Flashcards in Consideration Deck (40):
True/False: Society enforces all promises in the interests of simple morality.
True/False: Consideration can be a promise or an act.
True/False: Agreeing not to open a competing business could be consideration.
True/False: The UCC requires consideration for agreements modifying contracts for the sale of goods.
True/False: Billy owes a liquidated debt of $3000 to Rayna, his personal weight trainer. Billy sends Rayna a check for $300 on which he has marked, "Payment in Full." If Rayna cashes the check she will not be able to successfully sue Billy for the remainder of the debt.
True/False: Boris sky dives out of a plane and gets hung up in a tree, hopelessly suspended and swinging precariously in his parachute from the branches of the tree. Natasha sees that he is in trouble and comes to his rescue. Once Boris is safely on the ground, he gratefully promises to give Natasha half of his life savings account. When he changes his mind, Natasha will probably be unsuccessful in enforcing his promise.
True/False: 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.
True/False: 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.
True/False: An illusory promise is not consideration.
True/False: Contracts generally do not require bargaining that leads to an exchange between the parties.
True/False: Courts normally require adequate consideration.
True/False: Section 2-306 of the UCC expressly disallows output contracts in the sale of goods.
True/False: Denton agreed to build a cedar deck for the Thrashers for $7,000. 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 $7,000.
True/False: 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 probably is not enforceable.
True/False: Hilda owes Lex $3,000, 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.
An agreement to pay a lesser amount to settle an unliquidated debt is:
ENFORCEABLE, AS THERE IS CONSIDERATION
In the historic case of Hamer v. Sidway, the nephew:
WON, AS THERE WAS CONSIDERATION
What phrase is critical to the validity of a requirements contract?
‘IN GOOD FAITH’
The Utah Court of Appeals in the Dementas v. Estate of Tallas case found:
THE TRIAL COURT CORRECTLY DETERMINED THAT THERE WAS NO CONSIDERATION TO SUPPORT TALLAS’S PROMISE
In January, Alex promised to pay Y-K Inc. $5,000 if it would refrain from filing suit against him on a breach of contract action. Y-K agreed and accepted a $5,000 check from Alex. Which of the following statements is correct?
Y-K’S PROMISE TO REFRAIN FROM SUING ALEX WAS SUPPORTED BY LEGAL CONSIDERATION AND IS ENFORCEABLE
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:
ZERO WILL LOSE B/C THERE WAS NO LEGAL CONSIDERATION TO SUPPORT THE ADDITIONAL 1,500
An unliquidated debt can be described as:
A DEBT IN WHICH THE EXISTENCE OR AMOUNT IS IN DISPUTE
"I'll sell you my car if I decide to sell it" is an example of:
AN ILLUSORY PROMISE
A promise by Derkin Restaurants to buy all of the produce it needs this next year at an established price from Elfredo's Produce would be an:
ENFORCEABLE REQUIREMENTS CONTRACT
Bernie owes an undisputed amount to Wilde’s Heating & Air Conditioning. Which of the following is true?
IF WILDE’S AGREES TO ACCEPT LESS THAN THE FULL AMOUNT AS FULL PAYMENT, THE AGREEMENT IS NOT BINDING
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?
OFFICER IS NOT ENTITLED TO THE REWARD B/C HE WAS UNDER A PRE-EXISTING DUTY TO MAKE THE ARREST
Walter worked nights 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 a bonus of $1,000 in your last paycheck." When Walter got his last paycheck, there was no bonus. If Walter sues, the likely result will be:
WALTER WILL LOSE, AS HE GAVE NO CONSIDERATION
If Rudy offers Oscar $200 for his $600 stereo and Oscar agrees, a court will probably:
NOT SET ASIDE THE AGREEMENT BASED ON THE ADEQUACY OF THE CONSIDERATION
Jamie is building a new house on her lot. She invites Earnie of Earnie's Excavation to bid on the excavation job. Earnie observes that the lot next to Jamie'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 Jamie agree that the excavation will cost $3,000. When Earnie starts digging, he learns there is solid rock under Jamie's lot. Earnie says it will cost an extra $2,500 for the excavation work. Jamie agrees just to get the job done but later refuses to pay a dime more than $3,000. If Earnie sues, the most likely result would be:
EARNIE WINS AS THE MODIFICATION WAS DUE TO UNFORESEEN DIFFICULTIES
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:
NOT ENFORCEABLE B/C BECKY DOES NOT HAVE A LEGAL RIGHT TO DRINK ALCOHOL
Upon graduating from college, Kathy announced her plans to enter 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 of school. He called Kathy and promised her $10,000 if she postponed her wedding until after completion of her first year of law school. Kathy agreed and postponed the wedding for a year. Kathy successfully completed 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 for her father's promise. If Kathy sues the estate, she will probably be:
SUCCESSFUL, AS THERE WAS CONSIDERATION
Under the Uniform Commercial Code, an agreement modifying a contract:
MAY NOT REQUIRE CONSIDERATION
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:
THE CHECK MAY BE SUBJECT TO A UCC EXCEPTION TO THE GENERAL RULES FOR ACCORD AND SATISFACTION CASES INVOLVING CHECKS
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:
AN ACCORD AND SATISFACTION
An agreement in which a buyer agrees to buy all the goods produced by a manufacturer is known as:
AN OUTPUT CONTRACT
The Plaza Hotel contracts with EZ Lawn to have EZ mow the grass on the Plaza grounds for the next 10 years. However, there is a clause in the contract that states if the hotel chooses, the contract may be terminated provided Plaza pays EZ $2,000 on termination. Which of the following is correct?
THE CONTRACT IS ENFORCEABLE B/C THE OPTION TO CANCEL CLAUSE IS SUPPORTED BY CONSIDERATION
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 Mid-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:
NSB WINS B/C THE MODIFICATION HAS TO BE IN WRITING
Bailey Co. and Spryt Bros. enter into a contract for the manufacture and sale of 400 lawn chairs. If both parties agree that a modification is necessary:
AN AGREEMENT TO RESCIND THE CONTRACT WILL TERMINATE THE CONTRACTUAL RIGHTS OF BAILEY CO. AND SPRYT BROS IF NEITHER OF THEM HAD COMPLETED THEIR OBLIGATIONS
Marco agrees to sell Clowns R Us some balloons. The contract states that Clowns may buy as many balloons as it wishes. This agreement is:
AN ILLUSORY CONTRACT