Ch.12 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. Consideration can be either an act or a promise.    (5 points)

      
      

  2. Consideration is an act or a promise that involves either doing something one had no prior legal duty to do, and refraining from something one had a legal right to do.    (5 points)

      
      

  3. A promise to refrain from smoking is not consideration because it does not convey anything of economic value to the other party.    (5 points)

      
      

  4. In return for services B performed for A in the past, A promises to pay B $1000. There is no consideration for A's promise.    (5 points)

      
      

  5. A promises to pay B $100 per week, in exchange for B's promise not to beat A up. There is no consideration for A's promise.    (5 points)

      
      

  6. A and B contracted for A to mow B's lawn once a week for 20 weeks, at a price of $20 per week. Later, without terminating the first contract, the parties modify the contract as follows: A will mow B's lawn in exactly the same way for exactly the same time period, in exchange for B's promise to pay A $22 per week. There is no consideration for B's promise.    (5 points)

      
      

  7. A liquidated debt is a debt that has been fully paid.    (5 points)

      
      

  8. A promise not to sue another party is not consideration, because the promise does not convey any legal value to the other party.    (5 points)

      
      

  9. In many states, a debtor's written promise to pay a debt the enforcement of which is barred by the statute of limitations, is a binding promise that the courts will enforce. This is true even though the creditor does not give the debtor any new consideration for the promise.    (5 points)

      
      

  10. If the elements of promissory estoppel are established, a promise is binding even though there is no consideration for that promise.    (5 points)

      
      

  11. Dad promises to pay Junior $100,000, in exchange for Junior's promise to refrain from smoking until he reaches the age of 21. This agreement is:    (5 points)

    a.  
    b.  
    c.  
    d.  

  12. X and Y have a contract which obligated X to sell Y 100 boxes of screws for $100. The parties orally modify the contract so that X will sell Y the same 100 boxes of screws for $125. The second agreement:    (5 points)

    a.  
    b.  
    c.  
    d.  

  13. A and B have a written contract whereby A agrees to sell B a plot of land for $100,000. Later, without terminating the first contract, the parties modify the deal so that A sells B the same plot of land for $125,000. The second agreement:    (5 points)

    a.  
    b.  
    c.  
    d.  

  14. A and B agree that A will sell B all B's requirements of coal at a stated price per ton. This agreement:    (5 points)

    a.  
    b.  
    c.  
    d.  

  15. X and Y contract for X to build Y a house for $150,000. Later, without terminating the first contract, X and Y modify that contract so that Y will pay X $175,000. In return, X promises to build exactly the same house, but one day earlier than in the previous contract. Assume that all the other elements of a contract besides consideration are present; this is a consideration question. This second contract:    (5 points)

    a.  
    b.  
    c.  
    d.  

  16. D owes C a debt the amount of which is subject to a good faith dispute. The parties agree to settle the debt, with D promising to pay C $15,000 and C promising to release D on the $25,000 debt. The settlement agreement:    (5 points)

    a.  
    b.  
    c.  
    d.  

  17. Employer promises to pay Retiree a $10,000 per year pension for the remainder of Retiree's life in return for Retiree's promise to pay Employer $1 per year. Retiree foreseeably relies on the promise by taking out a mortgage on a small vacation home. Later Employer, who never intended to pay the pension, unfairly reneges on his promise. Employer's promise:    (5 points)

    a.  
    b.  
    c.  
    d.  

  18. In which of the following circumstances is a debt settlement not a binding contract?    (5 points)

    a.  
    b.  
    c.  
    d.  

  19. Which of the following is an exception to the consideration requirement?    (5 points)

    a.  
    b.  
    c.  
    d.  

  20. Which of the following is a true illusory promise?    (5 points)

    a.  
    b.  
    c.  
    d.  



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