Question 1

A creditor's agreement to accept part payment as full settlement of a debt is enforceable

Accepted Answer

A)  at all times. 
B)  if the creditor receives additional consideration from the debtor. 
C)  when the due date is extended. 
D)  in all of these cases. 
A)  at all times. 
B)  if the creditor receives additional consideration from the debtor. 
C)  when the due date is extended. 
D)  in all of these cases. B

Question 2

The Wurzer Corporation entered into a written contract to hire Dixon in an executive position for six years for $200,000 a year. After three years, Dixon asked for a raise of $25,000 per year. Wurzer at first refused, but then agreed because of the pressure placed on him by Dixon. After the sixth year Dixon left his position with the Corporation and Wurzer sued for a return of the extra $25,000 per year for the three remaining years on Dixon's contract. Who should win the case?

Accepted Answer

A)  Dixon, because Wurzer agreed to the raise. 
B)  Dixon, if the raise was agreed to in writing 
C)  Wurzer, even though Wurzer agreed to the raise 
D)  Wurzer, because Dixon had applied pressure to get the raise. 
A)  Dixon, because Wurzer agreed to the raise. 
B)  Dixon, if the raise was agreed to in writing 
C)  Wurzer, even though Wurzer agreed to the raise 
D)  Wurzer, because Dixon had applied pressure to get the raise. C

Question 3

Agreements enforceable without consideration are generally based on principles of ____________________ rather than on principles of law.

Accepted Answer

equity

Question 4

Part payment of a liquidated claim

Accepted Answer

A)  discharges the remainder of the claim. 
B)  discharges the remainder of the claim if the creditor marks "paid in full" on any receipt given to the debtor. 
C)  discharges the remainder of the claim if, in addition to the part payment, the debtor gives additional consideration. 
D)  discharges the remainder of the claim if the debtor states that he or she has no more funds with which to pay the remainder of the debt. 
A)  discharges the remainder of the claim. 
B)  discharges the remainder of the claim if the creditor marks "paid in full" on any receipt given to the debtor. 
C)  discharges the remainder of the claim if, in addition to the part payment, the debtor gives additional consideration. 
D)  discharges the remainder of the claim if the debtor states that he or she has no more funds with which to pay the remainder of the debt.

Question 5

When a debtor and a creditor are in agreement about how much money is owed, the debt is said to be

Accepted Answer

A)  liquidated. 
B)  pre-existing. 
C)  unliquidated. 
D)  adequate. 
A)  liquidated. 
B)  pre-existing. 
C)  unliquidated. 
D)  adequate.

Question 6

Love and affection are generally considered to be valid consideration.

Accepted Answer

A) True 
 B)False

Question 7

Jennings found and returned Martin's lost wallet. Martin promised to give Jennings a reward the next day after he cashed a check. Martin is not legally bound to pay a reward as he promised, because the consideration for the promise was

Accepted Answer

A)  past. 
B)  present. 
C)  future. 
D)  not legal. 
A)  past. 
B)  present. 
C)  future. 
D)  not legal.

Question 8

Dial owed Lake $300. On the due date, Dial asked for an extension of two months and Lake agreed. One week later, Lake sued for the full $300. What are Dial's rights?

Accepted Answer

None. Lake did not receive any

Question 9

A promise to make a gift is enforceable in a court of law.

Accepted Answer

A) True 
 B)False

Question 10

A composition of creditors

Accepted Answer

A)  allows creditors to sue the debtor. 
B)  is binding on all creditors. 
C)  allows creditors to collect the full amount owed. 
D)  is illegal. 
A)  allows creditors to sue the debtor. 
B)  is binding on all creditors. 
C)  allows creditors to collect the full amount owed. 
D)  is illegal.

Question 11

If a person owes several people money, that person can give each of the creditors part of the total amount owed. If this arrangement is agreed to by all creditors, it is called

Accepted Answer

A)  a pledge. 
B)  promissory estoppel. 
C)  a composition of creditors. 
D)  past consideration. 
A)  a pledge. 
B)  promissory estoppel. 
C)  a composition of creditors. 
D)  past consideration.

Question 12

An agreement that lacks consideration is said to be

Accepted Answer

A)  illegal. 
B)  a benefit to the promisor. 
C)  a benefit to the promisee. 
D)  unenforceable. 
A)  illegal. 
B)  a benefit to the promisor. 
C)  a benefit to the promisee. 
D)  unenforceable.

Question 13

Holmes promised to donate $500 to the United Fund. Could Holmes be sued if he failed to make the donation? Why or why not?

Accepted Answer

Yes. Promises to mak

Question 14

Consideration may be something other than money.

Accepted Answer

A) True 
 B)False

Question 15

Past consideration

Accepted Answer

A)  is synonymous with moral consideration. 
B)  is a promise made for an act about to take place. 
C)  usually induces the offeree to act. 
D)  is a promise made for an act that has already taken place. 
A)  is synonymous with moral consideration. 
B)  is a promise made for an act about to take place. 
C)  usually induces the offeree to act. 
D)  is a promise made for an act that has already taken place.

Question 16

A beauty shop owner offered one of her employees a bonus of $100 over a six-month period if she would promise to give all customers excellent service. This promise by the beauty shop owner is

Accepted Answer

A)  based on forbearance. 
B)  sufficient to give the employee the right to sue if she does provide good service and the beauty shop owner fails to pay. 
C)  not valid because the employee is already legally bound to give excellent service. 
D)  based on past consideration. 
A)  based on forbearance. 
B)  sufficient to give the employee the right to sue if she does provide good service and the beauty shop owner fails to pay. 
C)  not valid because the employee is already legally bound to give excellent service. 
D)  based on past consideration.

Question 17

Courts will sometimes enforce contracts when a small amount of consideration, such as $1, is given for a promise. This small sum of money is called ____________________.

Accepted Answer

nominal co

Question 18

Refraining from doing something you have a legal right to do is called ____________________.

Accepted Answer

The answer of Refraining from doing something you have a...

Question 19

If, before maturity of a debt, the creditor accepts a lesser sum offered in full payment, the entire debt will be ____________________.

Accepted Answer

The answer of If, before maturity of a debt, the...

Question 20

Consideration may be

Accepted Answer

A)  money. 
B)  property. 
C)  a promise not to do something you have the legal right to do. 
D)  all of these. 
A)  money. 
B)  property. 
C)  a promise not to do something you have the legal right to do. 
D)  all of these.

Exam 8: Consideration

A creditor's agreement to accept part payment as full settlement of a debt is enforceable

Agreements enforceable without consideration are generally based on principles of ____________________ rather than on principles of law.

Part payment of a liquidated claim

When a debtor and a creditor are in agreement about how much money is owed, the debt is said to be

Love and affection are generally considered to be valid consideration.

Jennings found and returned Martin's lost wallet. Martin promised to give Jennings a reward the next day after he cashed a check. Martin is not legally bound to pay a reward as he promised, because the consideration for the promise was

Dial owed Lake $300. On the due date, Dial asked for an extension of two months and Lake agreed. One week later, Lake sued for the full $300. What are Dial's rights?

A promise to make a gift is enforceable in a court of law.

A composition of creditors

If a person owes several people money, that person can give each of the creditors part of the total amount owed. If this arrangement is agreed to by all creditors, it is called

An agreement that lacks consideration is said to be

Holmes promised to donate $500 to the United Fund. Could Holmes be sued if he failed to make the donation? Why or why not?

Consideration may be something other than money.

Past consideration

A beauty shop owner offered one of her employees a bonus of $100 over a six-month period if she would promise to give all customers excellent service. This promise by the beauty shop owner is

Courts will sometimes enforce contracts when a small amount of consideration, such as $1, is given for a promise. This small sum of money is called ____________________.

Refraining from doing something you have a legal right to do is called ____________________.

If, before maturity of a debt, the creditor accepts a lesser sum offered in full payment, the entire debt will be ____________________.

Consideration may be

Foundations of Law and the Role of Ethics in Business

The Legal System in the United States and Its Constitutional Foundation

Personal, Business, and Cyber Crimes and the American Criminal Justice System

Tort Law: Traditional Torts and Cyber Torts

Litigation and Alternatives for Settling Civil Disputes

Contract Law: a Beginning

Agreement: Offer and Acceptance

Capacity

Legality

Memorialize Contracts in Writingstatute of Frauds

Transfer of Contract Rights and Duties

The Termination of Contracts: Discharge

The Termination of Contracts: Breach of Contract

Formation of Sales and Lease Contracts

The Sales Contract: Transfer of Title and Risk of Loss

The Sales Contract: Performance, Breach, and Remedies for Breach

Product Liability Law

Nature and Types of Negotiable Instruments

Issue, Transfer, Indorsement, and Discharge of Negotiable Instruments

Rights and Duties of Parties

Checks and the Banking System in the Twenty-First Century

Employer-Employee Relationship

Principal-Agent Relationship

Principal-Agent, Employer-Employee, and Third-Party Relationships

Sole Proprietorships, Partnerships, and Limited Liability Organizations

Corporations and Franchising

Government Regulation of Business

Basic Legal Concepts of Property

Renting Real Property

Buying and Selling Real Property

Nature and Types of Bailments

Wills, Intestacy, and Estate Planning

Protecting the Consumer and the Taxpayer

Protecting the Borrower

Protecting the Creditor

Property, Casualty and Automobile Insurance

Personal Insurance

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