FIN 240 Ch.13 – Flashcards
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In contract law, the term consideration refers to the serious thought that underlies a party's intent to enter into a contract
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False
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If a promise is made, it can be enforced
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False
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To be legally sufficient, consideration must be evidence by something tangible
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False
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A determination of whether consideration exists depends on a comparison of the values of the things exchanged
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False
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The element of bargained-for exchange distinguishes contracts from gifts
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True
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A promise to do what one already has a legal duty to do constitutes legally sufficient consideration
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False
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Essentially, adequacy of consideration concerns the fairness of the bargain
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True
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Risks ordinarily assumed in business constitute consideration for the modification of a contract
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False
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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
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False
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Rescission is the substitution of one party to a party to a contract for a third party, who agrees to assume the contractual duties
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False
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An obligation is enforceable only if it is made in return for actions or events that have already taken place
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False
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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
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False
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For accord and satisfaction to occur, the amount of the debt cannot be in dispute
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False
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A release bars any further recovery beyond the terms stated in the released
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True
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In many states, a release contract must be in a signed writing
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True
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There can be no satisfaction unless there is first an accord
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True
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A covenant not to sue does not always bar further recovery
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True
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Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration
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False
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For the doctrine of promissory estoppel to be applied, there must be a clear and definite promise
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True
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Statutes of limitations, in all states require a debtor to pay a debt within a specified period of time
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True
