Question 1

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey​

Accepted Answer

A)   ​none of the choices.
B)   ​$5,000, but not the goods.
C)   ​the goods but not $5,000.
D)   ​the goods and $5,000. B

Question 2

If an illegal contract is executory, either party can always enforce it.​

Accepted Answer

A) True 
 B)False  False

Question 3

Geri is a minor. Without her parents' knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri's parents are liable for​

Accepted Answer

A)   ​the entire price of the ticket.
B)   ​no part of the price of the ticket.
C)   ​up to half of the price of the ticket.
D)   ​up to two-thirds of the price of the ticket. B

Question 4

Desi's Uncle Eduardo tells Desi, "If I feel you deserve it at the time, I will give you a new car when you graduate from college." This promise​

Accepted Answer

A)   ​is illusory.
B)   ​is enforceable.
C)   ​relies on forbearance.
D)   ​consists of a preexisting duty.

Question 5

The courts are usually not concerned if one of the wrongdoers in an illegal contract is unjustly enriched at the expense of the other.​

Accepted Answer

A) True 
 B)False

Question 6

A contract involving an unlicensed practitioner is generally illegal and unenforceable.​

Accepted Answer

A) True 
 B)False

Question 7

Ross promises to pay Sara, his niece, $5,000 if she obtains her degree at Tech University, where she is in her third year. Sara graduates. Ross is​

Accepted Answer

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

Question 8

Risks ordinarily assumed in business constitute consideration for the modification of a contract.​

Accepted Answer

A) True 
 B)False

Question 9

Fact Pattern 9-1
Sports Bar & Grill and Tea & Tarts Bakery are adjacent businesses with adjoining parking lots. Sports Bar offers Tea & Tarts a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot.
​
-Refer to Fact Pattern 9-1. Tea & Tarts's forbearance from towing is legally sufficient consideration​

Accepted Answer

A)   ​because it is a promise of something of value.
B)   ​only if Sports Bar's patrons park in Tea & Tarts's lot.
C)   ​only if Tea & Tarts's customers cannot park in its lot because it is full.
D)   ​under no circumstances.

Question 10

Legal sufficiency of consideration is the same as adequacy of consideration. ​

Accepted Answer

A) True 
 B)False

Question 11

Performance can constitute the consideration that creates a contractual obligation.​

Accepted Answer

A) True 
 B)False

Question 12

Rose questions whether there is consideration for her contract to perform with Saxophone Symphony. To constitute consideration, there must be​

Accepted Answer

A)   ​a payment.
B)   ​a performance.
C)   ​a bargained-for exchange.
D)   ​serious thought underlying each party's intent to contract.

Question 13

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump​

Accepted Answer

A)   ​imposes a moral obligation on Kim to pay Leo.
B)   ​imposes no obligation on Kim unless she is satisfied with the job.
C)   ​is not sufficient consideration because it is not goods or money.
D)   ​is the consideration that creates Kim's obligation to pay Leo.

Question 14

Chet, a minor, signs a contract with Denise, an adult. The contract is voidable at the option of​

Accepted Answer

A)   ​neither party.
B)   ​Chet only.
C)   ​either party.
D)   ​Denise only.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

If a minor disaffirms a contract, he or she must disaffirm the entire contract.​

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Executed contracts are presumed ratified.​

Accepted Answer

A) True 
 B)False

Question 19

Pi in the Sky Aircraft Inc. files a suit against Quest Engineering Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if​

Accepted Answer

A)   ​there is a large disparity in the amount of consideration exchanged.
B)   ​the consideration involves the performance of services.
C)   ​something of value passed between the parties.
D)   ​the consideration is worth less than $100.

Question 20

Twyla's dock is damaged in a boating accident caused by Ulrich's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulrich fails to pay, Twyla can bring an action for breach of contract. This is​

Accepted Answer

A)   ​a covenant not to sue.
B)   ​an illusory promise.
C)   ​an unforeseen difficulty.
D)   ​a release.

Exam 9: Consideration, Capacity, and Legality

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey​

If an illegal contract is executory, either party can always enforce it.​

Geri is a minor. Without her parents' knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri's parents are liable for​

Desi's Uncle Eduardo tells Desi, "If I feel you deserve it at the time, I will give you a new car when you graduate from college." This promise​

The courts are usually not concerned if one of the wrongdoers in an illegal contract is unjustly enriched at the expense of the other.​

A contract involving an unlicensed practitioner is generally illegal and unenforceable.​

Ross promises to pay Sara, his niece, $5,000 if she obtains her degree at Tech University, where she is in her third year. Sara graduates. Ross is​

Risks ordinarily assumed in business constitute consideration for the modification of a contract.​

Legal sufficiency of consideration is the same as adequacy of consideration. ​

Performance can constitute the consideration that creates a contractual obligation.​

Rose questions whether there is consideration for her contract to perform with Saxophone Symphony. To constitute consideration, there must be​

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump​

Chet, a minor, signs a contract with Denise, an adult. The contract is voidable at the option of​

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

If a minor disaffirms a contract, he or she must disaffirm the entire contract.​

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

Executed contracts are presumed ratified.​

Pi in the Sky Aircraft Inc. files a suit against Quest Engineering Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if​

Twyla's dock is damaged in a boating accident caused by Ulrich's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulrich fails to pay, Twyla can bring an action for breach of contract. This is​

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey

If an illegal contract is executory, either party can always enforce it.

Geri is a minor. Without her parents' knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri's parents are liable for

Desi's Uncle Eduardo tells Desi, "If I feel you deserve it at the time, I will give you a new car when you graduate from college." This promise

The courts are usually not concerned if one of the wrongdoers in an illegal contract is unjustly enriched at the expense of the other.

A contract involving an unlicensed practitioner is generally illegal and unenforceable.

Ross promises to pay Sara, his niece, $5,000 if she obtains her degree at Tech University, where she is in her third year. Sara graduates. Ross is

Risks ordinarily assumed in business constitute consideration for the modification of a contract.

Legal sufficiency of consideration is the same as adequacy of consideration.

Performance can constitute the consideration that creates a contractual obligation.

Rose questions whether there is consideration for her contract to perform with Saxophone Symphony. To constitute consideration, there must be

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump

Chet, a minor, signs a contract with Denise, an adult. The contract is voidable at the option of

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

If a minor disaffirms a contract, he or she must disaffirm the entire contract.

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

Executed contracts are presumed ratified.

Pi in the Sky Aircraft Inc. files a suit against Quest Engineering Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if

Twyla's dock is damaged in a boating accident caused by Ulrich's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulrich fails to pay, Twyla can bring an action for breach of contract. This is