Question 1

Jack offers Selena his bicycle for $75. Which of the following is an example of an illusory promise on Selena's part?

Accepted Answer

A)  "I'll take it." 
B)  "I'll take it if I decide to do so." 
C)  "I won't pay $75, but I will pay $50." 
D)  "I'll take it if you will let me try it out first and the brakes work well." 
E)  "I'll take it if you will buy new tires." 
A)  "I'll take it." 
B)  "I'll take it if I decide to do so." 
C)  "I won't pay $75, but I will pay $50." 
D)  "I'll take it if you will let me try it out first and the brakes work well." 
E)  "I'll take it if you will buy new tires."

Question 2

Why is there no consideration when a party does what it is already legally obligated to do?

Accepted Answer

A)  Because there will not be adequate consideration. 
B)  Because promising to do something you are obligated to do is an illusory promise. 
C)  Because of the legal doctrine of promissory estoppel. 
D)  Because there is no detriment. 
A)  Because there will not be adequate consideration. 
B)  Because promising to do something you are obligated to do is an illusory promise. 
C)  Because of the legal doctrine of promissory estoppel. 
D)  Because there is no detriment.

Question 3

Define and discuss promissory estoppel, and give an example of when it would be applied.

Accepted Answer

Promissory estoppel occurs when one part

Question 4

Nina, an experienced pool contractor, and Charlie agree on a price for Nina to build a pool in Charlie's backyard. Nina discovers that she did not initially include a sufficient charge for labor in her original price. She informs Charlie that unless she receives an extra $5,000 with which to hire workers, she cannot complete the job. Charlie agrees, thinking to himself that he has a way out. When Nina finishes the pool, Charlie refuses to pay the additional $5,000. Which of the following is the most likely result of their dispute?

Accepted Answer

A)  Charlie will be required to pay because a typical, unilateral contract is involved, and he got the benefit of his bargain. 
B)  Charlie will be required to pay because a typical, bilateral contract is involved, and he got the benefit of his bargain. 
C)  Charlie will be required to pay because unforeseen circumstances are an exception to the preexisting duty rule. 
D)  Charlie will not be required to pay because Nina provided no additional consideration, and the preexisting duty rule applies. 
E)  Charlie will only be required to pay ½ of the agreed upon amounts because of the calculations involved under the preexisting duty rule. 
A)  Charlie will be required to pay because a typical, unilateral contract is involved, and he got the benefit of his bargain. 
B)  Charlie will be required to pay because a typical, bilateral contract is involved, and he got the benefit of his bargain. 
C)  Charlie will be required to pay because unforeseen circumstances are an exception to the preexisting duty rule. 
D)  Charlie will not be required to pay because Nina provided no additional consideration, and the preexisting duty rule applies. 
E)  Charlie will only be required to pay ½ of the agreed upon amounts because of the calculations involved under the preexisting duty rule.

Question 5

When determining whether consideration is sufficient to support a contract for the sale of goods under the UCC, one relevant factor is whether both parties received a good deal under UCC rules and principles.

Accepted Answer

A) True 
 B)False

Question 6

A store indicates to a produce seller, "If you ship me those oranges by Friday, I will consider making you my sole supplier." This agreement is:

Accepted Answer

A)  enforceable because of past consideration. 
B)  enforceable because it is a preexisting duty. 
C)  unenforceable because of past consideration. 
D)  unenforceable because of an illusory promise. 
E)  unenforceable under promissory estoppel. 
A)  enforceable because of past consideration. 
B)  enforceable because it is a preexisting duty. 
C)  unenforceable because of past consideration. 
D)  unenforceable because of an illusory promise. 
E)  unenforceable under promissory estoppel.

Question 7

[Garage Sale] While cleaning out his garage, Ezra offers to sell Mia a used computer for $200. Mia replies, "I'll think about it and buy it if I decide to do so." Ezra also calls Irina and offers to sell Irina a used business law book for $50. She asks if she can clean his apartment in exchange for the book, instead of paying cash, and he agrees. Ezra also agrees to sell a communications book for $5 to Tam, who promises to pick it up the next day. Meanwhile, Diego comes to visit and offers Ezra $45 for the business law book. Ezra sells it to him because he decides his apartment is clean enough. Diego also offers Ezra $50 for the used computer. Ezra sells it to Diego because he does not expect to hear from Mia. Diego sees the communications book and offers Ezra $45 for it. Ezra decides to forget about Tam and proceeds to sell the book to Diego for $45. The next day Irina shows up to clean Ezra's apartment and is very angry because Ezra did not save the book for her. Irina claims that Ezra breached their contract because they had a deal. Ezra says that they never had a deal because no consideration was present. He also says that even if cleaning house would be considered consideration, any housekeeping done would have been wholly inadequate to support receipt of the book because his house was already clean. Tam is also angry because Ezra sold the communications book, and informs him that he breached the contract he had with her. Ezra tells her that he had no obligation to hold the book for her because they had a unilateral contract. Two days after they first spoke, Mia tells Ezra that she would like the computer. She tells him that her response bound him and that he should have awaited her action. Ezra tells Diego that he needs to return everything for a full refund. Diego refuses.
-Which of the following is true regarding whether Ezra breached a contract with Mia?

Accepted Answer

A)  Mia's statement created an illusory promise, which cannot be enforced. 
B)  Ezra breached the contract because he had an obligation to wait a reasonable length of time for Mia's response, and waiting only two days was not reasonable. 
C)  Ezra did not breach the contract with Mia because he waited a reasonable amount of time before selling the computer. 
D)  Ezra did not breach the contract with Mia because it was for the sale of goods and, therefore, a typical contract. 
E)  Ezra did not breach the contract, but Mia can recover based on promissory estoppel. 
A)  Mia's statement created an illusory promise, which cannot be enforced. 
B)  Ezra breached the contract because he had an obligation to wait a reasonable length of time for Mia's response, and waiting only two days was not reasonable. 
C)  Ezra did not breach the contract with Mia because he waited a reasonable amount of time before selling the computer. 
D)  Ezra did not breach the contract with Mia because it was for the sale of goods and, therefore, a typical contract. 
E)  Ezra did not breach the contract, but Mia can recover based on promissory estoppel.

Question 8

[Bank Robbery] Safe Bank was robbed of a significant sum of cash by a robber later identified as Victor Victory. Safe Bank offered a reward of $10,000 to anyone who captured or provided information leading to the capture of Victor. Kareem, a police officer in town, promised Safe Bank officials that he would apprehend Victor. While on duty, Kareem arrested Victor at a restaurant in town. He found Victor after Ursula, Victor's girlfriend, told Kareem about various places Victor enjoyed eating. The bank refuses to pay either Ursula or Kareem any of the reward money.
-In a lawsuit between the bank and Ursula, regarding the reward funds, who is likely to prevail and why?

Accepted Answer

A)  The bank is likely to prevail because Ursula only provided past consideration. 
B)  The bank is likely to prevail because Ursula was tainted by being Victor's girlfriend. 
C)  The bank is likely to prevail because no valid bilateral contract existed. 
D)  Ursula is likely to prevail because a valid bilateral contract existed. 
E)  Ursula is likely to prevail because an enforceable unilateral contract exists based on her provision of information leading to the capture of Victor. 
A)  The bank is likely to prevail because Ursula only provided past consideration. 
B)  The bank is likely to prevail because Ursula was tainted by being Victor's girlfriend. 
C)  The bank is likely to prevail because no valid bilateral contract existed. 
D)  Ursula is likely to prevail because a valid bilateral contract existed. 
E)  Ursula is likely to prevail because an enforceable unilateral contract exists based on her provision of information leading to the capture of Victor.

Question 9

Which of the following is not a type of consideration?

Accepted Answer

A)  A benefit to the promisee. 
B)  A detriment to the promisor. 
C)  A promise to do something. 
D)  A promise to refrain from doing something. 
E)  A promise to think about refraining from doing something. 
A)  A benefit to the promisee. 
B)  A detriment to the promisor. 
C)  A promise to do something. 
D)  A promise to refrain from doing something. 
E)  A promise to think about refraining from doing something.

Question 10

If a check is marked "paid in full," which of the following is true under the UCC?

Accepted Answer

A)  If a business inadvertently cashes such a check, the business has 30 days from the date it cashed that check to offer repayment in the same amount to the debtor to avoid an accord and satisfaction. 
B)  If a business inadvertently cashes such a check, the business has 60 days from the date it cashed that check to offer repayment in the same amount to the debtor to avoid an accord and satisfaction. 
C)  If a business inadvertently cashes such a check, the business has 90 days from the date it cashed that check to offer repayment in the same amount to the debtor to avoid an accord and satisfaction. 
D)  If a business inadvertently cashes such a check, the business has 120 days from the date it cashed that check to offer repayment in the same amount to the debtor to avoid an accord and satisfaction. 
E)  The business has no recourse, and the debt is deemed discharged and satisfied. 
A)  If a business inadvertently cashes such a check, the business has 30 days from the date it cashed that check to offer repayment in the same amount to the debtor to avoid an accord and satisfaction. 
B)  If a business inadvertently cashes such a check, the business has 60 days from the date it cashed that check to offer repayment in the same amount to the debtor to avoid an accord and satisfaction. 
C)  If a business inadvertently cashes such a check, the business has 90 days from the date it cashed that check to offer repayment in the same amount to the debtor to avoid an accord and satisfaction. 
D)  If a business inadvertently cashes such a check, the business has 120 days from the date it cashed that check to offer repayment in the same amount to the debtor to avoid an accord and satisfaction. 
E)  The business has no recourse, and the debt is deemed discharged and satisfied.

Exam 15: Consideration

Jack offers Selena his bicycle for $75. Which of the following is an example of an illusory promise on Selena's part?

Why is there no consideration when a party does what it is already legally obligated to do?

Define and discuss promissory estoppel, and give an example of when it would be applied.

When determining whether consideration is sufficient to support a contract for the sale of goods under the UCC, one relevant factor is whether both parties received a good deal under UCC rules and principles.

A store indicates to a produce seller, "If you ship me those oranges by Friday, I will consider making you my sole supplier." This agreement is:

Which of the following is not a type of consideration?

If a check is marked "paid in full," which of the following is true under the UCC?

An Introduction to Dynamic Business Law

Business Ethics

The Us Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

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Consumer Law

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The Nature of Property, Personal Property, and Bailments

Real Property

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Insurance Law

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