Deck 11: Consideration and Promissory Estoppel

Question 1

Under which of the following conditions is a contract said to have legal value?

A)the promisor receives a legal benefit
B)the promisor suffers a legal detriment
C)both promisor and promisee receives a legal benefit
D)both promisor and promisee suffers a legal detriment

Answer 1

A

Question 2

Promissory estoppel is an equity doctrine that permits parties to enforce a contract that includes consideration.

Answer 2

False

Question 3

Which of the following is true of a gift promise?

A)A gift promise can be enforced in a court of law.
B)A completed gift promise cannot be cancelled for lack of consideration.
C)A gift promise contains considerations.
D)The promisee can take legal action if the promisor does not uphold the promise.

Answer 3

B

Question 4

Forbearance of a legal right can be provided as consideration.

Question 5

If a contract that was lacking in consideration is performed by the parties,the parties cannot subsequently assert lack of consideration to undo the performed contract.

Question 6

Considerations can only be monetary or economic in nature.

Question 7

An out-of-court settlement in exchange for dropping a lawsuit is an example of consideration.

Question 8

For a gift promise to be enforceable,the promisee must offer a consideration.

Question 9

A contract is considered to be supported by legal value if the promisee receives a legal benefit.

Question 10

A contract is said to have legal value if ________.

A)both the promisor and the promisee receive a legal benefit
B)the promisor suffers a legal detriment
C)the promisee suffers a legal detriment
D)the promisee receives a legal benefit

Question 11

What is contract consideration?

Question 12

Mark,who recently won a lottery,tells Sean that he will split his lottery winnings with him if Sean can arrange Mark's interview with his boss.Sean talks to his boss and the meeting is arranged.But when Sean goes to collect half of Mark's lottery winnings,Mark refuses to pay.What is the act of consideration in this scenario?

A)Mark telling Sean he will split his lottery winnings with him
B)Sean arranging the interview
C)Mark going for the interview
D)Sean asking for half of the lottery winnings

Question 13

Under which of the following conditions can one convert a gift promise into an enforceable promise?

A)if the promisee offers a consideration
B)if the promisor offers a consideration
C)if the promisee receives a legal benefit
D)if the promisor suffers a legal detriment

Question 14

A contract is considered to be supported by legal value if the promisor suffers a legal detriment.

Question 15

A promise is something of legal value given in exchange of a consideration.

Question 16

A consideration need not be of legal value to be enforceable.

Question 17

Which of the following is supported by consideration?

A)written contract
B)gift promise
C)illusory promise
D)preexisting duty

Question 18

Which of the following condition is required for the two companies to enter into a legally enforceable contract?

A)The considerations must be beneficial to both parties involved.
B)The considerations must be detrimental to both parties involved.
C)The considerations must be mentioned in writing in the contract.
D)The considerations must be bargained-for exchange of a service or product.

Question 19

To be enforceable,a contract must be supported by consideration.

Question 20

To meet contractual legality,considerations must be ________.

A)beneficial to both parties involved
B)detrimental to both parties involved
C)mentioned in writing in the contract
D)bargained-for exchange of promise for performance

Question 21

Dean Campenella is a detective with the California state police.During the investigation of a missing child,Campenella found new clues that led to the capture of a serial killer involved in another case.Since Campenella was not involved in the serial killer case,and found the clues while investigating another case,Campenella demanded a special reward from the state police department for his help in catching the killer.But his demand was declined citing lack of consideration.Campenella's demand lacks consideration under which of the following?

A)preexisting duty
B)illegal consideration
C)gift promise
D)illusory promise

Question 22

A contract into which both parties enter but in which one or both of the parties can choose not to perform their contractual obligations is known as ________.

A)illusory promise
B)gift promise
C)preexisting duty
D)illegal consideration

Question 23

Hartman,who worked for Aratize Inc.for 25 years,decides to retire.Upon hearing the news of his retirement,the president of Aratize announces a bonus of $250,000 to Hartman for his exceptional services toward Aratize thus far.But upon retiring,Hartman isn't paid the bonus.Hartman decides to sue the president and Aratize to recover the promised bonus.Which of the following is true in this case?

A)It will be enforceable in court because it is a gift promise.
B)It will not be enforceable in court because of past consideration.
C)It will not be enforceable because the president is not authorized to make such a promise.
D)It will not be enforceable because it is an unlawful consideration.

Question 24

Corey in a desperate need to get to the airport decides to take his neighbor Tanner's help.Tanner agrees to help and drives Corey to the airport.Upon arrival at the airport,Corey promises to pay Tanner $25 for the gas fill.Which of the following conditions would have made the contract between Corey and Tanner enforceable?

A)if Tanner had driven Corey to the airport in the past
B)if Corey, upon arrival, had promised to pay gas money to Tanner whenever he could
C)if the promise to pay gas money had been made before the trip was made
D)if Tanner was contracted to drive Corey to the airport as a duty

Question 25

Mary buys a lottery ticket and promises to buy her friend Sharon a new pair of shoes if she checks the lottery results while Mary is away.Sharon agrees to do so,provided she has the time for it.What kind of contract do Mary and Sharon have?

A)preexisting duty
B)past consideration
C)illegal consideration
D)illusory promise

Question 26

A contract in which a seller agrees to sell all of its production to a single buyer is known as a(n)________.

A)requirements contract
B)output contract
C)best-efforts contract
D)option contract

Question 27

________ is a promise to refrain from doing an unlawful act,and therefore is a promise that will not support a contract.

A)Preexisting duty
B)Illusory promise
C)Illegal consideration
D)Gift promise

Question 28

Poweroxi Inc.produces rocket propellant fuel that is used in space shuttles.NASA is an agency that requires rocket propellant fuel to send its rockets to space.NASA enters into a contract with Poweroxi Inc.to purchase all of the propellant fuel it will need that year from Poweroxi.What would this contract be an example of?

A)requirements contract
B)output contract
C)option contract
D)yield contract

Question 29

A gift promise is enforceable if the promisor withdraws from his promise.

Question 30

A promise lacks consideration if a person promises to perform an act or do something he or she is already under an obligation to do.This is called a(n)________.

A)illegal consideration
B)preexisting duty
C)gift promise
D)illusory promise

Question 31

Which of the following is true of output contracts?

A)It cannot contain the best-efforts clause.
B)It provides the seller with reduced selling costs.
C)It assures the purchaser that the seller will use his or her best efforts to achieve the contract's objective.
D)It assures the seller of a purchaser for all its outputs.

Question 32

A(n)________ is a contract in which a buyer agrees to purchase all of its requirements for an item from one seller.

A)option contract
B)requirements contract
C)best-efforts contract
D)output contract

Question 33

With regard to unenforceable contracts,an extortion call in which a man agrees to pay money in return for his family's safety would be considered as a(n)________.

A)preexisting duty
B)illusory promise
C)illegal consideration
D)past consideration

Question 34

Mary buys a lottery ticket and promises to buy her friend Sharon a new pair of shoes if she checks the lottery results while Mary is away.Sharon agrees to do so,provided she has the time for it.If Sharon fails to check the results and Mary wins the lottery,which of the following would be true of the contract between Mary and Sharon?

A)Mary can claim for breach of contract against Sharon.
B)Sharon can claim for breach of contract against Mary.
C)Neither Mary nor Sharon can claim breach of contract.
D)Mary's promise is supported by consideration.

Question 35

Why does an illusory contract lack consideration?

A)because the consideration promised is unlawful and therefore void
B)because the person promises to perform an act or do something he or she is already under an obligation to do
C)because one or both parties can choose not to perform their contractual obligations
D)because the compensation paid is for work done in the past

Question 36

Corey in a desperate need to get to the airport decides to take his neighbor Tanner's help.Tanner agrees to help and drives Corey to the airport.Upon arrival at the airport,Corey promises to pay Tanner $25 for the gas fill.Corey's promise falls under which of the following contracts?

A)illegal consideration
B)illusory promise
C)preexisting duty
D)past consideration

Question 37

A gift promise requires the promisee to provide consideration.

Question 38

A completed gift promise cannot be rescinded for lack of consideration.

Question 39

Which of the following is true of a buyer with an output contract?

A)The buyer cannot sue the seller in case the seller plans to share its output with another buyer.
B)The buyer can choose to buy when and what he wants from the seller.
C)The buyer is obliged to buy all the goods sold by the seller.
D)The buyer cannot enforce the best-efforts clause in the output contract.

Question 40

Which of the following is true of an illegal consideration?

A)Contract requires that either both parties suffer legal detriment.
B)Contract requires that the promisor receives a legal benefit.
C)Contract requires that the promisee suffer a legal detriment.
D)Contracts based on illegal consideration are void.

Question 41

A requirements contract is a contract in which a buyer agrees to purchase all of its requirements for an item from one seller.

Question 42

A promise based on past consideration is not enforceable.

Question 43

In an output contract,the buyer agrees to make all of its purchases from one buyer.

Question 44

A requirements contract is unenforceable due to lack of consideration.

Question 45

Poweroxi Inc.produces rocket propellant fuel that is used in space shuttles.NASA is an agency that requires rocket propellant fuel to send its rockets to space.NASA enters into a contract with Poweroxi Inc.to purchase all of the propellant fuel it will need that year from Poweroxi.Which of the following conditions would constitute a breach in contract?

A)if Poweroxi sold to another purchaser
B)if Poweroxi sold to another purchaser at a lower price
C)if NASA purchased fuel from another seller
D)if NASA stopped purchasing from Poweroxi due to lack of need

Question 46

________ is an agreement whereby the parties agree to accept something different in satisfaction of the original contract.

A)Counteroffer
B)Accord
C)Promissory estoppel
D)Mirror image acceptance

Question 47

An illusory promise is an example of a contract that lacks consideration.

Question 48

James's attempt to make a new contract is void because it lacks consideration under the ________ concept.

A)illegal consideration
B)gift promise
C)past consideration
D)preexisting duty

Question 49

Illusory promises require both parties to perform their contractual obligations.

Question 50

Preexisting duty promise is unenforceable because of the introduction of a new consideration.

Question 51

Illusory promises are enforceable if one of the parties has performed their contractual obligation.

Question 52

Contracts falling under past consideration are unenforceable.

Question 53

Output contracts serve the legitimate business purposes of assuring the seller of a purchaser for all its output.

Question 54

A new promise can include a past consideration for it to be enforceable.

Question 55

Contracts based on illegal consideration are valid.

Question 56

Toughones,a car part manufacturer,signed a contract to license computer software from Vizera Inc.for $250,000.This software is to be used to keep track of inventory,accounts receivable,and other financial data.After the software was installed,the computer system worked,but it had a few glitches.Toughones refused to pay the full amount mentioned in the contract.To settle the dispute,the parties agree that $180,000 is to be paid as full and final payment for the software.Toughones paid $180,000 as agreed.What kind of agreement did Toughones and Vizera reach in the end?

A)accord and satisfaction
B)preexisting duty
C)counteroffer
D)mirror image acceptance

Question 57

What is a best-efforts contract?

Question 58

Explain the preexisting duty principle in private sector contracts.

Question 59

The preexisting rule allows for midstream changes to be enforceable in a contract.

Question 60

Imposition of the best-efforts duty provides sufficient consideration to make a contract enforceable.

Question 61

If the accord is not satisfied,the other party can sue to enforce the accord.

Question 62

Give an account of the doctrine of promissory estoppel.

Question 63

________ is an equity doctrine that permits a court to order enforcement of a contract that lacks consideration.

A)Illusory promise
B)Gift promise
C)Promissory estoppel
D)Option contract

Question 64

Which of the following is true of an accord?

A)The accord terminates the original contract.
B)The nonbreaching party cannot enforce the original contract if the accord is not satisfied.
C)It is enforceable even though no new consideration is given.
D)An accord is only reached when both parties of the contract fail to meet their contractual obligations.

Question 65

If Catapipes Plumbing plans to withdraw its bid,what legal doctrine can help AtlasNow from being meted out injustice due to lack of consideration?

A)promissory estoppel
B)freedom of contract
C)acquiescence
D)exclusionary rule

Question 66

Once an accord has been reached,the original contract cannot be enforced under any circumstance.

Question 67

Which of the following is true of a promissory estoppel?

A)It is invoked in cases having option contract infringements.
B)It permits a court to order enforcement of a contract that lacks consideration.
C)It allows for a party to claim goods, which were revoked, for which it has already paid consideration.
D)It is invoked in cases that involve a promissory note to pay considerations at a later time.

Question 68

An accord is enforceable even though no new consideration is given.

Question 69

A promissory estoppel is usually used to provide a remedy to a party who has relied on another party's promise.

Question 70

If the accord is performed,it is called a satisfaction.

Question 71

An accord is a compromise reached between two parties to settle a claim.

Question 72

Which of the following is true of applying promissory estoppels to a contract?

A)Both parties must suffer legal detriment.
B)Injustice would be caused if the promise were not enforced.
C)They can be applied for illusory promise contracts.
D)They can be applied for gift promise contracts.

Question 73

What is accord and satisfaction in contractual terms?

Question 74

In the above scenario,to avoid legal nuisance,Frasier decides to compromise with James.He asks James to fix a tap in the barn for $250,and modify the current contract to include the tap in the barn.James agrees to this,and does as asked while Frasier remakes the contract.Which of the following would this kind of settlement be referred to as?

A)duress
B)past consideration
C)accord
D)mirror image rule acceptance

Question 75

Promissory estoppels can be invoked for cases that include consideration.