Question 1

A promise to do something that you are already obligated to do is _____________.

Accepted Answer

A)  Valid consideration because it is illusory consideration. 
B)  Valid consideration only in the employment context. 
C)  Valid consideration because it is past consideration. 
D)  Valid consideration only if a sale of goods is involved. 
E)  Not valid consideration. 
A)  Valid consideration because it is illusory consideration. 
B)  Valid consideration only in the employment context. 
C)  Valid consideration because it is past consideration. 
D)  Valid consideration only if a sale of goods is involved. 
E)  Not valid consideration.

Question 2

Frank is building a home for Debby that under the original contract is to be completed by December 31st. Debby found the plans for the home in a publication focusing on unique houses and is excited because it will be the only home of its type in the area. Because he underestimated the time needed for special and unique framing required for Debby's house, Frank tells Debby that he needs to hire additional workers in order to have the home done by that time and that she needs to pay him an extra $10,000. Debby says that she will pay. Frank finishes the home and asks for his $10,000. Debby refuses to pay. What is the likely result if Frank sues? Discuss whether you believe the result is ethical and equitable.

Accepted Answer

Debby will likely win. Frank h

Question 3

Mary has a pet shop and verbally orders 50 packages of dog food for puppies from a supplier for a total cost of $1,000. Later she calls the supplier and changes the order to food for adult dogs. When 50 packages of puppy food arrive, Mary complains. The supplier tells her that the modification was not valid because nothing was put in writing. Which of the following is the correct resolution of the dispute?

Accepted Answer

A)  The supplier is correct because modification of orders of over $200 must be in writing. 
B)  The supplier is correct because modification of orders of over $500 must be in writing. 
C)  The supplier is correct because modification of orders of over $600 must be in writing. 
D)  The supplier is correct because modification of orders of over $800 must be in writing. 
E)  Mary is correct because under the circumstances, there was no requirement of a writing to modify the agreement. 
A)  The supplier is correct because modification of orders of over $200 must be in writing. 
B)  The supplier is correct because modification of orders of over $500 must be in writing. 
C)  The supplier is correct because modification of orders of over $600 must be in writing. 
D)  The supplier is correct because modification of orders of over $800 must be in writing. 
E)  Mary is correct because under the circumstances, there was no requirement of a writing to modify the agreement.

Question 4

Which of the following is true regarding past consideration?

Accepted Answer

A)  It is not consideration that will support a binding contract. 
B)  It is consideration that will support a binding contract. 
C)  It is consideration that will support a binding contract only in the employment context. 
D)  It is consideration that will support a binding contract only in the context of the provision of services. 
E)  It is consideration that will support a binding contract only in the restaurant industry. 
A)  It is not consideration that will support a binding contract. 
B)  It is consideration that will support a binding contract. 
C)  It is consideration that will support a binding contract only in the employment context. 
D)  It is consideration that will support a binding contract only in the context of the provision of services. 
E)  It is consideration that will support a binding contract only in the restaurant industry.

Question 5

Reference - Marcy's Mom. Marcy's mother, Sue, did not want her to date until she was older. She also wanted Marcy to attend law school. Just before Marcy started her freshman year in college, Sue told Marcy that if Marcy would refrain from dating until she received her law degree, then Sue would pay off all Marcy's school loans and throw in an extra $50,000. Marcy agrees and states, "Thanks, Mom, and by the way, when I graduate I'm throwing you a big party for all you've done for me!" Sue smiles and hugs Marcy. Marcy finished law school and asked for payment of her loans, the $50,000 in cash, and for a car. Sue said "No way - I know you went out on some dates during law school, and I never agreed on the car." Marcy said those were just study nights and that her mother had never objected to Marcy's frequent statements that she wanted a car upon graduation. Sue asks about the party. Marcy tells her that she is nuts because there is no way Marcy can afford a party since Sue has backed out of the deal. After some serious negotiation Marcy and Sue settled their dispute with Sue agreeing to pay for half of Marcy's school loans and for all the expenses of Marcy's upcoming wedding, and to forget about Marcy throwing a party for her. What type of alleged debt was involved in the dispute between Marcy and Sue involving the school loans, additional funds, car, and party?

Accepted Answer

A)  Liquidated 
B)  Unliquidated 
C)  Supported 
D)  Unsupported 
E)  Liquidated in relation to the school loans, additional funds, and car; and unsupported in relation to the party. 
A)  Liquidated 
B)  Unliquidated 
C)  Supported 
D)  Unsupported 
E)  Liquidated in relation to the school loans, additional funds, and car; and unsupported in relation to the party.

Question 6

In a bilateral contract, the consideration for each promise is _____________.

Accepted Answer

A)  A completed act. 
B)  The beginning of action in acceptance, even if it is not complete. 
C)  An acknowledgement. 
D)  A return promise. 
E)  An agreement. 
A)  A completed act. 
B)  The beginning of action in acceptance, even if it is not complete. 
C)  An acknowledgement. 
D)  A return promise. 
E)  An agreement.

Question 7

Reference - Bank Robbery. Safe Bank was robbed of a significant sum of cash by Victor. Safe Bank offered a reward of $10,000 for anyone who captured or provided information leading to the capture of Victor. Ted, a police officer in town, promised Safe Bank officials that he would apprehend Victor. While on duty, Ted arrested Victor at a hamburger joint in town. He found Victor based upon a hunch he had after Ursula, who dated Victor, told him about various places Victor enjoyed eating. The bank refuses to pay either Ursula or Ted 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 8

In a[n] _____________ debt, there is no dispute about the fact that money is owed and the amount of money owed.

Accepted Answer

A)  Actual 
B)  Acknowledged 
C)  Certain 
D)  Liquidated 
E)  Unliquidated 
A)  Actual 
B)  Acknowledged 
C)  Certain 
D)  Liquidated 
E)  Unliquidated

Question 9

An unliquidated debt may be the subject of an accord and satisfaction.

Accepted Answer

A) True 
 B)False

Question 10

Reference - Garage sale. Richard, who is cleaning out his garage, offers to sell Dawn a used computer for $200. Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book. She is excited to receive the book and tells him that she will pick it up the next day. Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day. Meanwhile, Sam comes to visit, offers Richard $20 for the business law book and Richard sells it to him. Sam also offers Richard $50 for the used computer. Richard sells it to Sam because he does not expect to hear from Dawn. Sam sees the communications book and offers Richard $60 for it. Richard decides to forget about Jill and proceeds to sell the book to Sam for $60. Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer. Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her. Exactly 31 days later, Dawn tells Richard that she would like the computer. She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision. Richard tells Sam that he needs to return everything for a full refund. Sam refuses. Which of the following best describes Dawn's statement that she would think about it and buy the computer if she decided to do so?

Accepted Answer

A)  It is an illusory promise. 
B)  It is a valid promise. 
C)  It is a promise sufficient to require Richard to consult with her prior to selling the computer to someone else. 
D)  It is a promise sufficient to require Richard to consult with her prior to selling the computer to someone else, but only for 30 days. 
E)  It is a real promise. 
A)  It is an illusory promise. 
B)  It is a valid promise. 
C)  It is a promise sufficient to require Richard to consult with her prior to selling the computer to someone else. 
D)  It is a promise sufficient to require Richard to consult with her prior to selling the computer to someone else, but only for 30 days. 
E)  It is a real promise.

Question 11

Reference - Garage sale. Richard, who is cleaning out his garage, offers to sell Dawn a used computer for $200. Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book. She is excited to receive the book and tells him that she will pick it up the next day. Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day. Meanwhile, Sam comes to visit, offers Richard $20 for the business law book and Richard sells it to him. Sam also offers Richard $50 for the used computer. Richard sells it to Sam because he does not expect to hear from Dawn. Sam sees the communications book and offers Richard $60 for it. Richard decides to forget about Jill and proceeds to sell the book to Sam for $60. Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer. Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her. Exactly 31 days later, Dawn tells Richard that she would like the computer. She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her response. Richard tells Sam that he needs to return everything for a full refund. Sam refuses. Which of the following is true regarding Dawn's statement that her response was sufficient consideration to bind Richard to an option contract and that he should have awaited her final decision?

Accepted Answer

A)  She is correct. Her statement bound him to an option contract, and he should have awaited her final decision. 
B)  She is incorrect in that her response bound Richard to an option contract, but she is correct that he should have awaited her final decision. 
C)  She is correct that her response bound Richard to an option correct, but she is incorrect that he should have awaited her final decision 
D)  She is correct that her statement bound him to an option contract, but he should have awaited her final decision only if she can prove that they have had significant business dealings in the past. 
E)  She is incorrect on both counts. Her statement did not create an option contract nor was Richard bound to await her final decision. 
A)  She is correct. Her statement bound him to an option contract, and he should have awaited her final decision. 
B)  She is incorrect in that her response bound Richard to an option contract, but she is correct that he should have awaited her final decision. 
C)  She is correct that her response bound Richard to an option correct, but she is incorrect that he should have awaited her final decision 
D)  She is correct that her statement bound him to an option contract, but he should have awaited her final decision only if she can prove that they have had significant business dealings in the past. 
E)  She is incorrect on both counts. Her statement did not create an option contract nor was Richard bound to await her final decision.

Question 12

Reference - Garage sale. Richard, who is cleaning out his garage, offers to sell Dawn a used computer for $200. Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to give Denise a used business law book. She is excited to receive the book and tells him that she will pick it up the next day. Richard also agrees to sell a communications book for $50 to Jill who promises to pick it up the next day. Meanwhile, Sam comes to visit, offers Richard $20 for the business law book and Richard sells it to him. Sam also offers Richard $50 for the used computer. Richard sells it to Sam because he does not expect to hear from Dawn. Sam sees the communications book and offers Richard $60 for it. Richard decides to forget about Jill and proceeds to sell the book to Sam for $60. Denise is very angry because Richard did not save the book for her and claims that he breached a contract because she had accepted his offer. Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her. Exactly 31 days later, Dawn tells Richard that she would like the computer. She tells him that her response constituted consideration in that it bound him to an option contract and that he should have awaited her final decision. Richard tells Sam that he needs to return everything for a full refund. Sam refuses. Which of the following is true regarding Denise's claim that Richard breached a contract with her because Richard did not save the book for her after she had accepted his offer?

Accepted Answer

A)  Denise is correct, and Richard breached a contract he had with her. 
B)  Denise is correct only if she can show that she had given past consideration in other dealings with Richard. 
C)  Denise is correct only if she can show that Richard did not really need the money. 
D)  Denise is incorrect because her acceptance was illusory. 
E)  Denise is incorrect because she did not provide any consideration. 
A)  Denise is correct, and Richard breached a contract he had with her. 
B)  Denise is correct only if she can show that she had given past consideration in other dealings with Richard. 
C)  Denise is correct only if she can show that Richard did not really need the money. 
D)  Denise is incorrect because her acceptance was illusory. 
E)  Denise is incorrect because she did not provide any consideration.

Question 13

Which of the following is true regarding a valid accord and satisfaction?

Accepted Answer

A)  When amounts agreed upon are paid, the debt is fully discharged. 
B)  When amounts agreed upon are paid, the debt is fully discharged except for any late charges due under the original agreement. 
C)  When amounts agreed upon are paid, the debt is fully discharged except for any interest due under the original agreement. 
D)  When amounts agreed upon are paid, the debt is fully discharged except for any late charges and any interest due under the original agreement. 
E)  When amounts agreed upon are paid, the debt is fully discharged except for any late charges or interest due under the original agreement, or for attorney fees of the creditor that are due. 
A)  When amounts agreed upon are paid, the debt is fully discharged. 
B)  When amounts agreed upon are paid, the debt is fully discharged except for any late charges due under the original agreement. 
C)  When amounts agreed upon are paid, the debt is fully discharged except for any interest due under the original agreement. 
D)  When amounts agreed upon are paid, the debt is fully discharged except for any late charges and any interest due under the original agreement. 
E)  When amounts agreed upon are paid, the debt is fully discharged except for any late charges or interest due under the original agreement, or for attorney fees of the creditor that are due.

Question 14

Reference - Alien babies. Toymaker Alice came out with a doll that looked like a baby alien. Alice initially had trouble selling the doll to retailers even after offering retailers a contract by which they could buy all the dolls they needed for $10. Slick Eddie, however, who had a retail toy store, signed the agreement whereby he could buy all the dolls he needed for $10. Slick Eddie had a toy store but did very little business because he was so sleazy. Parents wanted to keep kids out. After a few months, the baby alien doll was a surprise hit and every child wanted one. Slick Eddie, however, did not see much demand in his store because, regardless of whether he had alien baby dolls or not, parents disliked him. When demand grew, Alice raised to $40 per doll the price charged to retailers who had not signed a contract to purchase all the dolls they needed for $10. Slick Eddie decided to purchase alien dolls for $10 from Alice and then resell them for $35 to a retailer, Ben, who did not have a contract with Alice to purchase the dolls for $10. His contract with Ben required that he also gift wrap the dolls and that he would provide Ben with all the gift-wrapped dolls he could produce. Eddie then ordered 10,000 alien baby dolls from Alice. When Alice figured out what was happening, sales of alien baby dolls to Slick Eddie were stopped. What type of contract did Slick Eddie have with Alice?

Accepted Answer

A)  Requirement 
B)  Output 
C)  Executed 
D)  Both requirement and output 
E)  Requirement, output, and executed 
A)  Requirement 
B)  Output 
C)  Executed 
D)  Both requirement and output 
E)  Requirement, output, and executed

Question 15

When an accord and satisfaction is at issue, the _____________ is the payment, by the debtor, of the reduced amount.

Accepted Answer

A)  Satisfaction 
B)  Accord 
C)  Both satisfaction and accord 
D)  Fund transfer 
E)  Bond 
A)  Satisfaction 
B)  Accord 
C)  Both satisfaction and accord 
D)  Fund transfer 
E)  Bond

Question 16

Define the terms liquidated debt and unliquidated debt, and discuss when an accord and satisfaction is enforceable.

Accepted Answer

In a liquidated debt, there is no disput

Question 17

In Japan a promise to give property to one party gratuitously cannot be cancelled, regardless of whether or not it is in writing.

Accepted Answer

A) True 
 B)False

Question 18

Partial payment of a debt may or may not be valid consideration, depending on whether the debt is liquidated or unliquidated.

Accepted Answer

A) True 
 B)False

Question 19

Reference - Marcy's Mom. Marcy's mother, Sue, did not want her to date until she was older. She also wanted Marcy to attend law school. Just before Marcy started her freshman year in college, Sue told Marcy that if Marcy would refrain from dating until she received her law degree, then Sue would pay off all Marcy's school loans and throw in an extra $50,000. Marcy agrees and states, "Thanks, Mom, and by the way, when I graduate I'm throwing you a big party for all you've done for me!" Sue smiles and hugs Marcy. Marcy finished law school and asked for payment of her loans, the $50,000 in cash, and for a car. Sue said "No way - I know you went out on some dates during law school, and I never agreed on the car." Marcy said those were just study nights and that her mother had never objected to Marcy's frequent statements that she wanted a car upon graduation. Sue asks about the party. Marcy tells her that she is nuts because there is no way Marcy can afford a party since Sue has backed out of the deal. After some serious negotiation Marcy and Sue settled their dispute with Sue agreeing to pay for half of Marcy's school loans and for all the expenses of Marcy's upcoming wedding, and to forget about Marcy throwing a party for her. Was there sufficient consideration to support Marcy's agreement to throw a party for Sue?

Accepted Answer

A)  Yes, sufficient consideration was present. 
B)  No, there was insufficient consideration because Sue did not promise anything in exchange. 
C)  No, there was insufficient consideration because Marcy's agreement was illusory. 
D)  No, because throwing a party is not of a monetary value such as to constitute consideration. 
E)  No, because close relatives are involved. 
A)  Yes, sufficient consideration was present. 
B)  No, there was insufficient consideration because Sue did not promise anything in exchange. 
C)  No, there was insufficient consideration because Marcy's agreement was illusory. 
D)  No, because throwing a party is not of a monetary value such as to constitute consideration. 
E)  No, because close relatives are involved.

Question 20

An exception to the rule requiring consideration is promissory estoppel.

Accepted Answer

A) True 
 B)False

A promise to do something that you are already obligated to do is _____________.

Which of the following is true regarding past consideration?

In a bilateral contract, the consideration for each promise is _____________.

In a[n] _____________ debt, there is no dispute about the fact that money is owed and the amount of money owed.

An unliquidated debt may be the subject of an accord and satisfaction.

Which of the following is true regarding a valid accord and satisfaction?

When an accord and satisfaction is at issue, the _____________ is the payment, by the debtor, of the reduced amount.

Define the terms liquidated debt and unliquidated debt, and discuss when an accord and satisfaction is enforceable.

In Japan a promise to give property to one party gratuitously cannot be cancelled, regardless of whether or not it is in writing.

Partial payment of a debt may or may not be valid consideration, depending on whether the debt is liquidated or unliquidated.

An exception to the rule requiring consideration is promissory estoppel.

An Introduction to the Fundamentals of Dynamic Business Law

Business Ethics and Social Responsibility

The Us Legal System and Alternative Dispute Resolution

Administrative Law

Constitutional Law

Criminal Law and Business

Tort Law

Real, Personal, and Intellectual Property

Consideration

Capacity and Legality

Reality of Assent

Contracts in Writing and Third-Party Contracts

Discharge and Remedies

Formation and Performance of Sales and Lease Contracts

Sales and Lease Contracts: Performance, Warranties, and Remedies

Negotiable Instruments: Negotiability and Transferability

Holder in Due Course, Liability, and Defenses

Secured Transactions and Bankruptcy

Agency and Liability to Third Parties

Forms of Business Organization

Corporations: Formation and Organization

Securities Regulation

Employment and Discrimination Law

Consumer Law

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Exam 9: Introduction to Contracts and Agreement

A promise to do something that you are already obligated to do is _____________.

Which of the following is true regarding past consideration?

In a bilateral contract, the consideration for each promise is _____________.

In a[n] _____________ debt, there is no dispute about the fact that money is owed and the amount of money owed.

An unliquidated debt may be the subject of an accord and satisfaction.

Which of the following is true regarding a valid accord and satisfaction?

When an accord and satisfaction is at issue, the _____________ is the payment, by the debtor, of the reduced amount.

Define the terms liquidated debt and unliquidated debt, and discuss when an accord and satisfaction is enforceable.

In Japan a promise to give property to one party gratuitously cannot be cancelled, regardless of whether or not it is in writing.

Partial payment of a debt may or may not be valid consideration, depending on whether the debt is liquidated or unliquidated.

An exception to the rule requiring consideration is promissory estoppel.

An Introduction to the Fundamentals of Dynamic Business Law

Business Ethics and Social Responsibility

The Us Legal System and Alternative Dispute Resolution

Administrative Law

Constitutional Law

Criminal Law and Business

Tort Law

Real, Personal, and Intellectual Property

Consideration

Capacity and Legality

Reality of Assent

Contracts in Writing and Third-Party Contracts

Discharge and Remedies

Formation and Performance of Sales and Lease Contracts

Sales and Lease Contracts: Performance, Warranties, and Remedies

Negotiable Instruments: Negotiability and Transferability

Holder in Due Course, Liability, and Defenses

Secured Transactions and Bankruptcy

Agency and Liability to Third Parties

Forms of Business Organization

Corporations: Formation and Organization

Securities Regulation

Employment and Discrimination Law

Consumer Law

Filters