Question 1

Which of the following statements best describes charitable subscription promises?

Accepted Answer

A)  They are generally not enforceable. 
B)  They are equated by the law with gifts. 
C)  They are generally enforceable if there is reliance or a probability of reliance by the charity. 
D)  Courts generally find that it would be unjust to enforce them because persons who promise charitable subscriptions do not expect to be held accountable for them. 
A)  They are generally not enforceable. 
B)  They are equated by the law with gifts. 
C)  They are generally enforceable if there is reliance or a probability of reliance by the charity. 
D)  Courts generally find that it would be unjust to enforce them because persons who promise charitable subscriptions do not expect to be held accountable for them.

Question 2

Harold 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. Harold refuses to pay the $800, and Isaac is threatening to sue. Which of the following is correct with regard to this transaction?

Accepted Answer

A)  If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable. 
B)  If Isaac agrees to accept $600 to settle the dispute and Harold pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. 
C)  Harold is under a pre-existing legal obligation to pay the $800. 
D)  Two of these but not all three 
A)  If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable. 
B)  If Isaac agrees to accept $600 to settle the dispute and Harold pays that amount, Isaac can still sue for the balance of $200 and will win the lawsuit. 
C)  Harold is under a pre-existing legal obligation to pay the $800. 
D)  Two of these but not all three

Question 3

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?

Accepted Answer

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. 
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.

Question 4

Clint contests the amount of a bill he received from Car Care Specialists. Under the Restatement, settlement of the claim:

Accepted Answer

A)  is not valid consideration. 
B)  is not a legal detriment to Clint if his contentions were not made in good faith. 
C)  is valid consideration if at the time of the settlement the claim was doubtful because of uncertainty as to the facts. 
D)  does not involve a disputed debt unless Clint contests both the existence of the obligation and the amount of the bill. 
A)  is not valid consideration. 
B)  is not a legal detriment to Clint if his contentions were not made in good faith. 
C)  is valid consideration if at the time of the settlement the claim was doubtful because of uncertainty as to the facts. 
D)  does not involve a disputed debt unless Clint contests both the existence of the obligation and the amount of the bill.

Question 5

An exclusive dealing contract is one type of contract which is illusory, because it lacks consideration.

Accepted Answer

A) True 
 B)False

Question 6

An illusory promise has the form of a promise but imposes no real obligation.

Accepted Answer

A) True 
 B)False

Question 7

Orwin, owner of a used furniture store, gives Maggie a signed offer to buy her living room furniture for $800. This offer:

Accepted Answer

A)  is revocable at any time because no consideration was given. 
B)  would have been irrevocable if Orwin were a merchant, but he would not be considered a merchant under the UCC. 
C)  is irrevocable for a reasonable time, not to exceed three months, even if there was no consideration. 
D)  is revocable without consideration because it is an offer to buy rather than to sell. 
A)  is revocable at any time because no consideration was given. 
B)  would have been irrevocable if Orwin were a merchant, but he would not be considered a merchant under the UCC. 
C)  is irrevocable for a reasonable time, not to exceed three months, even if there was no consideration. 
D)  is revocable without consideration because it is an offer to buy rather than to sell.

Question 8

Which of the following would not be a promise statutorily made enforceable without consideration?

Accepted Answer

A)  Hawkins, in good faith, changes the quantity of square yards of carpet ordered from Grant Mills. 
B)  Jones promises to pay his cousin's past-due cell phone bill. 
C)  Dodds signs and delivers a waiver of a claim arising out of a breach of contract by Keys. 
D)  A signed, written offer by Marcum Jewelers to sell four dozen 18" gold chains to the Alpha Sorority for $480 within the next 30 days. 
A)  Hawkins, in good faith, changes the quantity of square yards of carpet ordered from Grant Mills. 
B)  Jones promises to pay his cousin's past-due cell phone bill. 
C)  Dodds signs and delivers a waiver of a claim arising out of a breach of contract by Keys. 
D)  A signed, written offer by Marcum Jewelers to sell four dozen 18" gold chains to the Alpha Sorority for $480 within the next 30 days.

Question 9

Is a promise to pay a pre-existing moral obligation enforceable? Explain.

Accepted Answer

Under the common law and in most states,

Question 10

Breton owes Parkerson $750, which is due on June 1. Discuss the sufficiency of consideration if Breton offers Parkerson: (a) $600 in full settlement on June 1 if the debt is undisputed; (b) $600 in full settlement on April 10 if the debt is undisputed; and (c) $500 on June 1 to settle the debt if the amount of the debt is validly disputed.

Accepted Answer

The sufficiency of consideration is affe

Question 11

Under the common law, payment of a lesser sum of money than is owed in consideration of a promise to discharge a fully matured, undisputed debt is legally sufficient to support the promise of discharge.

Accepted Answer

A) True 
 B)False

Question 12

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 best describes the situation?

Accepted Answer

A)  McHenry is not liable to Nancy since there was no consideration. 
B)  McHenry is not liable to Nancy since there was past consideration. 
C)  McHenry is liable to Nancy since adequate consideration was given by both parties. 
D)  McHenry is liable to Nancy based on the concept of promissory estoppel. 
A)  McHenry is not liable to Nancy since there was no consideration. 
B)  McHenry is not liable to Nancy since there was past consideration. 
C)  McHenry is liable to Nancy since adequate consideration was given by both parties. 
D)  McHenry is liable to Nancy based on the concept of promissory estoppel.

Question 13

In a unilateral contract, a promise is exchanged for an act or forbearance to act.

Accepted Answer

A) True 
 B)False

Question 14

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:

Accepted Answer

A)  an illusory promise. 
B)  past consideration. 
C)  the pre-existing duty rule. 
D)  good consideration. 
A)  an illusory promise. 
B)  past consideration. 
C)  the pre-existing duty rule. 
D)  good consideration.

Question 15

There are certain transactions that are enforceable without consideration. These include:

Accepted Answer

A)  promises to pay a debt barred by the statute of limitations. 
B)  a promise to pay a debt that has been discharged in bankruptcy if certain requirements are met. 
C)  a new promise to perform a voidable obligation that has not previously been avoided. 
D)  All of these. 
A)  promises to pay a debt barred by the statute of limitations. 
B)  a promise to pay a debt that has been discharged in bankruptcy if certain requirements are met. 
C)  a new promise to perform a voidable obligation that has not previously been avoided. 
D)  All of these.

Question 16

Which of the following would not be enforceable without additional consideration?

Accepted Answer

A)  A promise to pay a debt barred by the statute of limitations. 
B)  A promise to pay a debt discharged in bankruptcy where the promise meets the requirements of the Bankruptcy Code. 
C)  A promise which falls within the doctrine of promissory estoppel. 
D)  The settlement of an undisputed debt. 
A)  A promise to pay a debt barred by the statute of limitations. 
B)  A promise to pay a debt discharged in bankruptcy where the promise meets the requirements of the Bankruptcy Code. 
C)  A promise which falls within the doctrine of promissory estoppel. 
D)  The settlement of an undisputed debt.

Question 17

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.

Accepted Answer

A) True 
 B)False

Question 18

In some states, a contract under seal is binding without consideration.

Accepted Answer

A) True 
 B)False

Question 19

A debt is disputed only if both the existence and amount are contested.

Accepted Answer

A) True 
 B)False

Question 20

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?

Accepted Answer

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. 
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.

Exam 12: Consideration

Which of the following statements best describes charitable subscription promises?

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?

Clint contests the amount of a bill he received from Car Care Specialists. Under the Restatement, settlement of the claim:

An exclusive dealing contract is one type of contract which is illusory, because it lacks consideration.

An illusory promise has the form of a promise but imposes no real obligation.

Orwin, owner of a used furniture store, gives Maggie a signed offer to buy her living room furniture for $800. This offer:

Which of the following would not be a promise statutorily made enforceable without consideration?

Is a promise to pay a pre-existing moral obligation enforceable? Explain.

Under the common law, payment of a lesser sum of money than is owed in consideration of a promise to discharge a fully matured, undisputed debt is legally sufficient to support the promise of discharge.

In a unilateral contract, a promise is exchanged for an act or forbearance to act.

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:

There are certain transactions that are enforceable without consideration. These include:

Which of the following would not be enforceable without additional consideration?

In some states, a contract under seal is binding without consideration.

A debt is disputed only if both the existence and amount are contested.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

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