Deck 8: Agreement and Consideration

Question 1

If a promise is made,it will be enforced.

Answer 1

False

Question 2

An offer is sufficient to evidence an agreement.

Answer 2

False

Question 3

An acceptance that materially changes a term in the offer still creates a valid agreement.

Answer 3

False

Question 4

A transaction that lacks a bargained-for exchange lacks an element of consideration.

Question 5

A counteroffer does not terminate but continues an offer.

Question 6

A valid offer requires reasonably certain terms.

Question 7

The communication of an offer can be done by any effective means.

Question 8

An offer made illegal by a statute terminates only af?ter a rea?sonable time.

Question 9

An advertisement-"this property for sale"-is an offer.

Question 10

An expression of opinion-"your customers will like this"-is an of?fer.

Question 11

Under the mailbox rule,an acceptance is not valid until it is received.

Question 12

An offeror's subjective intent determines the validity of an offer.

Question 13

No offer can be accepted by silence.

Question 14

If the subject matter of an offer is destroyed,the offer will continue to ex?ist for a rea?son?able time to permit the seller to acquire replacement goods.

Question 15

An invitation to negotiate-"can you afford this?"-is an offer.

Question 16

A valid offer requires a reasonable price related to market value.

Question 17

An offer must be communicated by mail or in person.

Question 18

An offeror cannot revoke an option contract until the time specified in the offer has expired.

Question 19

In contract law,"consideration" refers to the courtesy that one party shows another in negotiating a deal.

Question 20

If an acceptance of an offer is received after the offer has been rejected,there is no contract.

Question 21

Inadequate consideration may reflect a lack of bargained-for exchange.

Question 22

Ordinary difficulties that could have been foreseen at the time a contract was formed do not justify a demand for additional compensation.

Question 23

An accord and satisfaction requires that the amount of a debt must not be in dispute.

Question 24

An illusory promise is a promise that is enforceable without consideration.

Question 25

A release does not require consideration to be legally binding.

Question 26

Two parties can mutually agree to rescind a contract if it is executory.

Question 27

Lolly offers to deliver to My-T-Fine Store's customers their purchases for a certain price.Lolly's intent to extend a serious offer to My-T-Fine is de?termined by reference to Lolly's

A)assumptions.
B)beliefs.
C)intentions.
D)words and conduct.

Question 28

A covenant not to sue is an agreement to substitute a contractual obliga?tion for a legal action.

Question 29

A covenant not to sue does not always bar further recovery.

Question 30

To be legally sufficient,consideration must include something of eco?nomic value.

Question 31

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

Question 32

A promise made with respect to a past event is enforceable because the event is cer?tain-it has already occurred.

Question 33

Luna tells Kofi,who has no knowledge of literary thrillers,that she will tutor him in the subject for $50.As an offer,this is

A)effective.
B)not effective,because thrillers are not literature.
C)not effective,because Luna's tutoring will be subjective.
D)not effective,because Kofi has no knowledge of the subject.

Question 34

An officer of International Sales Corporation makes overtures to a repre?sentative of Global Distribution,Inc. ,regarding a business deal.Under the objective theory of contracts,the officer's words and conduct are held to mean whatever

A)the officer subjectively intended them to mean.
B)a reasonable person in the officer's position would think they meant.
C)a reasonable person in the representative's position would think they meant.
D)the representative subjectively thought they meant.

Question 35

Rescission is the substitution of one party to a contract for a third party,who agrees to assume the contractual duties.

Question 36

Nate tells Opal,"I might sell the skis that I bought last fall since I haven't used them and the skiing season is almost over." This is

A)an acceptance of an offer.
B)an invitation to accept an offer.
C)an offer.
D)a statement of future intent.

Question 37

A promise to do something that one has a prior legal duty to do is not consideration.

Question 38

Hick,a representative of Interim Care Items,Inc. ,makes an offer to Jaqi,the owner of Kleen Hospice,Inc.The offer is effective even if

A)Hick does not communicate it to Jaqi.
B)Hick secretly does not intend to be bound by the offer.
C)Jaqi is not capable of accepting the offer.
D)the terms of the offer are not reasonably definite.

Question 39

Promissory estoppel requires reliance of a substantial and definite character.

Question 40

Parties are not generally free to make bad bargains.

Question 41

Yvon asks Zack,"Do you want to buy one of my fishing rods?" This is

A)a valid offer.
B)not a valid offer because the terms are not definite.
C)not a valid offer because Yvon did not state an intent.
D)not a valid offer because Zack did not respond.

Question 42

First State Bank offers to lend money to Greco at 15 percent interest.Before Greco accepts,a statute is enacted prohibiting loans at interest rates greater than 12 percent.Greco and the bank have

A)have a contract for a loan at 15 percent interest.
B)have a contract for a loan at 12 percent interest.
C)have a contract for a loan at 0 percent interest.
D)no contract for a loan.

Question 43

Tomato Farms (TF)offers to sell Unified Grocers,Inc. ,a boxcar load of tomatoes.The offer is sent via overnight delivery because an acceptance is re?quired urgently.It would be most reasonable for Unified to accept via

A)a fax,a letter,or a phone call to TF within two weeks.
B)a fax sent to TF as soon as the offer is received.
C)a letter mailed to TF within two days.
D)a phone call to TF within five business days.

Question 44

Fact Pattern 8-2
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 considera?tion for their contract was inadequate.
Refer to Fact Pattern 8-2.A court is most likely to evaluate the adequacy of consid?era?tion if

A)a thing exchanged has no intangible value to one of the parties.
B)something exchanged is not of direct economic or financial value.
C)the items exchanged were of unequal value.
D)there is a gross disparity in the value of the consideration exchanged.

Question 45

Corner Convenience Store (CCS)takes out a full-page ad in a local news?paper and runs a thirty-second commercial on a local television station,offering a reward for information lead?ing to the apprehension of the per?son who robbed the store.CCS could normally terminate the offer by

A)running a full-page ad in the paper and a thirty-second commer?cial on the local station.
B)placing a notice in the "Legal Announcements" section of the paper.
C)sending a notice to the news department of the local stations.
D)any of the choices.

Question 46

Sugar promises to perform,for a price,alteration services in affiliation with Togs 'n Things,a clothing store.To support a contract,the consid?eration ex?changed by the parties must be

A)adequately considerate.
B)equally valuable.
C)legally sufficient.
D)wisely priced.

Question 47

Fact Pattern 8-1
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 8-1.Dave's discount is legally sufficient consid?eration

A)because it is a promise of something of value.
B)only if Dave adds a cash rebate.
C)only if Eva uses it.
D)under no circumstances.

Question 48

Jane offers to sell Kyle three desks for his Lights & Lamps Company ad?ministrative office.Kyle sends a rejec?tion first,then changes his mind and sends an acceptance.Whether they have a contract is determined by

A)Kyle's rejection.
B)Kyle's subjective intent.
C)whatever Jane decides.
D)whether Kyle's rejection or acceptance is received first.

Question 49

Eastside Warehouse offers to sell a forklift to Forest Lumber Company,but it is stolen before Forest ac?cepts.Eastside must obtain

A)a forklift for Forest,if Eastside's insurance covers the loss.
B)a forklift for Forest,if it wants one.
C)nothing for Forest,because that would extend the time of the offer.
D)nothing for Forest,because the theft termi?nated the offer.

Question 50

Royal Properties,Inc. ,mails a flyer to hundreds of firms,advertising a building for sale.Super Soup Brewing Company responds by saying,"We accept your offer." Between Royal and Super,there is

A)a contract for the sale of the building.
B)a contract to consider the offer before any others.
C)a contract to negotiate a sale of the building.
D)no contract.

Question 51

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

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.

Question 52

Geof offers to sell his Honda for $10,000 to Ilsa,who says,"I'll pay no more than $5,000." Geof says,"Forget it.I changed my mind." Geof's offer was terminated by

A)Geof and Ilsa.
B)Geof.
C)Ilsa.
D)the market prices of similar vehicles.

Question 53

Baked Stuff Company agrees to supply Comida Café with all the corn chips that it re?quires for a year.A sudden blight caused by an organism hitherto unknown in the United States results in a shortage of corn,and the price rises sharply.Baked Stuff asks Comida to pay a higher price for the chips.This request is

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 54

Marco promises to pay his assistant Naomi $10,000 in consideration of the ser?vices she has provided over the years.Marco is

A)liable for payment of the $10,000.
B)liable only if Naomi continues to work for Marco.
C)not liable,because the consideration is past.
D)not liable,because the consideration is unintentional.

Question 55

Fact Pattern 8-2
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 considera?tion for their contract was inadequate.
Refer to Fact Pattern 8-2."Adequacy" of consideration refers to

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 56

Craig decides to sell his Double-C Ranch in an auction "without reserve." If Craig changes his mind at the auction,he can withdraw his property

A)only before the auctioneer announces that the ranch is sold.
B)only before the auctioneer delivers the deed to the buyer.
C)under no circumstances.
D)within thirty days after the auction.

Question 57

Ritzy Property,Inc. ,offers to sell a warehouse to Self-Storage Company.Self-Storage says that it will pay Ritzy $100 to hold the offer open for three business days.This

A)creates an illegal contract by adding a clause to Ritzy's offer.
B)makes the offer irrevocable for three days if Ritzy accepts.
C)negates Ritzy's offer by changing the price term.
D)voids Ritzy's offer by extending the time term.

Question 58

Quix Fix-It,Inc. ,offers Polly a job as a plumber.No time for acceptance is specified in the offer.The offer will terminate

A)after a reasonable period of time.
B)after a typical work week (five business days).
C)after a usual month (thirty calendar days).
D)never.

Question 59

Callie owns two trucks.She offers to sell the Dodge for $20,000 to Evan,who accepts.She offers to sell the Ford for $20,000 to Gwen,who says,"Too much." Callie's offer to Gwen was terminated by

A)Evan and Gwen.
B)Evan only.
C)Gwen only.
D)neither Evan nor Gwen.

Question 60

Fact Pattern 8-1
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 8-1.Eva's forbearance from towing is legally suffi?cient consid?eration

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 61

Fact Pattern 8-2
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 considera?tion for their contract was inadequate.
Refer to Fact Pattern 8-2.If,as Brad claims,the consideration in this problem is inadequate,it may indicate a lack of

A)accord in Brad's satisfaction with the value of the deal.
B)bargained-for exchange or mutual assent.
C)flexibility on the part of College Credit to accommodate Brad's needs.
D)"heft," "substance," or "weight" in the terms of the contract.

Question 62

Milo files a suit against Neighbors Insurance Corporation under the doc?trine of prom?issory estoppel.Milo must show that

A)Milo justifiably refused to fulfill a promise to Neighbors.
B)Milo justifiably relied on Neighbors's promise to his detriment.
C)Neighbors justifiably refused to fulfill a promise to Milo.
D)Neighbors justifiably relied on Milo's promise to its detriment.

Question 63

Fact Pattern 8-3
Dag and Enita are in an auto accident.Dag offers Enita $2,000 if she promises not to pursue her potential legal claim against him.Enita agrees.Later,Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover her medical expenses for a latent injury.
Refer to Fact Pattern 8-3.The agreement between Dag and Enita is

A)a covenant not to sue.
B)an accord and satisfaction.
C)a release.
D)promissory estoppel.

Question 64

Numeric Methods Corporation promises to give stock options to Orin,a project schedule manager,for projects that have already been completed ahead of schedule.This promise is

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 65

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

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

Question 66

Chris promises Dina $40,000 if she graduates from Eastern College.Dina enrolls in Eastern,attends full-time for four years,and graduates.When Dina asks Chris for $40,000,Chris says,"I don't re?member promising you $40,000.But if there was a promise,it's not en?forceable,because we didn't bargain for it.And even if there was a prom?ise that would otherwise be enforceable,I revoke it now." Can Dina en?force Chris's "prom?ise"? Why or why not?

Question 67

Fact Pattern 8-3
Dag and Enita are in an auto accident.Dag offers Enita $2,000 if she promises not to pursue her potential legal claim against him.Enita agrees.Later,Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover her medical expenses for a latent injury.
Refer to Fact Pattern 8-3.In Enita's suit against Dag to recover her re?pair and medical expenses,Enita will most likely recover

A)half the amount to pay those costs over what Dag already paid her.
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.

Question 68

Tom's Terrific Assembly Company promises its employees a 10-percent raise at the end of the year if productivity has increased and manage?ment feels it is warranted.Tom's must

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 69

George and Halle disagree as to the exact amount one owes the other.They form a new agreement that,on fulfillment,will discharge the prior obli?gation.This is

A)a covenant not to sue.
B)an accord and satisfaction.
C)a release.
D)promissory estoppel.

Question 70

Auto Body Repair Shop (ABRS)promises to pay Ben $1,000 a week to work for ABRS.Ben accepts and quits his job with Car Care Service.ABRS fails to provide a job for Ben.Ben has a cause of action based on

A)an illusory promise.
B)a release.
C)past consideration.
D)promissory estoppel.