Quiz 5

Question 1

R2 33: certainty

Answer 1

(1) even though a manifestation is intended to be understood as an offer, it cannot form a K unless the terms of the contract are reasonably certain.
(2) terms are reasonably certain if they provide a basis for determining a breach and remedy
(3) The fact that one or more terms of a proposed bargain are left open may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance

Question 2

R2 204: supplying an omitted essential term

Answer 2

When the parties have not agreed on a term which is essential to the determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court

Question 3

R2 71 requirement of exchange

Answer 3

(1) to constitute consideration, performance/promise must be bargained for
(2) bargained for if: each party made their promise/performance (at least in part) seeking the other’s promise/perf in return.
(3) performance may consist of: act, forbearance, altering a legal relation
(4) performances/promises can be given to/from a 3rd party

Question 4

R2 74: settlement of claims

Answer 4

(1) forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless
(a) The claim is doubtful because of uncertainty as to the facts or the law
(b) The surrendering party believes that the claim may be fairly determined to be valid
(2) The execution of a written instrument surrendering a claim by one who is under no duty to execute it is consideration if the execution is bargained for even though he is not asserting the claim and believes that no valid claim exists

Question 5

R2 72: exchange of promise for promise

Answer 5

A promise which is bargained for is consideration if, but only if, the promised performance would be consideration

Question 6

R2 77: illusory promises

Answer 6

A promise is not consideration if by its terms the promisor reserves a choice of alternative performances unless
(a) Each of the alternative performances would have been consideration if it alone had been bargain for or
(b) One of the alternative performances would have been consideration and there is or appears to the parties to be a substantial possibility that before the promisor exercises his choice events may eliminate the alternatives which would not have been consideration

Question 7

R2 79 Adequacy of consideration; mutuality of obligation

Answer 7

If the requirement of consideration is met, there is no additional requirement of
(a) A benefit to the promisor or detriment to the promisee 
(b) equivalence in values exchanged or
(c) “mutuality of obligation”

Question 8

R2 81: consideration as motive/inducing cause

Answer 8

(1) The promisor may have many motives but all that is necessary is that there is an outward manifestation seeking a return promise
(2) all that is necessary is that one reason, at least in part, that the promisee’s promise was made because of the promisor’s promise

Question 9

R2 73: performance of legal duty

Answer 9

Performance of a legal duty owed to a promisor which is neither doubtful nor the subject of honest dispute is not consideration; but a similar performance is consideration if it differs from what was required by the duty in a way which reflects more than a pretense of bargain

Question 10

R2 89: modification of executory K

Answer 10

A promise modifying a duty under a contract not fully performed on either side is binding
(a) If the modification is fair and equitable in view of circumstances not anticipated by the parties when the K was made
(b) or to the extent provided by the statute
(c) Or to the extent that justice requires enforcement in view of material change of position in reliance on the promise

Question 11

UCC 2-209: modification, rescission & waiver

Answer 11

(1) an agreement modifying a contract within this article needs no consideration to be binding
(2) A signed agreement which excludes modification or rescission except by a signed record cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party
(3) The requirements of the statute of frauds section of this article must be satisfied if the contract as modified is within its provisions
(4) Although an attempt at modification does not satisfy the requirement of subsection 2 or 3 it can operate as a waiver
(5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust