstances.
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Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.
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Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.
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Courts require that for a contract to unenforceable based on unconscionability, both substantive and procedural unconscionability must be equally present.
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Deanna, an attorney, has a personal injury case which is set for trial next week. She needs a good doctor to testify on behalf of her client, so she contacts Dr. Dogood who agrees to testify on behalf of Deanna's client at the trial. In return for Dr. Dogood's testimony, Deanna agrees to pay Dr. Dogood $10,000 if they win the case, and $5,000 if they lose. Dr. Dogood agrees. The agreement between Deanna and Dr. Dogood is unenforceable.
T
If Sam agrees to sell to Thomas all of the tomatoes he wants at $25 a bushel, there is no contract for lack of consideration.
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If a promise is illusory, mutuality of obligation is lacking.
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In a bilateral contract, if one party is not bound, neither party is bound.
T
Which of the following are the two basic elements to consideration? a.Bargained-for exchange and legal sufficiency b.Legal detriment and legal benefit c.Legal sufficiency and legal adequacy d.Promise and forbearance
a.Bargained-for exchange and legal sufficiency
Custom Sales and Rentals uses a four-page contract with important contract terms buried in the fine print. This is an example of: a.procedural unconscionability. b.a reasonable, legal business practice. c.a "Blue law." d.substantive unconscionability.
a.procedural unconscionability.
Which of the following would generally be considered to be a revenue-raising licensing law? a.A statute requiring that doctors be licensed b.A statute requiring that salespeople be licensed, but not establishing any educational or training requirements c.A statute requiring public school teachers to be licensed d.A statute that requires insurance agents to pass a test before selling insurance in a state
b.A statute requiring that salespeople be licensed, but not establishing any educational or training requirements
Which of the following would most likely be enforceable? a.An agreement supported by past consideration b.A substitute agreement to settle an undisputed debt c.A debt agreed to seven years ago in a state where the statute of limitations is six years d.A promise following the rendering of emergency services that is not supported by new consideration
b.A substitute agreement to settle an undisputed debt
Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will. a.Janet has made an illusory promise. b.Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million. c.Janet has made a conditional promise which is not sufficient to form consideration. d.Janet's promise is legally inadequate and the courts will therefore not enforce it.
b.Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million.
Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it." a.There is no contract because there is no mutual assent. b.There is no contract because there is no valid consideration. c.There is no contract because $10 is reasonably inadequate consideration. d.There is a contract with sufficient consideration.
b.There is no contract because there is no valid consideration.
Bill bets his friend $100 that the Patriots will win the next Super Bowl. a.This is an unconscionable contract and therefore illegal. b.This is an illegal wagering agreement. c.This is an agreement to obstruct justice and therefore illegal. d.This is an illegal restraint of trade.
b.This is an illegal wagering agreement.
Non-compete agreements drafted for employees of Internet companies: a.are interpreted no differently in terms of standards of reasonableness than are agreements for other types of companies. b.are subject to larger geographic restrictions than for other types of companies. c.are subject to longer periods of reasonable duration. d.are irrelevant.
b.are subject to larger geographic restrictions than for other types of companies.
Theresa is a travel agent at the Fly Away Travel Agency. She has signed an agreement with her employer which prohibits her from working in any similar business in any town within a 100-mile radius of where she works. If she wants to quit her job and go to work for another travel agency, it is likely that: a.a court would uphold these restrictions. b.if no trade secrets are involved, and she has no dominion over customers, a court would rule the restrictions to be invalid. c.if the period of time of the agreement is under five years, it will be upheld by the court. d.Both (a) and (c).
b.if no trade secrets are involved, and she has no dominion over customers, a court would rule the restrictions to be invalid.
A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract. a.illusory b.requirements c.output d.exclusive dealing
b.requirements
Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay: a.$50, since that is the original agreement. b.$50, since a modification must be in writing. c.$60, since the modified agreement is supported by additional consideration. d.$60, since any subsequent agreement is enforceable.
c.$60, since the modified agreement is supported by additional consideration.
Which of the following would always be considered to be contrary to public policy? a.A contract which contains a covenant not to compete b.A contract offered on a take-it-or-leave-it basis c.An agreement to pay someone to make false, negative statements about a competitor's product d.An agreement which contains an exculpatory clause
c.An agreement to pay someone to make false, negative statements about a competitor's product
A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible? a.The employees of the bank b.An on-duty sheriff's deputy in the county where the arrest occurred c.An off-duty deputy sheriff from a county other than the one where the arrest occurred d.None of the above are eligible.
c.An off-duty deputy sheriff from a county other than the one where the arrest occurred
Which of the following statements is most accurate concerning charitable subscription promises? a.They are generally not enforceable. b.The courts equate them with gifts. c.They are generally enforceable if there is reliance by the charity. d.The Restatement uses a strict reliance requirement in relation to charitable subscriptions.
c.They are generally enforceable if there is reliance by the charity.
Which of the following gratuitous promises are enforceable by statute? a.A good-faith contract modification in a contract for the sale of goods b.A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month c.A renunciation of a claim in a written waiver that is signed and delivered by the aggrieved party when the contract involves a sale of goods d.All of the above are enforceable by statute.
d.All of the above are enforceable by statute.
Which of the following is true with regard to an exculpatory clause? a.An exculpatory clause excuses one party from liability for her own tortious conduct. b.Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. c.An exculpatory clause may be unenforceable for unconscionability. d.All of the above are true.
d.All of the above are true.
Numerous states impose no limit on the rate of interest that may be charged on: a.loans to corporations. b.credit card transactions. c.loans made by certain designated types of lenders. d.All of the above.
d.All of the above.
The UCC provides that if a court as a matter of law finds a contract for the sale of goods or a clause of such a contract to have been unconscionable at the time it was made, the court may: a.refuse to enforce the contract. b.enforce the part of the contract that is not unconscionable. c.limit the application of any unconscionable clause in order to avoid an unconscionable result. d.All of the above.
d.All of the above.
Which of the following is correct with regard to an enforceable restraint of trade? a.The restraint should be no more extensive than is required to protect a specified property interest. b.Restraints typically arise in connection with the sale of a business. c.A typical restraint is a covenant not to compete. d.All of the above.
d.All of the above.
Which of the following would be considered a valid and legally enforceable agreement? a.An agreement to pay a legislator to vote for a particular bill b.An agreement under which Arthur agrees to pay Barbara $3,000 to disparage the product of Arthur's competitor c.An agreement by the seller of a service station not to enter the service station business in Ohio for a period of 30 years after the sale of his business d.An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment
d.An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment
Doug obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. a.Acme is obligated to use its best efforts to supply the goods even if no such clause appears in the written franchise agreement. b.According to the UCC, unless otherwise agreed, Doug must use his best efforts to promote the sale of the widgets in his territory. c.Under the UCC, such an agreement lacks consideration. d.Both (a) and (b).
d.Both (a) and (b).
William recently sold his successful business to Janice. The contract for the sale contained an unreasonable restriction that did not allow William to open a similar business for fifteen years. The courts would, in this instance, a.reform the contract to make it reasonable and enforceable. b.require the parties to draft a new contract. c.enforce the contract as it is written. d.refuse to enforce the unreasonable restriction. e.Either (a) or (d).
e.Either (a) or (d).
"Blue laws" usually apply to activities of necessity and charity.
F
A contract to commit a tort will be enforced by the courts.
F
A liquidated debt is an obligation the existence or amount of which is in dispute.
F
A modification of a contract for the sale of goods must always be supported by additional consideration.
F
An agreement for sale of an illegal substance will be enforced by the courts if all other elements of the contract are present.
F
An agreement to sell the entire production of a particular plant to a particular purchaser is a requirements contract.
F
An exclusive dealing contract is one type of contract which is illusory because it lacks consideration.
F
Bargains are illegal if they involve a crime or tort but not if they are merely against public policy.
F
Bill is currently enrolled in law school. He expects to graduate and take the bar exam in order to be able to practice law. Before Bill becomes a lawyer, he promises to represent his friend, Tom, in a breach of contract action if Tom will pay him 25% of the settlement. Bill negotiates and the case settles for $50,000. Tom refuses to pay Bill. Bill then graduates and attempts to sue Tom. Bill has a legal right to enforce the agreement.
F
Consideration has only one basic element, which is a bargained-for exchange.
F
Contracts generally require adequacy of consideration where the consideration given by both parties is of fair value and equitable.
F
D owes C a past-due undisputed debt of $500. D sees C in a bar and pays him $400. C then says to D, "Forget about the other $100 you owe me. I'm glad to get the $400." C's promise to discharge the remainder of the debt is binding.
F
Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road. After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog. Marnie's promise is binding, because there is a bargained-for-exchange.
F
Edward, an engineer, is working on a new design for some highly technical equipment which XYZ, Inc. hopes to market within the next five years. The employment agreement between Edward and XYZ states that Edward will not go to work for another company in the same business for a period of two years after termination of his employment with XYZ, Inc. This agreement is void and unenforceable, because it would make it difficult for Edward to find other employment.
F
In most states, a contract under seal is binding without consideration.
F
In settling a liquidated debt, payment of a smaller amount before the due date would constitute consideration, but paying a lesser amount on the due date at an agreed-upon different place of payment would not be legally sufficient consideration.
F
Jerry received a bill for $300 from Johnson for a tune-up Johnson had performed on Jerry's car. Jerry called Johnson and told him, "The car runs no better now than before the tune-up. I am sending you $100 and no more." Johnson received the $100 check which was marked "paid in full" and cashed it. Jerry is still liable to Johnson for $200.
F
Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.
F
Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.
F
Maximum rates of interest that are permitted under usury statutes are uniform from state to state.
F
Noncompete agreements for Internet-related jobs have the same limitations in determining what is reasonable as to time and place restrictions as other types of jobs.
F
Past actions unbargained for by the parties in an agreement can become valid consideration for a contract.
F
Regulation of gambling is solely under federal jurisdiction, through Congressional legislation and U.S. court enforcement.
F
Sandy's private secretary promises to keep the contents of a letter she typed secret if Sandy will give her the next day off with pay. If the secretary takes the day off, Sandy has to pay her for the day.
F
Stuart promises to act as a guide on a fishing trip for a group of visiting dignitaries. The dignitaries agree to pay him $200 for his services. Stu guides them, but when they discover that Stu does not have a fishing license, they refuse to pay him. The agreement between Stu and the dignitaries is an illegal one, which is not enforceable.
F
The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire production. After signing the agreement, Abbot can increase its production from one shift to two shifts and Baker will have to buy all of the doubled production.
F
The Code and the Restatement both contain definitions of what constitutes "unconscionable" conduct.
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The courts will enforce an agreement declared illegal by statute.
F
The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.
F
The term "public policy" is precisely and narrowly defined in the Restatement and by state statutes.
F
A few states provide by statute that the parties need to provide no new consideration when modifying any contract.
T
A modification of a preexisting contract occurs when the parties agree to change one or more of its terms.
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A new promise to perform a voidable obligation that has not been avoided previously is enforceable without new consideration.
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A promise to pay $1,000 a year to a local police officer not to have your store vandalized is legally unenforceable under the rule that makes performance of a pre-existing legal obligation legally insufficient consideration.
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A unilateral contract may consist of a promise exchanged for an act or forbearance.
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According to the UCC, only a merchant can make a firm offer to a buyer.
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Although wagering is generally illegal, some states permit certain kinds of regulated gambling, especially wagering conducted by governmental agencies.
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An adhesion contract is offered on a "take-it-or-leave-it" basis.
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An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or similar business for a period of twenty-five years would be unreasonable.
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An agreement to refrain from a particular trade, profession, or business is enforceable if two requirements are met: that it protects a property interest of the promisee and that the restraint is no more extensive than is reasonably necessary to protect that interest.
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An exculpatory clause attempts to excuse one from liability for her own tortious conduct.
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An exculpatory clause excusing a party from liability for harm caused by reckless conduct will generally make a contract unenforceable as a violation of public policy.
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An illusory promise has the form of a promise but imposes no real obligation.
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At common law, a valid contract may be entered into on Sunday or on any other day.
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Charitable subscriptions are one of the most frequently occurring applications of the doctrine of promissory estoppel.
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In a unilateral contract, a promise is exchanged for an act or forbearance to act.
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In cases where one party to an illegal agreement is less at fault than the other, he will be allowed to recover payments made or property transferred.
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In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit to the promisor.
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In some states a promise under seal is binding without consideration.
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Many states impose no limit on the rate of interest which may be charged on loans to corporations.
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One type of restraint of trade is a covenant not to compete.
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Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.
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Pablo promises to sell to Candice an automobile for $20,000, for which Candice promises $20,000. A bilateral contract exists.
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Specific lender usury statutes rather than the general usury statute generally apply to real estate mortgages and small consumer loans.
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The Code has changed the common law rule regarding modification of a preexisting contract by providing that a contract for the sale of goods can be effectively modified by the parties without new consideration, provided they intend to do so and act in good faith.
T
The Restatement provides that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.
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The central idea behind consideration is that the parties have intentionally entered into a bargained exchange with one another and have given each other something in exchange for a promise or performance.
T
The courts readily enforce a covenant not to compete during the period of employment.
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The element of exchange is absent where a promise is given for an act that has already been done.
T
The parties to a contract may modify the agreement with no additional consideration by simply substituting a new contract.
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The term "past consideration" is not really consideration at all because the law will not find a contract where there is no bargained-for-exchange.
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The usual means of enforcing an agreement prohibiting an employee from competing in a described territory for a stated period of time is by injunction.
T
Under the UCC, exclusive dealing contracts are binding because sufficient consideration is deemed to be present.
T
Under the common law, in order to be enforceable, a modification of an existing contract must be supported by mutual consideration.
T
Where a stipulation in restraint of trade is a part of the contract for the sale of a business, it may be valid if the restraint is within reasonable limitations to protect the business's goodwill.
T
Which of the following is enforceable without consideration? a.A new promise to pay a debt barred by the statute of limitations. b.An illusory promise. c.Under the common law, a promise made to satisfy a preexisting moral obligation. d.A promise by a father to pay someone for rendering emergency services to his injured son before the father had arrived at the accident scene.
a.A new promise to pay a debt barred by the statute of limitations.
Al has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sales contract, he agrees that he will refrain from practicing accounting anywhere within a 20-mile radius of Redwood City for a period of two years. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home. a.Al is in violation of the sales agreement. b.The agreement is invalid, because it is an illegal restraint of trade. c.The agreement is illegal, because it is a violation of public policy. d.The two-year provision is likely to be held invalid, because it is too long a period of time.
a.Al is in violation of the sales agreement.
Carlos ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered the door ran an ad in the paper for the same storm door at $179.99. Carlos calls the store and demands the advertised price. They say okay. a.Carlos must pay $179.99. b.Carlos must pay $249.99. c.There is no contract. d.There is a contract for the reasonable value of the door.
a.Carlos must pay $179.99.
Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on November 1 at Howard's house. Which of the following would constitute legally sufficient consideration? a.Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house. b.Rob comes to Howard's house to collect the $75 on November 1, but Howard only has $50. Rob tells Howard to forget the other $25. c.Since this is an unliquidated debt, the only legally sufficient consideration is Howard's payment of $75 to Rob on November 1 at Howard's house. d.Since this is a liquidated debt, the only legally sufficient consideration is Howard's payment of $75 to Rob on November 1 at Howard's house.
a.Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob's house.
Stan purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective, and a dispute arose as to the amount due and owing under the contract. Stan refuses to pay the $800, and Isaac is threatening to sue. Which of the following is correct with regard to this transaction? a.If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable. b.If Isaac agrees to accept $600 to settle the dispute and Stan pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. c.Stan is under a pre-existing legal obligation to pay the $800. d.Both (b) and (c).
a.If Isaac agrees to accept $600 to settle the dispute and Stan agrees to pay that amount, the substitute agreement is enforceable.
Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere in River City for a period of five years. a.The geographic restraint is reasonable. b.This agreement is unreasonable. c.The agreement unduly interferes with the interest of the public. d.Both (b) and (c).
a.The geographic restraint is reasonable.
William agrees to drill a well up to 200 feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount. a.The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000. b.Under the UCC, the substitute contract is binding, because there is the payment of additional money. c.William is in breach of contract. John need not pay any additional money. d.William is under a pre-existing moral duty to perform at the originally agreed-upon price.
a.The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.
Under which of the following circumstances would a court be likely to enforce an illegal contract? a.Under certain circumstances in which the aggrieved party was unaware of the illegality b.Where, although the contract is unconscionable, there is only procedural unconscionability c.Where the agreement is with an unlicensed attorney d.A court will never enforce an illegal contract.
a.Under certain circumstances in which the aggrieved party was unaware of the illegality
Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of: a.an illusory promise. b.past consideration. c.the pre-existing duty rule. d.good consideration.
a.an illusory promise.
The requirement of legally sufficient consideration: a.is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor. b.has nothing to do with the value of what is exchanged. c.means the subject matter that the parties agree to exchange has to have the same value. d.is the same as the requirement of adequacy of consideration.
a.is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or conferred a legal benefit upon the promisor.
Tyler contracts to build a garage for Wilbur for a price of $6,000. Because of an increase in the cost of labor and materials, Tyler refuses to perform. Wilbur wants the garage, so he agrees to pay an additional $500. a.Wilbur must pay the additional $500. b.Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price. c.The substitute agreement is an illusory contract. d.The debt is a disputed one, and therefore Wilbur is obligated to pay the additional money.
b.Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price.
Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and novelty ice cream products. He has nine children and doesn't make enough money, so he decides to see if another dairy will hire him, too. "After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing. If Don sells for another dairy in addition to Dunkirk, will he be in trouble under his contract? a.No, it is unenforceable as against public policy. b.Yes, it is likely to be enforceable during employment. c.No, the prohibition against competing is enforceable only after he quits Dunkirk. d.A court would have to rule on the enforceability of the covenant not to compete since courts are reluctant to enforce such covenants during a period of employment.
b.Yes, it is likely to be enforceable during employment.
Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable? a.Yes, there is no way for the dealer to get the extra money anyway b.Yes, there is consideration for the modified amount c.No, there is no consideration and the dealer can sue for the extra $300 d.No, there is an implied contract to pay the dealer whatever he billed Jack
b.Yes, there is consideration for the modified amount
Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause? a.Void as an illegal primary restraint b.Valid as a reasonable restraint on trade c.An unenforceable restraint of trade contrary to public policy d.Binding as fair protection
c.An unenforceable restraint of trade contrary to public policy
Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job unless Betty agrees to pay him $100 more. What law applies to this fact situation? a.The acceptance of additional money to settle a disputed claim is supported by consideration. b.A past obligation is sufficient consideration for a new promise. c.Andrew gives no additional consideration in return for modification of a preexisting contract. d.Betty has made a promise in exchange for a forbearance.
c.Andrew gives no additional consideration in return for modification of a preexisting contract.
Which of the following will support a contract? a.An illusory promise b.Past consideration c.Forbearance to do an act d.A pre-existing public obligation
c.Forbearance to do an act
In which of the following situations will a smaller sum be unable to discharge a larger debt? a.If the smaller sum is paid before the due date of the larger debt. b.If an additional article or service is given together with the payment of the smaller sum. c.If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency. d.A smaller sum is never able to discharge a larger debt.
c.If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency.
Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true? a.Nell can get the money back from Al through litigation. b.Nell can get the money back and force Al to do as he promised. c.Legally, Nell can neither get the money back nor force Al to do as he promised. d.Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.
c.Legally, Nell can neither get the money back nor force Al to do as he promised.
Which of the following requires consideration in order to be binding upon the parties? a.A written promise by a merchant to keep an offer to buy goods open for 14 days b.Material modification of a sale of goods contract under Article 2 of the UCC c.Material alteration of a personal service contract d.Settlement of a disputed debt
c.Material alteration of a personal service contract
R&R, Inc. entered into a contract with Scott, an agent, under the terms of which Scott would receive $20,000 if he stole trade secrets from the leading competitor of R&R. Scott performed his end of the agreement by delivering the trade secrets. R&R now refuses to pay Scott for his services. a.Scott may recover based upon the express contract of the parties. b.Scott may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of R&R. c.Scott will be unable to recover, because this is an illegal contract. d.Scott will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by R&R.
c.Scott will be unable to recover, because this is an illegal contract.
Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct? a.Marilyn will have to pay $20,000. b.This is a contract under seal which is enforceable. c.This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders. d.This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.
c.This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders.
Carl and Rob are both engaged in road construction work. They know that several jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Rob will bid on the other, so that they both have work for the summer. When the bids are opened, Carl realizes that Rob has bid on both jobs. Rob is awarded both contracts. Carl now wants to sue Rob for breach of contract. a.Carl would probably win on the basis of promissory estoppel since he has detrimentally relied upon Rob's representation that he would not bid. b.Since Carl is less at fault than Rob, the court will likely award Carl damages. c.This is an agreement in violation of public policy that will not be enforced by the courts. d.This is an agreement obstructing the administration of justice that will not be enforced by the courts.
c.This is an agreement in violation of public policy that will not be enforced by the courts.
Sue owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. She has been offered a two-year graduate fellowship, but she will not be able to pay the loan back if she accepts the fellowship. The bank manager tells Sue that if she pays $3,000 now, they will forgive the loan. Should Sue accept the offer? a.No, because the bank can still sue for the remaining $2,000 b.No, because the manager's promise is not binding on the bank c.Yes, because the early payment of the loan is consideration that makes the bank's promise binding d.Yes, because the bank must do whatever the manager says
c.Yes, because the early payment of the loan is consideration that makes the bank's promise binding
Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is: a.exculpatory. b.conscionable. c.necessary to protect the employer's legitimate interest. d.in compliance with the state's Blue Law.
c.necessary to protect the employer's legitimate interest.
A(n) ____ is a measure designed to protect the public from unqualified practitioners. a.exculpatory clause b.revenue license c.regulatory license d.usury statute
c.regulatory license
John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of: a.in para delicto. b.partial illegality. c.substantive unconscionability. d.procedural unconscionability.
c.substantive unconscionability.
Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead. a.The doctrine of promissory estoppel can be applied to this case. b.The promise to pay $20,000 is a promise to give a gift and is therefore not enforceable. c.Under the Restatement, Barbara's promise is enforceable. d.Both (a) and (c).
d.Both (a) and (c).
Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere within the state for a period of three years. a.The agreement is reasonable. b.The agreement is unreasonable. c.The agreement unduly interferes with the interests of the public. d.Both (b) and (c).
d.Both (b) and (c).
Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. a.This is an illusory contract, because Darla doesn't know whether she will receive the money for sure. b.The consideration moving from Darla to Edward is the promise of $6,000 subject to a condition. c.Darla's conditional promise is sufficient consideration unless Darla knows she cannot receive at least $6,000 from her uncle's estate. d.Both (b) and (c).
d.Both (b) and (c).
Jason's mother would like him to go to college, so in June he enrolls at State University. He also quits his job and tells his mother his plans to continue taking classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise? a.It is enforceable, because Jason returned to college. b.It is enforceable, because Jason is giving up the right to do something else. c.It is unenforceable, because it is a unilateral contract. d.It is unenforceable, because Jason had already enrolled in school and there is no consideration.
d.It is unenforceable, because Jason had already enrolled in school and there is no consideration.
Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed, only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement is most accurate? a.McHenry is not liable to Nancy since there is no consideration. b.McHenry is not liable to Nancy since there is past consideration. c.McHenry is liable to Nancy since adequate consideration is given by both parties. d.McHenry is liable to Nancy based on the concept of promissory estoppel.
d.McHenry is liable to Nancy based on the concept of promissory estoppel.
Patrick agrees to sell two different goods to his friend Ron, a retailer. One item is legal, and one item is illegal. The contract price is $2,000. a.Patrick may not recover payment for either of the goods if delivered. b.Patrick may recover for the legal item, but he may not recover for the illegal item. c.This is an unconscionable contract under the UCC. d.The court may view the contract as in (a) or (b).
d.The court may view the contract as in (a) or (b).
Sarah is working hard on the mayoral campaign of Timothy. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 to register and vote. Violet does so, but Timothy loses the election, and Sarah now refuses to pay. a.This agreement is enforceable. b.This agreement is unenforceable and opposed to public policy. c.This is an agreement to obstruct the administration of justice. d.This is an unconscionable contract covered by the UCC.
d.This is an unconscionable contract covered by the UCC.
Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract? a.No, because Robbie gave no benefit to Aunt Ellie b.No, because Robbie did not suffer any detriment c.Yes, because stopping smoking will benefit Robbie's health d.Yes, because Robbie gave up a legal right
d.Yes, because Robbie gave up a legal right
A contract prepared on a standard form and offering terms on a take-it-or-leave-it basis is called: a.exculpatory. b.a usurious contract. c.an illegal restraint of trade. d.an adhesion contract.
d.an adhesion contract.
Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to its manufacturer to be repaired anyway. The watch is destroyed when the DP driver uses the package for a ball and tosses it to his buddy. Mary is: a.out of luck because the clause was communicated to her. b.out of luck because she should have insured the package. c.likely to collect from DP since exculpatory clauses always violate public policy. d.likely to collect from DP because it is a common carrier.
d.likely to collect from DP because it is a common carrier.
If a restriction in an employment contract is found to be too harsh, a court may do any of the following EXCEPT: a.change the terms of the contract. b.refuse to enforce the whole contract. c.refuse to enforce that part of the contract. d.refuse to void the restriction.
d.refuse to void the restriction.
