Business Law Chapter 12 T/F
1. The fact that the word consideration is used in an agreement means, by itself, that consideration has been given. a. True b. False
b. False
10. To be legally sufficient, consideration must be evidenced by something tangible. a. True b. False
b. False
12. Legal sufficiency of consideration is the same as adequacy of consideration. a. True b. False
b. False
15. A determination of whether consideration exists depends on a comparison of the values of the things exchanged. a. True b. False
b. False
17. RESCISSION is the remaking of a contract so as to enrich one party at the expense of the other. a. True b. False
b. False
18. A promise made in return for an act or event that has not yet taken place is unenforceable. a. True b. False
b. False
19 A promise to do what one already has a legal duty to do constitutes legally sufficient consideration. a. True b. False
b. False
2. In contract law, the term consideration refers to the serious thought that underlies a party's intent to enter into a contract. a. True b. False
b. False
20 Two parties can mutually agree to rescind a contract unless it is executory. a. True b. False
b. False
23 An obligation is enforceable only if it is made in return for actions or events that have already taken place. a. True b. False
b. False
25 An ILLUSORY PROMISE is a promise that is enforceable without consideration. a. True b. False
b. False
26 Even if the terms of a contract express such certainty of performance that the promisor has not definitely promised to do anything, the promise binds the promisor. a. True b. False
b. False
27 Risks ordinarily assumed in business constitute consideration for the modification of a contract. a. True b. False
b. False
3. In contract law, "consideration" refers to the time that a party takes to evaluate a deal. a. True b. False
b. False
30 For an accord and satisfaction to occur, the amount of a debt must not be in dispute. a. True b. False
b. False
31 A covenant not to sue always bars further recovery. a. True b. False
b. False
32 If a debt is unliquidated, an accord and satisfaction cannot take place. a. True b. False
b. False
35 Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration. a. True b. False
b. False
4. A court will always enforce a promise, despite a lack of consideration. a. True b. False
b. False
6. For consideration to have "legally sufficient value," it must con-sist of goods or money. a. True b. False
b. False
11. Legally sufficient consideration is something of value in the eyes of the law. a. True b. False
a. True
13. Essentially, adequacy of consideration concerns the fairness of a bargain. a. True b. False
a. True
14. Parties are usually free to bargain as they wish. a. True b. False
a. True
16. The element of bargained-for exchange distinguishes contracts from gifts. a. True b. False
a. True
21 If, during the performance of a contract, extraordinary difficulties arise that were totally unforeseen at the time the contract was formed, a court may allow an exception to the preexisting duty rule. a. True b. False
a. True
22 RESCISSION is the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made. a. True b. False
a. True
24 A contract that one party retains the exclusive right to cancel at any time is unenforceable. a. True b. False
a. True
28 A RELEASE is an agreement in which one party gives up the right to pursue a legal claim against another party. a. True b. False
a. True
29 A release bars any further recovery beyond the terms stated in the release. a. True b. False
a. True
33 In a covenant not to sue, the parties substitute a contractual obligation for some other type of action. a. True b. False
a. True
34 Promissory estoppel requires that justice will be better served by the enforcement of the promise. a. True b. False
a. True
5. A promise by one party to pay another for refraining from an action that one has a legal right to undertake is enforceable. a. True b. False
a. True
7. Performance that creates a legally binding contract may consist of an act. a. True b. False
a. True
8. A transaction that lacks a bargained-for exchange lacks an element of consideration. a. True b. False
a. True
9. FORBEARANCE is the act of refraining from doing something that one has a legal right to do. a. True b. False
a. True
