Question 1

Promises to pay debts barred by a statute of limitations are not enforce?able due to the absence of consideration.

Accepted Answer

A) True 
 B)False

Question 2

Todos Ltd. agrees to supply United Steel, Inc., with minerals from Venezuela. When the gov?ern?ment is unexpectedly overthrown in a revolution, Todos can obtain the goods only at a much higher price. United agrees to pay but later files a suit to recover the difference. The court will most likely rule that

Accepted Answer

A)  a change in government is a risk ordinarily assumed in business. 
B)  an unforeseen difficulty supported the contract modification here. 
C)  Todos engaged in extortion or the so-called holdup game. 
D)  Todos had a preexisting duty to supply the goods at the initial price. 
A)  a change in government is a risk ordinarily assumed in business. 
B)  an unforeseen difficulty supported the contract modification here. 
C)  Todos engaged in extortion or the so-called holdup game. 
D)  Todos had a preexisting duty to supply the goods at the initial price.

Question 3

Ida promises to pay Jon, her son, $15,000 if he obtains his degree at Kappa University, where he is currently in his second year. Jon graduates. Ida is

Accepted Answer

A)  not required to pay, because Jon was already at Kappa. 
B)  not required to pay, because obtaining a degree benefits Jon. 
C)  required to pay, because a job can be hard to find after college. 
D)  required to pay, because Jon obtained a degree at Kappa. 
A)  not required to pay, because Jon was already at Kappa. 
B)  not required to pay, because obtaining a degree benefits Jon. 
C)  required to pay, because a job can be hard to find after college. 
D)  required to pay, because Jon obtained a degree at Kappa.

Question 4

Mary promises to pay her assistant Ned $10,000 in consideration of the ser?vices he provided over the years. Mary never pays Ned. Mary is

Accepted Answer

A)  liable for payment of the $10,000. 
B)  liable only if Ned still works for Mary. 
C)  not liable, because the consideration is in the past. 
D)  not liable, because the consideration was unintentional. 
A)  liable for payment of the $10,000. 
B)  liable only if Ned still works for Mary. 
C)  not liable, because the consideration is in the past. 
D)  not liable, because the consideration was unintentional.

Question 5

Carl pledges $1,000 to the Disaster Relief Organization (DRO). On the ba?sis of the pledge, DRO orders additional rescue equipment. Carl fails to pay. In DRO's suit, a court may enforce the pledge

Accepted Answer

A)  according to the preexisting duty rule. 
B)  as an illusory promise supported by past consideration. 
C)  on a theory of accord and satisfaction. 
D)  under the doctrine of promissory estoppel. 
A)  according to the preexisting duty rule. 
B)  as an illusory promise supported by past consideration. 
C)  on a theory of accord and satisfaction. 
D)  under the doctrine of promissory estoppel.

Question 6

Speedy Assembly Company promises its employees a 10-percent raise at the end of the year if productivity has increased and management feels it is warranted. Speedy must

Accepted Answer

A)  do nothing. 
B)  give the employees a 10-percent raise only at the end of the year. 
C)  give the employees a 10-percent raise only if produc?tivity increases. 
D)  give the employees a 10-percent raise under any circumstances. 
A)  do nothing. 
B)  give the employees a 10-percent raise only at the end of the year. 
C)  give the employees a 10-percent raise only if produc?tivity increases. 
D)  give the employees a 10-percent raise under any circumstances.

Question 7

The doctrine of promissory estoppel requires a clear and definite promise.

Accepted Answer

A) True 
 B)False

Question 8

Normally, a court of law will not question the adequacy of consideration.

Accepted Answer

A) True 
 B)False

Question 9

Cashing a check in an amount for less than a balance owed and on which the debtor has written "payment in full" will discharge a liquidated debt.

Accepted Answer

A) True 
 B)False

Question 10

Quinn promises to sell his recreational vehicle (RV) to Sid, who builds a structure behind his house in which to keep it. Quinn's later attempt to renege on the promise is

Accepted Answer

A)  effective if Quinn did not ask Sid to build anything. 
B)  effective if Quinn wants to sell the RV to someone else. 
C)  not effective if Sid cannot obtain a similar RV for a similar price. 
D)  not effective if Sid detrimentally relied on Quinn's promise. 
A)  effective if Quinn did not ask Sid to build anything. 
B)  effective if Quinn wants to sell the RV to someone else. 
C)  not effective if Sid cannot obtain a similar RV for a similar price. 
D)  not effective if Sid detrimentally relied on Quinn's promise.

Question 11

Extraordinary difficulties that were unforeseen at the time a contract was formed do not justify a demand for additional compensation.

Accepted Answer

A) True 
 B)False

Question 12

Baked Goods Company agrees to supply Comida Café with all the corn chips that it re?quires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Baked Goods asks Comida to pay a higher price for the chips. This request is

Accepted Answer

A)  invalid as an attempt at extortion or the so-called holdup game. 
B)  invalid under the preexisting duty rule. 
C)  valid as a risk ordinarily assumed in business. 
D)  valid due to the unforeseen difficulty of the sudden price increase. 
A)  invalid as an attempt at extortion or the so-called holdup game. 
B)  invalid under the preexisting duty rule. 
C)  valid as a risk ordinarily assumed in business. 
D)  valid due to the unforeseen difficulty of the sudden price increase.

Question 13

Applied Methods Corporation promises to give stock options to Brad, a production designer, for processes he has already designed. This promise is

Accepted Answer

A)  enforceable because it is a new contract. 
B)  enforceable because it is an illusory promise. 
C)  enforceable because it is supported by past consideration. 
D)  unenforce?able. 
A)  enforceable because it is a new contract. 
B)  enforceable because it is an illusory promise. 
C)  enforceable because it is supported by past consideration. 
D)  unenforce?able.

Question 14

An accord and satisfaction is used to discharge a liquidated debt.

Accepted Answer

A) True 
 B)False

Question 15

After an accident with a driver for General Transport Company (GTC), Paul signs a covenant not to sue GTC for damages in a tort action if it pays for the damage to his car. This covenant

Accepted Answer

A)  bars recovery only if GTC pays. 
B)  is an illusory contract. 
C)  is barred by the preexisting duty rule. 
D)  is unconscionable. 
A)  bars recovery only if GTC pays. 
B)  is an illusory contract. 
C)  is barred by the preexisting duty rule. 
D)  is unconscionable.

Question 16

Fact Pattern 12-A1 
Dave's Hobby Town and Eva's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Eva a discount on purchases from Dave's store if Eva will not tow the cars of Dave's customers who park in Eva's lot.
-Refer to Fact Pattern 12-A1. Eva's forbearance from towing is legally sufficient consid?eration

Accepted Answer

A)  because it is a promise of something of value. 
B)  only if Dave's customers park in Eva's lot. 
C)  only if Eva's customers cannot park in her lot because it is full. 
D)  under no circumstances. 
A)  because it is a promise of something of value. 
B)  only if Dave's customers park in Eva's lot. 
C)  only if Eva's customers cannot park in her lot because it is full. 
D)  under no circumstances.

Question 17

A promise to pay for an act that has already occurred is enforceable.

Accepted Answer

A) True 
 B)False

Question 18

Parties are not generally free to bargain as they wish.

Accepted Answer

A) True 
 B)False

Question 19

Promissory estoppel requires reliance of a substantial and definite character.

Accepted Answer

A) True 
 B)False

Question 20

Fact Pattern 12-B2 
Dag and Enita are in an auto accident. Dag offers B $2,000 if Enita promises not to pursue her potential legal claim against Dag. Enita agrees. Later, Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury.
-Refer to Fact Pattern 12-B2. In Enita's suit against Dag to recover her repair and medical expenses, Enita will most likely recover

Accepted Answer

A)  half the amount to pay those costs over what Dag already paid Enita. 
B)  nothing. 
C)  the estimated amount to pay those costs and any other liability. 
D)  the exact amount to pay those costs and no more. 
A)  half the amount to pay those costs over what Dag already paid Enita. 
B)  nothing. 
C)  the estimated amount to pay those costs and any other liability. 
D)  the exact amount to pay those costs and no more.

Exam 12: Consideration

Promises to pay debts barred by a statute of limitations are not enforce?able due to the absence of consideration.

Ida promises to pay Jon, her son, $15,000 if he obtains his degree at Kappa University, where he is currently in his second year. Jon graduates. Ida is

Mary promises to pay her assistant Ned $10,000 in consideration of the ser?vices he provided over the years. Mary never pays Ned. Mary is

Carl pledges $1,000 to the Disaster Relief Organization (DRO). On the ba?sis of the pledge, DRO orders additional rescue equipment. Carl fails to pay. In DRO's suit, a court may enforce the pledge

Speedy Assembly Company promises its employees a 10-percent raise at the end of the year if productivity has increased and management feels it is warranted. Speedy must

The doctrine of promissory estoppel requires a clear and definite promise.

Normally, a court of law will not question the adequacy of consideration.

Cashing a check in an amount for less than a balance owed and on which the debtor has written "payment in full" will discharge a liquidated debt.

Quinn promises to sell his recreational vehicle (RV) to Sid, who builds a structure behind his house in which to keep it. Quinn's later attempt to renege on the promise is

Extraordinary difficulties that were unforeseen at the time a contract was formed do not justify a demand for additional compensation.

Baked Goods Company agrees to supply Comida Café with all the corn chips that it re?quires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Baked Goods asks Comida to pay a higher price for the chips. This request is

Applied Methods Corporation promises to give stock options to Brad, a production designer, for processes he has already designed. This promise is

An accord and satisfaction is used to discharge a liquidated debt.

After an accident with a driver for General Transport Company (GTC), Paul signs a covenant not to sue GTC for damages in a tort action if it pays for the damage to his car. This covenant

A promise to pay for an act that has already occurred is enforceable.

Parties are not generally free to bargain as they wish.

Promissory estoppel requires reliance of a substantial and definite character.

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

The Statute of Fraudswriting Requirements

Ethics and Business Decision Making

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crimes

Nature and Terminology

Agreement

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

E-Contracts and E-Signatures

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks, the Banking System, and E-Money

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Liability to Third Parties and Termination

Employment and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporationsformation and Financing

Corporationsdirectors, Officers, Shareholders

Corporationsmerger, Consolidation, Termination

Corporationssecurities Law Corporate Governance

Law for Small Businesses

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Personal Property and Bailments

Real Property and Landlord-Tenant Relationships

Insurance

Wills and Trusts

Professional Liaility and Accountability

International Law in a Global Economy

Legal and Ethical Issues in Business

Legal Issues

Contracts and Business Law

Contracts and Liability

Banking and Payment Systems

Loan Security and Repossession in Credit Transactions

Employment Law and Ethics

Legal Issues in Corporate Governance and Business Operations

Legal and Ethical Issues in Environmental Protection and Consumer Rights

Legal Issues in Property and Land Use

Accounting and Ethics