business law chapter 12 – Flashcards with Answers

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society enforces all promises in the interests of simple morality
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false
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consideration can be a promise or an act
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true
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agreeing not to open a competing business could be consideration
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true
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The UCC requires consideration for agreements modifying contracts for the sale of goods
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false
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Billy owes a liquidated debt of 3000 to Rayne, his personal weight trainer. Billy sends Rayna a check for $300 on which he has marked, “Payment in full”. If Rayne cashes the check she will NOT be able to successfully due Billy for the remainder of the debt
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false
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Raul agrees to paint Mike’s house for 1,000. Before finishing, Raul states it is too hot to finish, and Mike offers to pay 1,200 if Raul finishes. Mike’s statement that he will pay 1,200 is unenforceable.
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True
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Contracts in which one party agrees to buy all his requirements of certain goods from the other party are generally unenforceable because there is no definite amount
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false
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al illusory promise is not consideration
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true
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contracts generally do not require bargaining that leads to an exchange between parties
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false
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courts normally require adequate consideration
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false
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Section 2-306 of the UCC expressly disallows output contracts in the sale of goods
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false
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Denton agreed to build a cedar deck for the Thrashers for $7000. After he began the work, the Thrashers asked him to add cedar flower boxes at one side. Denton replied he would, but it would cost an additional $600. The Thrashers would not be obligated to pay the additional sum because the original agreement already obligated Denton to complete the deck for $7000
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false
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Pastor Tom was employed by the First Church for 40 years. On Pastor Tom’s retirement there was no adequate pension plan. Two months after the retirement, a wealthy parishioner, in consideration for Pastor Tom’s 40 years of faithful service and for being such a sweet man, promised to pay him $500 per month for the rest of his life. This promise is probably not enforceable.
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true
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Hilda owes Lex $3000, which is an undisputed amount. If she offers him her car in full settlement of the debt and he accepts, the agreement is binding and he can no longer claim she owes him anything on the original debt
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True
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An agreement to pay a lesser amount to settle an unliquidated debt is
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enforceable, as there is consideration
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in the historic case of Hamer v. Sidway, the nephew:
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won, as there WAS consideration
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What phrase is critical to the validity of a requirements contract
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“in good faith”
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Utah court of appeals in the dements v. estate of Tallas’s case found
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the trial court correctly determined that there was no consideration to support Tallas’s promise
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In January, Alex promised to pay Y-K Inc $5000 check from Alex. Which of the following statements is correct
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Y-K’s promise to refrain from suing Alex was supported by legal consideration and is enforceable
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Zero inc agreed to build Millie a storage building for 8,000. After beginning the project Zero realized that it could not complete the job and make a profit. Zero demanded 9,500 to complete the building. Millie agreed to pay the 9,500. When the project was complete, Millie tendered 8,000 to Zero for the job. If Zero sues Millie for the remaining 1,500
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Zero will lose because there was no legal consideration to support the additional 1,500
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an unliquidated debt can be described as
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a debt in which the existence or amount is in dispute
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“I’ll sell you my car if I decide to sell it” is an example of
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an illusory promise
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A promise by Derkin’s Restaurants to buy all of the produce it needs this next year at an established price from Elfredo’s Produce would be an
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enforceable requirements contract
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Bernie owes an undisputed amount to Wilde’s heating and air conditioning. Which of the following is true?
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if wile’s agrees to accept less than the full amount as full payment, the agreement is not binding.
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police Officer Paul apprehends a wanted criminal and then demands the $10,000 reward offered by Crime Stoppers. Which of the following statements is true
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Police officer Paul is not entitled to the reward because he was under a pre-existing duty to make the arrest
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Walter worked night as a clerk in a fast-food store. On his last work shift, Walter’s boss told him “I’m really grateful for the year that you have worked here. I am going to give you bonus of 1,000 in your last paycheck. when Walter got his last paycheck, there was no bonus. If Walter dues, the likely result will be
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Walter will lose, as he gave no consideration
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If Rudy offers Oscar $200 for his $600 stereo and Oscar agrees, a court will probably
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not set aside the agreement based on the adequacy of of the consideration
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Jamie is building a new house on her lot. She invites Earnie of Earnie’s Excavation to bid on the excavation job. Earnie observe that the lot next to Jaime’s is also under excavation and the soil in that lot is normal and not excessively rocky. Based on the assumption that the soil in Jamie’s lot will be similar, he and Jaime agree that the excavation will cost $3,000. When Earnie starts digging, he learns that there is solid rock under Jamie’s lot. Earnie says it will cost an extra $2,500 for the excavation work. Jaime agrees just to get the job done but later refuses to pay a dime more than 3,000. If Earnier sues, the most likely result would be
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Earnie wins, as the modification was due to unseen difficulties
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If Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben’s promise of $1,000, the agreement is
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not enforceable because Becky does not have a legal right to drink alcohol
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Upon college grad, Kathy announced her plans to attend law school the following fall and to marry Rick in December. Kathy’s father was afraid that marriage during her first year in law school might cause her to fall behind in her studies or cause her to drop out. He promised her 10,000 is she postponed her wedding until completing her first year of law school, but soon thereafter, Kathy’s father died. The administrator of her father’s estate claimed she was not entitled to the $10,000 because there was no consideration of her father’s death. If Kathy sues the estate,
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She will be successful, as there was no consideration
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Under the union commercial code (UCC), an agreement modifying a contract
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may not require consideration
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Mary owes $3,800 on her credit card. She sends the credit card company a check for $800 with the notation “payment in full” on the check. If the credit card issuer cashes the check:
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The check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks
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If Crosby and Dash are in disagreement as to the exact amount of money that Crosby owes Dash, then they may choose to form a new agreement at a set amount. If they both perform the new agreement, their conduct would be an example of
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an accord and satisfaction
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An agreement in which a buyer agrees to buy all the goods produced by a manufacturer is known as
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an output contract
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The Plaza hotel contracts with EZ lawn to have EZ mow the grass on the Plaza ground for the next 10 years. However there is a clause in the contract that states if the hotel closes, the contract may be terminated provided Plaza pays EZ $2,000 on termination. Which of the following is correct?
answer

The contract is enforceable because the option to cancel clause is supported by consideration
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Mid-American Oil had a contract with NSB company to supply 1,000 gallons of oil by September 1. The contract contained a provision which required all modifications to be written and signed by the company presidents. In early August, an executive of Mod-American talked with the purchasing agent of NSB who orally agreed to two shipments of oil; one in September and the second one in December. By September 30, when only 500 gallons had been delivered, NSB sued. The likely outcome of this lawsuit is
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NSB wins because the modification has to be in writing
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Bailey C and Spryt Bros enter in a contract for the manufacture and sale of 400 lawn chairs. If both parties agree that a modification is necessary:
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An agreement to rescind the contract will terminate the contractual rights of Bailey Co and Spryt if neither of them had completed their obligations
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Marco agrees to sell Clowns R Us some balloons. The contract states that Clowns maybe as many balloons as it wishes. This agreement is
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An illusory contract
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The Kelsoe v. International Wood Products Inc case was an example of
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lack of consideration
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The Kelsoe v. International Wood Products Inc case was an example of
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lack of consideration
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The Kelsoe v. International Wood Products Inc case was an example of
answer

lack of consideration

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