Deck 8: Consideration

Question 1

Love and affection are generally considered to be valid consideration.

Answer 1

False

Question 2

A promise to pay a reward to a police officer for capturing a criminal is not legally enforceable.

Answer 2

True

Question 3

Promising to do something you are already required to do is adequate consideration.

Answer 3

False

Question 4

A liquidated debt is one that is not in dispute.

Question 5

Part payment of a debt may cancel the entire debt if there is an honest dispute over the exact amount of the debt.

Question 6

Courts never question the adequacy of consideration.

Question 7

Promises made to charitable organizations that depend upon volunteer contributions are generally enforceable without consideration.

Question 8

Consideration may be something other than money.

Question 9

Consideration is needed to make a promise legally enforceable.

Question 10

A promise to refrain from doing something that the law requires is consideration.

Question 11

An agreement that lacks consideration is said to be

A) illegal.
B) a benefit to the promisor.
C) a benefit to the promisee.
D) unenforceable.

Question 12

To be legally enforceable as a contract, the courts require that each party to an agreement give up something of value called

A) witnesses.
B) a written document.
C) consideration.
D) none of these.

Question 13

A promise to make a gift is enforceable in a court of law.

Question 14

Forbearance is a promise to do something you are not legally required to do.

Question 15

Benson orally promised to give his nineteen-year-old son a car as a birthday gift. Benson was not legally bound to his promise because

A) the promise was made orally.
B) a promise to make a gift is unenforceable.
C) the promise was a past consideration.
D) an executed gift requires consideration.

Question 16

Consideration may be

A) money.
B) property.
C) a promise not to do something you have the legal right to do.
D) all of these.

Question 17

A debtor who makes a part payment of the debt before the due date is still liable for the balance if there is no dispute over the debt.

Question 18

Courts will not enforce contracts calling for nominal consideration.

Question 19

Consideration can be

A) a benefit to the offeror.
B) a sacrifice by the offeree.
C) performing an act.
D) all of these.

Question 20

A creditor's promise to accept less than the amount owed as full payment of a debt is legally binding.

Question 21

A creditor's agreement to accept part payment as full settlement of a debt is enforceable

A) at all times.
B) if the creditor receives additional consideration from the debtor.
C) when the due date is extended.
D) in all of these cases.

Question 22

Part payment of a liquidated claim

A) discharges the remainder of the claim.
B) discharges the remainder of the claim if the creditor marks "paid in full" on any receipt given to the debtor.
C) discharges the remainder of the claim if, in addition to the part payment, the debtor gives additional consideration.
D) discharges the remainder of the claim if the debtor states that he or she has no more funds with which to pay the remainder of the debt.

Question 23

Past consideration

A) is synonymous with moral consideration.
B) is a promise made for an act about to take place.
C) usually induces the offeree to act.
D) is a promise made for an act that has already taken place.

Question 24

The Wurzer Corporation entered into a written contract to hire Dixon in an executive position for six years for $200,000 a year. After three years, Dixon asked for a raise of $25,000 per year. Wurzer at first refused, but then agreed because of the pressure placed on him by Dixon. After the sixth year Dixon left his position with the Corporation and Wurzer sued for a return of the extra $25,000 per year for the three remaining years on Dixon's contract. Who should win the case?

A) Dixon, because Wurzer agreed to the raise.
B) Dixon, if the raise was agreed to in writing
C) Wurzer, even though Wurzer agreed to the raise
D) Wurzer, because Dixon had applied pressure to get the raise.

Question 25

If a person owes several people money, that person can give each of the creditors part of the total amount owed. If this arrangement is agreed to by all creditors, it is called

A) a pledge.
B) promissory estoppel.
C) a composition of creditors.
D) past consideration.

Question 26

Part payment of a debt can cancel a debt if there is an honest dispute over the correct amount of the debt called a(n) ____________________ claim.

Question 27

Refraining from doing something you have a legal right to do is called ____________________.

Question 28

When a debtor and a creditor are in agreement about how much money is owed, the debt is said to be

A) liquidated.
B) pre-existing.
C) unliquidated.
D) adequate.

Question 29

Courts sometimes apply the doctrine of promissory estoppel to enforce a promise. This doctrine

A) is grossly unfair.
B) requires consideration to be applicable.
C) sometimes allows enforcement of a promise even when an offeree gives no consideration for an offeror's promise.
D) is a popular legal remedy.

Question 30

Martin sold his used car to Nixon for $2,000. Later Martin discovered that the car was worth $3,000. Martin then claimed that Nixon owed him an additional $1,000. If Martin attempted to take legal action to collect the additional $1,000, he would be entitled to

A) $1,000 plus legal fees.
B) $1,000 only.
C) $3,000 minus $1,000.
D) nothing.

Question 31

Consideration that consists of a sacrifice by the offeree is called ____________________.

Question 32

A beauty shop owner offered one of her employees a bonus of $100 over a six-month period if she would promise to give all customers excellent service. This promise by the beauty shop owner is

A) based on forbearance.
B) sufficient to give the employee the right to sue if she does provide good service and the beauty shop owner fails to pay.
C) not valid because the employee is already legally bound to give excellent service.
D) based on past consideration.

Question 33

Promises to make charitable subscriptions

A) are exempted from the necessity of consideration.
B) are not legally enforceable.
C) are based on promissory estoppel.
D) may not be valid unless large sums of money are involved.

Question 34

Morton owed Dowd $1,000. The debt was due on May 1. The debt would not be discharged if

A) on the due date, Dowd agreed to accept $500 and a watch valued at $150 in full settlement of the debt.
B) Dowd insisted the debt was $1,000, but Morton claimed it was $500, and they compromised on $650 in full settlement.
C) on April 15, Dowd agreed to accept $500 in full settlement.
D) on July 1, Dowd orally agreed to accept $500 in full settlement of the $1,000 debt.

Question 35

____________________ is something of value given by each party to a contract to bind the agreement.

Question 36

Modern courts now protect individuals from contracts that are so one-sided as to be ____________________.

Question 37

Which agreement is unenforceable because of lack of valid consideration?

A) Johnson agreed to donate $1,000 to the United Hospital Building Fund. Based upon this and similar promises, construction was started.
B) Davis promised to give his neighbor's young son $50 if the boy would refrain from trespassing on his property. Because of Davis's promise, the boy complied.
C) Boyd agreed to sell his used motorboat to Yates for $300. Yates tendered the $300.
D) Philips promised his nephew $5,000 if the boy would refrain from smoking until he reached twenty-one years of age. Because of this promise, the nephew complied.

Question 38

In which of the following situations would the courts enforce an oral agreement to pay extra compensation?

A) A builder promises to complete a contract on the date previously agreed upon if he is given extra compensation.
B) A police officer promises a neighborhood deli owner that, for a fee, he will keep a sharp lookout for burglars on the nights that he is on duty.
C) An accountant promises to complete an audit sixty days ahead of time if she is given extra compensation.
D) In no case will the courts allow the payment of extra compensation when the request is based on an oral contract.

Question 39

Jennings found and returned Martin's lost wallet. Martin promised to give Jennings a reward the next day after he cashed a check. Martin is not legally bound to pay a reward as he promised, because the consideration for the promise was

A) past.
B) present.
C) future.
D) not legal.

Question 40

A composition of creditors

A) allows creditors to sue the debtor.
B) is binding on all creditors.
C) allows creditors to collect the full amount owed.
D) is illegal.

Question 41

Holmes promised to donate $500 to the United Fund. Could Holmes be sued if he failed to make the donation? Why or why not?

Question 42

While Holt was out of town, Wills took care of Holt's garden. When Holt returned, she promised to pay Wills $75. Is Holt's promise enforceable? Explain.

Question 43

Courts will sometimes enforce contracts when a small amount of consideration, such as $1, is given for a promise. This small sum of money is called ____________________.

Question 44

____________________ is a promise made for an act that has already occurred.

Question 45

Can a debtor be held liable for any of her debts that have been outlawed by the statute of limitations?

Question 46

Agreements enforceable without consideration are generally based on principles of ____________________ rather than on principles of law.

Question 47

Dial owed Lake $300. On the due date, Dial asked for an extension of two months and Lake agreed. One week later, Lake sued for the full $300. What are Dial's rights?

Question 48

If, before maturity of a debt, the creditor accepts a lesser sum offered in full payment, the entire debt will be ____________________.

Question 49

Iosa promised to pay a police officer $150 to keep an eye on Iosa's store while she was away. Is Iosa's promise binding? Why or why not?

Question 50

Part payment of a disputed debt may cancel the debt if the creditor accepts and cashes a check marked ____________________.