Question 1

In contract law, "consideration" refers to the time that a party takes to evaluate a deal.

Accepted Answer

A) True 
 B)False

Question 2

Unforeseen difficulties that justify a demand for additional compensa?tion in?clude risks ordinarily assumed in business.

Accepted Answer

A) True 
 B)False

Question 3

Real Estate Investments, Inc., owns and manages an office building. Secure Insurance Company agrees to lease the building for five years. Un?der the lease, Secure is obligated to pay all of the utility costs. Two years into the term, Secure asks Real Estate to modify the lease to provide that the utility costs be split equally between them. Real Estate agrees, but later decides it does not want to share the costs and refuses to pay. Is the landlord bound to its agreement to share the utility costs? Why or why not?

Accepted Answer

Real Estate Investments, Inc., the landl

Question 4

A release is a contract in which one party forfeits the right to pursue a le?gal claim against another.

Accepted Answer

A) True 
 B)False

Question 5

Betty pledges to donate $1,000 to the Children's Hospital. On the basis of the pledge, the hospital orders additional equipment. Betty reneges on the pledge. The hospital sues Betty. If the court enforces the pledge, it will be

Accepted Answer

A)  because Betty's performance is uncertain. 
B)  because of the unforeseen difficulties. 
C)  because the pledge is a gift. 
D)  under the doctrine of promissory estoppel. 
A)  because Betty's performance is uncertain. 
B)  because of the unforeseen difficulties. 
C)  because the pledge is a gift. 
D)  under the doctrine of promissory estoppel.

Question 6

Axel, the owner of Bar-B-Q Café, announces that he plans to paint its front fluorescent red. Cleo, the owner of Delicate Dress Shop next door, promises to pay Axel $1,000 to use a more conservative color. Axel agrees. Cleo's promise is

Accepted Answer

A)  enforceable, because Axel agreed to refrain from doing something that he was legally entitled to do. 
B)  enforceable, because Axel would resent Cleo if she never paid. 
C)  unenforceable, because Axel agreed to refrain from doing some?thing that he was legally entitled to do. 
D)  unenforceable, because Axel's color choice was offensive to Cleo. 
A)  enforceable, because Axel agreed to refrain from doing something that he was legally entitled to do. 
B)  enforceable, because Axel would resent Cleo if she never paid. 
C)  unenforceable, because Axel agreed to refrain from doing some?thing that he was legally entitled to do. 
D)  unenforceable, because Axel's color choice was offensive to Cleo.

Question 7

Inadequate consideration may indicate undue influence.

Accepted Answer

A) True 
 B)False

Question 8

MicroCorp hires Nick to work for one month at a weekly salary of $400. A MicroCorp representative orally agrees two weeks later to double Nick's salary. This agree?ment is

Accepted Answer

A)  enforceable because an employment contract is an adhesion contract. 
B)  enforceable because the parties have executed an accord and satisfaction. 
C)  unenforceable because Nick has incurred no additional detriment in ex?change for MicroCorp's promise. 
D)  unenforceable because Nick's performance is uncertain. 
A)  enforceable because an employment contract is an adhesion contract. 
B)  enforceable because the parties have executed an accord and satisfaction. 
C)  unenforceable because Nick has incurred no additional detriment in ex?change for MicroCorp's promise. 
D)  unenforceable because Nick's performance is uncertain.

Question 9

An obligation is enforceable only if it is supported by past consideration.

Accepted Answer

A) True 
 B)False

Question 10

To be legally sufficient, consideration must include something of economic value.

Accepted Answer

A) True 
 B)False

Question 11

A covenant not to sue is the substitution of a contractual obligation for a legal action.

Accepted Answer

A) True 
 B)False

Question 12

For consideration to have "legally sufficient value," it must con?sist of goods or money.

Accepted Answer

A) True 
 B)False

Question 13

Mei writes a check to Nat in an amount that represents half of her debt to him. On the back of the check, Mei includes the words "payment in full." Nat cashes the check. This dis?charges the entire debt

Accepted Answer

A)  if the debt is liquidated. 
B)  if the debt is past due. 
C)  if the debt is unliquidated. 
D)  under no circumstances. 
A)  if the debt is liquidated. 
B)  if the debt is past due. 
C)  if the debt is unliquidated. 
D)  under no circumstances.

Question 14

Rescission is the dissolution of a contract that returns the parties to the positions they held before the contract.

Accepted Answer

A) True 
 B)False

Question 15

Fact Pattern 12-A2 
Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 12-A2. "Adequacy" of consideration refers to

Accepted Answer

A)  "how much" consideration is given. 
B)  legally sufficient value in the eyes of the law. 
C)  the intangible value to a contracting party of a thing exchanged. 
D)  the substantiality of the consideration exchanged. 
A)  "how much" consideration is given. 
B)  legally sufficient value in the eyes of the law. 
C)  the intangible value to a contracting party of a thing exchanged. 
D)  the substantiality of the consideration exchanged.

Question 16

Jeff offers Kelly $1,000 for her three-year-old laptop computer. Kelly ac?cepts. If a dispute arises, a court would likely

Accepted Answer

A)  enforce the deal after questioning the adequacy of consideration. 
B)  not question the adequacy of the consideration. 
C)  rewrite the deal after questioning the adequacy of consideration. 
D)  set aside the deal after questioning the adequacy of consideration. 
A)  enforce the deal after questioning the adequacy of consideration. 
B)  not question the adequacy of the consideration. 
C)  rewrite the deal after questioning the adequacy of consideration. 
D)  set aside the deal after questioning the adequacy of consideration.

Question 17

Fact Pattern 12-B1 
Sal contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 12-B1. The next day, Sal changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sal and Tasty

Accepted Answer

A)  may agree to a new contract, but it cannot include a new price. 
B)  may agree to a new contract that includes the new price. 
C)  must perform their original contract. 
D)  must perform the part of their original contract that is executory. 
A)  may agree to a new contract, but it cannot include a new price. 
B)  may agree to a new contract that includes the new price. 
C)  must perform their original contract. 
D)  must perform the part of their original contract that is executory.

Question 18

An accord and satisfaction requires that the amount of a debt be certain.

Accepted Answer

A) True 
 B)False

Question 19

Fact Pattern 12-A3 
Cut-Rate Construction Company begins building a restaurant for Diners Restaurants, Inc., but after two months demands an extra $100,000. Diners agrees to pay.
-Refer to Fact Pattern 12-A3. If CCC offers no reason for the extra $100,000, but says only that it will otherwise stop construction, the agreement is

Accepted Answer

A)  enforceable as an accord and satisfaction. 
B)  enforceable because of unforeseen difficulties. 
C)  unenforceable as an illusory promise. 
D)  unenforceable due to the preexisting duty rule. 
A)  enforceable as an accord and satisfaction. 
B)  enforceable because of unforeseen difficulties. 
C)  unenforceable as an illusory promise. 
D)  unenforceable due to the preexisting duty rule.

Question 20

Quality Steel Corporation files a suit against Rite Tool Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the considera?tion if

Accepted Answer

A)  it is obvious that the consideration is adequate. 
B)  Rite Tool asserts that there is adequate consideration. 
C)  something of value passed between the parties. 
D)  the consideration is worth more than $100. 
A)  it is obvious that the consideration is adequate. 
B)  Rite Tool asserts that there is adequate consideration. 
C)  something of value passed between the parties. 
D)  the consideration is worth more than $100.

Exam 12: Consideration

In contract law, "consideration" refers to the time that a party takes to evaluate a deal.

Unforeseen difficulties that justify a demand for additional compensa?tion in?clude risks ordinarily assumed in business.

A release is a contract in which one party forfeits the right to pursue a le?gal claim against another.

Betty pledges to donate $1,000 to the Children's Hospital. On the basis of the pledge, the hospital orders additional equipment. Betty reneges on the pledge. The hospital sues Betty. If the court enforces the pledge, it will be

Axel, the owner of Bar-B-Q Café, announces that he plans to paint its front fluorescent red. Cleo, the owner of Delicate Dress Shop next door, promises to pay Axel $1,000 to use a more conservative color. Axel agrees. Cleo's promise is

Inadequate consideration may indicate undue influence.

MicroCorp hires Nick to work for one month at a weekly salary of $400. A MicroCorp representative orally agrees two weeks later to double Nick's salary. This agree?ment is

An obligation is enforceable only if it is supported by past consideration.

To be legally sufficient, consideration must include something of economic value.

A covenant not to sue is the substitution of a contractual obligation for a legal action.

For consideration to have "legally sufficient value," it must con?sist of goods or money.

Mei writes a check to Nat in an amount that represents half of her debt to him. On the back of the check, Mei includes the words "payment in full." Nat cashes the check. This dis?charges the entire debt

Rescission is the dissolution of a contract that returns the parties to the positions they held before the contract.

Jeff offers Kelly $1,000 for her three-year-old laptop computer. Kelly ac?cepts. If a dispute arises, a court would likely

An accord and satisfaction requires that the amount of a debt be certain.

Quality Steel Corporation files a suit against Rite Tool Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the considera?tion if

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The Statute of Fraudswriting Requirements

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E-Contracts and E-Signatures

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Title, Risk, and Insurable Interest

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The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

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