Question 1

Jeremy agrees not to sue Angela for having crashed into his car if she agrees to pay for his repairs.Since he only promised not to do something which he could have done,he has not given consideration for her promise to pay.

Accepted Answer

A) True 
 B)False

Question 2

Anderson,a city employee,collected garbage along Smyth's street on Thursday of each week.One day Smyth said to Anderson: "You have done such a good job; I will give you $10 when you come by next week." The next week,when Anderson made his regular garbage pickup for the city,he met Smyth and asked for the $10.Smyth refused to pay.Smyth is obliged to pay Anderson the $10,because he promised him the money.

Accepted Answer

A) True 
 B)False

Question 3

A and B are neighbours.Before A left on a holiday,he asked B to "keep an eye on his house." While A was on holidays,B noticed that A's lawn was in need of cutting,and proceeded to cut the lawn.On A's return from his holiday,B demanded $10 for cutting the lawn.A and B have a binding contract for the cutting of the lawn,because A's statement constituted an offer to B to cut the lawn,which B accepted.

Accepted Answer

A) True 
 B)False

Question 4

McSweeney agrees to clear out Brown's basement,but no price is set at the time.Brown argues,once McSweeney has done the work that since no price was agreed upon,he should pay only a reasonable price and not the excessive amount stated in the bill presented to him by McSweeney.He is right.

Accepted Answer

A) True 
 B)False

Question 5

A and B are neighbours.Before A left on a holiday,he asked B to "keep an eye on his house." While A was on holidays,B noticed that A's lawn was in need of cutting,and proceeded to cut the lawn.On A's return from his holiday,B demanded $10 for cutting the lawn.If B should take legal action against A to collect the $10,and the court agreed that he was entitled to recover quantum meruit,he would not necessarily be entitled to the $10,but only to a reasonable price for his services.

Accepted Answer

A) True 
 B)False

Question 6

A and B are neighbours.Before A left on a holiday,he asked B to "keep an eye on his house." While A was on holidays,B noticed that A's lawn was in need of cutting,and proceeded to cut the lawn.On A's return from his holiday,B demanded $10 for cutting the lawn.If B was entitled to claim quantum meruit,and the regular price charged by persons who mow lawns in that area was $10,B would probably be awarded $10 by the court.

Accepted Answer

A) True 
 B)False

Question 7

One afternoon you find a notebook filled with incomprehensible mathematical notations outside the Faculty of Business building and,realizing that it belongs to a professor in the Philosophy Department whose name is on the cover,you put it under the door of his office with a note telling him that you found it.That night,on the eleven o'clock news,you see an interview with the professor who is telling the reporter that he has lost the notebook in which he had worked out the meaning of life,and you hear him offer $10,000 for its safe return.Discuss your legal position in relation to whether or not you can claim the reward if the professor refuses to pay you.

Accepted Answer

The answer of One afternoon you find a notebook filled...

Question 8

Estoppel is defined as a rule whereby a person who has made a promise may later deny the promise when a person relies on the promise to their detriment.

Accepted Answer

A) True 
 B)False

Question 9

X owed Y a debt in the amount of $1,000.The debt was payable on June 1st.If X offered Y the sum of $900 on the due date as payment in full,at Common Law,Y would be entitled to collect the remaining $100 even though he accepted the lesser sum as payment in full on the due date.

Accepted Answer

A) True 
 B)False

Question 10

Metro Auto Parts supplies many garages with auto parts.On its invoice it says that the amount is due in 30 days but will be reduced by 10% if paid within 15 days.Is Metro Auto Parts bound in contract to give its customers the discount if they pay early?

Accepted Answer

A) No,when a creditor agrees to accept a lesser sum than the full amount of the debt on the due date,there is no consideration for the creditor's promise to waive payment of the debt owed. 
B) No,when a creditor agrees to accept a lesser sum than the full amount of the debt prior to the due date,there is consideration for the creditor's promise to waive payment of the debt owed. 
C) Yes,promissory estoppel would apply. 
D) Yes,promissory estoppel does not apply. 
E) No,the invoice would have to be under seal.

Question 11

Cyril owed Robert $12,000 but since he had lost his job,he could only pay $7,000.Reluctantly,Robert agreed,since they were old friends,to accept the lesser amount as full payment of the debt,and Cyril gave him the money.Now Robert has heard that Cyril has just won a huge amount in a lottery but Cyril will not pay him the rest of the debt."A deal's a deal," he says.

Accepted Answer

A) Since Cyril gave no consideration for Robert's promise to forgive the rest of the debt,Robert can successfully sue him for the balance. 
B) While Robert would have been able to sue Cyril under Common Law,statute law says that,having accepted part of the debt as payment for the full amount,Robert cannot now demand the balance. 
C) Whether or not Robert could successfully sue for the balance of the debt,the courts would not allow a debtor to be unjustly enriched in this way and would order Cyril to pay Robert the balance of the debt. 
D) All of the responses are correct. 
E) None of the responses are correct.

Question 12

Consideration is defined as something that has value in the eyes of the law,and which a promisee receives in return for a promise.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following charitable pledges will be sufficient to find consideration on the part of the recipient?

Accepted Answer

A) A $100 pledge made via telephone. 
B) A $100 pledge made via a website. 
C) A $500 pledge made via a mail in response card. 
D) A $4 000 pledge made in a meeting with the recipient. 
E) None of these amounts are sufficient.

Question 14

Charlie looks after Brad's motorcycle shop for a weekend,and,on Brad's return,Brad promised to give Charlie $200 for his kind act.In this case,Charlie's act of looking after Brad's shop was gratuitous and past consideration for Brad's later promise of payment.If Brad fails to pay the $200,no contract exists for Charlie to enforce because no consideration can be shown except the past gratuitous act.

Accepted Answer

A) True 
 B)False

Question 15

A small company,Software Design Limited,was indebted $150,000 to a sole individual,now due.This individual was an investor who was a former classmate of the firm's president,Angela.Owing to a reversal of fortunes for the company,Software Design could now only repay $100,000.With her investor chalking the affair up to experience,Angela intended the firm to repay what it could now,and then she would wind up the company.A few weeks after paying off her creditor at $100,000,but before she could wind up the company,a new investor with both ideas and money approached her,and encouraged Angela to continue on in the business.Once Angela's former classmate heard of the new investor,she demanded the balance due on her loan.Angela briefly considered repaying more,but her new investor demanded a hardline approach.Angela was holding the repaid note in her hands as her later investor said "Neither you nor she could see the future when she agreed to accept $100,000.But accept she did.Business is business."

Accepted Answer

A) Since Software Design gave no consideration for Angela's classmate's promise to forgive the rest of the debt,Angela's classmate can successfully sue the company for the balance. 
B) While Angela's classmate would have been able to sue the firm under Common Law,statute law says that,having accepted part of the debt as payment for the full amount,she cannot now demand the balance. 
C) Whether or not Angela's classmate could successfully sue for the balance of the debt,the courts would not allow a debtor to be unjustly enriched in this way and would order Software Design to repay the balance of the debt. 
D) None of the responses are correct. 
E) All of the responses are correct.

Exam 8: The Requirement of Consideration

Jeremy agrees not to sue Angela for having crashed into his car if she agrees to pay for his repairs.Since he only promised not to do something which he could have done,he has not given consideration for her promise to pay.

McSweeney agrees to clear out Brown's basement,but no price is set at the time.Brown argues,once McSweeney has done the work that since no price was agreed upon,he should pay only a reasonable price and not the excessive amount stated in the bill presented to him by McSweeney.He is right.

Estoppel is defined as a rule whereby a person who has made a promise may later deny the promise when a person relies on the promise to their detriment.

X owed Y a debt in the amount of $1,000.The debt was payable on June 1^st.If X offered Y the sum of $900 on the due date as payment in full,at Common Law,Y would be entitled to collect the remaining $100 even though he accepted the lesser sum as payment in full on the due date.

Metro Auto Parts supplies many garages with auto parts.On its invoice it says that the amount is due in 30 days but will be reduced by 10% if paid within 15 days.Is Metro Auto Parts bound in contract to give its customers the discount if they pay early?

Consideration is defined as something that has value in the eyes of the law,and which a promisee receives in return for a promise.

Which of the following charitable pledges will be sufficient to find consideration on the part of the recipient?