Chapter 13 BUS 315

question

In contract law, the term consideration refers to the serious thought that underlies a party’s intent to enter into a contract.
answer

False
question

If a promise is made, it can be enforced.
answer

False
question

To be legally sufficient, consideration must be evidenced by something tangible
answer

False
question

A determination of whether consideration exists depends on a comparison of the values of the things exchanged.
answer

False
question

The element of bargained-for exchange distinguishes contracts from gifts.
answer

True
question

A promise to do what one already has a legal duty to do constitutes legally sufficient consideration
answer

False
question

Essentially, adequacy of consideration concerns the fairness of the bargain
answer

True
question

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

False
question

A court is not likely to allow an exception to the preexisting duty rule even if extraordinary difficulties arise that were totally unforeseen at the time a contract was formed
answer

False
question

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

False
question

An obligation is enforceable only if it is made in return for actions or events that have already taken place.
answer

False
question

Even if the terms of a contract express such certainty of performance that the promisor has not definitely promised to do anything, the promise binds the promisor.
answer

False
question

For accord and satisfaction to occur, the amount of the debt cannot be in dispute.
answer

False
question

A release bars any further recovery beyond the terms stated in the release.
answer

True
question

In many states, a release contract must be in a signed writing.
answer

True
question

There can be no satisfaction unless there is first an accord.
answer

True
question

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

True
question

Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration.
answer

False
question

For the doctrine of promissory estoppel to be applied, there must be a clear and definite promise.
answer

True
question

Statutes of limitations in all states require a debtor to pay a debt within a specified period of time.
answer

True
question

Chicken & Egg Farms promises to pay Dex $500 to install a sump pump in its warehouse. Dex com¬pletes the installation. The act of installing the pump a. imposes a moral obligation on Chicken & Egg to pay Dex. b. imposes no obligation on Chicken & Egg unless it is satisfied with the job. c. is not sufficient consideration because it is not goods or money. d. is the consideration that creates Chicken & Egg’s obligation to pay Dex.
answer

C
question

Henry promises not to open his Hank’s Lunchbox CafĂ© before 10:00 A.M. if Isis, who owns Isis’s Danish & Donuts next door, promises to close by 4:00 P.M. Henry’s consideration is a. the destruction of a legal relationship. b. the creation of a legal relationship. c. a forbearance. d. an exchange of money.
answer

C
question

Esmeralda promises to pay Fiorello $400 because “he does not have as much money as other people.” Esmeralda’s promise is not enforceable because a. society does not want gifts cheapened by making them legally enforceable. b. the redistribution of wealth on a one-to-one basis is not a valid social goal. c. Esmeralda could have paid more. d. Fiorello has not given consideration in return.
answer

D
question

Quentin questions whether there is consideration for his contract with Rainey to exchange his performance with the Symphonic Saxophone Sextet for her payment of a certain amount. To constitute consideration, there must be a. a payment. b. a performance. c. a bargained-for exchange. d. serious thought underlying each party’s intent to contract.
answer

C
question

Valley Paragliders Association files a suit against Wing Designers, Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the considera¬tion if 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.
answer

C
question

Mobile Minutes Company offers Nate an unlimited number of monthly phone minutes for $4.50 per month. Nate ac¬cepts. If a dispute arises, a court would likely a. enforce the deal after questioning the adequacy of the consideration. b. not question the adequacy of the consideration. c. rewrite the deal after questioning the adequacy of the consideration. d. set aside the deal after questioning the adequacy of the consideration.
answer

B
question

Genovese Contracting, Inc., agrees to build a warehouse for Hawthorne Wholesale Distributors. When Genovese runs into the types of difficulties that contrac¬tors ordinarily confront, Hawthorne agrees to pay extra compensation to over¬come them. Regarding the agreement to pay more, a court would likely a. enforce it. b. rescind it. c. order the parties to renegotiate it. d. not enforce it.
answer

D
question

Todos, Ltd., agrees to market the products of United Sales, Inc., in Venezuela. When the gov¬ern¬ment is unexpectedly overthrown in a revolution, Todos can continue to fulfill its contract but only for a much higher price. United agrees to pay but later files a suit to recover the difference. The court will most likely rule that a. a change in government is a risk ordinarily assumed in business. b. an unforeseen difficulty supported the contract modification here. c. Todos engaged in extortion or the so-called holdup game. d. Todos had a preexisting duty to supply the goods at the initial price.
answer

B
question

Quik Downtown Delivery contracts with Rico’s Tacos to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract. B9. Refer to Fact Pattern 13-B1. The next day, Quik again offers to deliver Rico’s products. Rico’s is willing to deal, but for a new price. Quik and Rico’s a. may agree to a new contract, but it cannot include a new price. b. may agree to a new contract that includes the new price. c. must perform their original contract. d. must perform the part of their original contract that is executory.
answer

B
question

Refer to Fact Pattern 13-B1. Quik and Rico’s a. may rescind their entire contract. b. may rescind their contract to the extent that it is executory. c. must perform their entire contract. d. must perform the part of their contract that is executory.
answer

B
question

Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable a. because it is a new contract. b. because it is an illusory promise. c. because it is supported by past consideration. d. under no circumstances.
answer

D
question

Dave’s uncle tells Dave that if “he feels that Dave deserves it,” he will give Dave $10,000 when Dave graduates from college. Dave’s uncle’s promise is a. illusory. b. a contract. c. a forbearance. d. a preexisting duty.
answer

A
question

Produce Packaging Company promises its employees a 10 percent raise at the end of the year if productivity has increased and management feels the raise is warranted. Produce Packaging 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.
answer

A
question

Apples & Pears Orchards contracts to hire Brigit for one year to tend the fruit in its commercial orchards but reserves the right to cancel the employment on thirty days’ notice at any time after Brigit begins work. This promise is a. enforceable. b. illusory. c. unliquidated. d. unforeseen.
answer

A
question

Qiana writes a check to Payday Loans, Inc., in an amount that represents half of her debt to the lender. On the back of the check, Qiana includes the words “payment in full.” Payday agrees to accept the lesser sum and 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.
answer

C
question

While sailboarding, Jolene is injured when Kilroy carelessly crosses her path. Kilroy’s insurance company offers Jolene $50,000 to release Kilroy from liability, and she accepts. Later, she learns that her injuries are more serious than she realized. The release is a. enforceable. b. unenforceable because Jolene’s injuries are unforeseeably difficult. c. unenforceable because Kilroy has a preexisting duty to pay. d. unenforceable because the release is an illusory promise.
answer

A
question

Gustaf and Hilltop Country Club disagree as to the exact amount Hilltop owes Gustaf for his landscaping work. 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.
answer

B
question

After an accident with a vehicle licensed to Guardian Security Company, Heidi signs a covenant not to sue Guardian Security for damages in a tort action if it pays for the damage to her car. This covenant is a. a bar to recovery only if Guardian Security pays. b. an illusory contract. c. barred by the preexisting duty rule. d. barred by the doctrine of promissory estoppel.
answer

A
question

Rudy files a suit against Shakes & Shingles, Roofing Contractor, Inc., under the doctrine of prom¬issory estoppel. Rudy must show that a. he justifiably refused to fulfill a promise to Shakes & Shingles. b. he justifiably relied on Shakes & Shingles’ promise to his detriment. c. Shakes & Shingles justifiably refused to fulfill a promise to him. d. Shakes & Shingles justifiably relied on his promise to its detriment.
answer

B
question

Readymade Credit Company loans Start-Up Enterprise, Inc., $150,000 to invest in new equipment. If Start-Up fails to pay the loan within a specified period, Readymade’s recovery of the debt will be barred by a. the preexisting duty rule. b. the doctrine of promissory estoppel. c. a statute of limitations. d. none of the choices.
answer

D

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