Q&A Hero

Q: Explain an illusory promise and provide an example.

Q: Explain with an example how promissory estoppel affects consideration?

Q: If either party entering a contract lacks the capacity to contract, the contract is void or voidable.

Q: Abel had grown tired of working on the family farm and was considering moving away. However, his parents told him "If you'll stay and help us, we'll leave you the farm when we die." As a result, Abel decided to stay on the farm and worked there for the next twenty years. However, when his parents finally died Abel learned that they had left the farm to his brother, Mark. Abel filed suit against his parents' estate to enforce their promise of leaving him the farm. Which of the following is a true statement? A. Abel gave no consideration for his parents' promise to leave him the farm, so their promise is not enforceable against the estate. B. The work that Abel did on the farm before his parents made their promise is sufficient consideration to make their promise enforceable. C. Abel's parents' promise is not enforceable because it was illusory. D. Abel's parents' promise is enforceable under a promissory estoppel theory.

Q: Which of the following, used to enforce promises, is supported by consideration? A. Illusory promise B. Preexisting duty C. Charitable subscriptions D. Past consideration

Q: Watten Construction contracted to build the Sillimans a house for $50,000. When Watten began digging the foundation, it hit bedrock, which was highly unusual in that area. Watten told the Sillimans that he required an extra $5000 to build the house. The Sillimans agreed, but when the house was done, refused to pay Watten any more than the original contract price. What can be the outcome if Watten sues the Sillimans for the extra $5000 and why?

Q: Explain the difference between a liquidated and an unliquidated debt.

Q: Explain forbearance to sue in relation to consideration.

Q: Composition agreements are: A. made in a way that allows the promisor to decide whether or not to perform the promise. B. agreements between a debtor and two or more creditors who agree to accept a stated percentage of their liquidated claims against the debtor at or after the due date. C. agreements entered into when someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration. D. agreements between a debtor and a creditor who agree to accept a stated percentage of their liquidated claims against the debtor after the due date.

Q: Forbearance occurs when: A. a debtor and two or more creditors agree to accept a stated percentage of their liquidated claims against the debtor. B. someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration. C. promises are worded in a way that allows the promisor to decide whether or not to perform the promise. D. there is no dispute about the existence or the amount of the debt.

Q: According to the rule of _____ if a promisee's performance was rendered before the promisor's promise was made, then it can never serve as consideration, even though it may meet the "legal value" part of the test. A. past consideration B. preexisting duty C. forbearance D. promissory estoppel

Q: Past consideration is sometimes accepted for ____. A. official duties B. for legal obligations C. moral obligations D. charitable donations

Q: Which of the following is worded in a way that allows the promisor to decide whether or not to perform the promise? A. Novations B. Compositions C. Illusory promises D. Modifications

Q: An unliquidated debt is defined as: A. one that has not been paid in full. B. one that involves an honest dispute about the existence or amount of the debt. C. one that is unenforceable due to lack of consideration. D. one that is due and certain with no dispute about the existence or the amount of the debt.

Q: If the amount of a debt is "due and certain": A. a promise to pay less than the amount lacks consideration. B. the debt is considered to be an unliquidated debt. C. there is a dispute about the existence of the debt. D. a promise to pay more than the amount lacks consideration.

Q: Which of the following statements is true about unliquidated debts? A. The amount being due and certain, a promise to pay less lacks consideration. B. Some courts allow collection of the remainder if checks marked "payment in full" are cashed without reservation. C. Since the amount is genuinely in dispute, an agreement resulting in accord and satisfaction is enforceable. D. Composition agreements are an exception to unliquidated debts and can be enforced without additional consideration.

Q: _____ is the legal term for settling a disputed claim. A. Accord and satisfaction B. Forbearance C. Compositions D. Promissory estoppel

Q: Randy asked Carl to detail his brand-new sports car by painting flames on the side of the vehicle. After the parties signed a contract and after Carl had already started to paint, Randy decided that he wanted Carl to also install a new stereo system in the car. Carl sued Randy for modifying the existing contract without any prior intimation; but he lost the lawsuit because: A. Randy's act was unenforceable for lack of consideration. B. Randy's promise was enforceable. C. The old contract automatically got cancelled with the addition of a new condition. D. Carl's act was not a preexisting duty and hence of no legal value.

Q: When a contracting party runs into unforeseeable difficulties that make his/her performance impossible, courts will: A. not enforce a modification that is not supported by new consideration. B. prosecute the contracting party on criminal charges. C. enforce a modification in the interest of fairness. D. will make the contracting party pay up in full.

Q: Under section 2-209 of the UCC, agreements to modify existing contracts for the sale of goods: A. need new consideration to be binding. B. need no new consideration to be binding. C. require parties to formally terminate their original agreement and start over. D. requires just an informal agreement to be enforced.

Q: Under the UCC, if the original agreement requires any modification to be in writing, an oral modification is: A. unenforceable. B. enforceable. C. enforceable if the value of the goods exceeds $500. D. unenforceable if the value of the goods exceeds $200.

Q: Which of the following statements is true about the modification of an existing contract under the UCC? A. It regards all contractual duties as preexisting duties. B. If new consideration is provided to support a modification, it is unenforceable. C. A promise to alter an existing contract for sale of goods is enforceable. D. Unforeseeable difficulties that made performance impossible or highly impractical can make promise unenforceable.

Q: On January 1, 2006 Bev owed $5,000 on her car loan. The loan was due in May 2006. On January 1, 2006, Bev sent the lender a check for $4,000 marked "in full payment" of the loan. The lender cashes the check. Under these circumstances: A. the lender can sue Bev for $1,000. B. the lender has not promised to accept the payment as "payment in full." C. Bev can avoid paying the $1,000. D. Bev has not given consideration.

Q: If a professor charges extra fees to take a regularly scheduled class, it would not be taken as a consideration because: A. such an act is prohibited by promissory estoppels. B. such an act would violate the preexisting duty rule. C. you have already paid your tuition fee which also includes the test fee. D. such an act is a tort.

Q: Shoddy Roofing Company agrees to do the roofing on a building owned by Tacky Construction Company for $50,000. One week after Shoddy finishes work, over 20% of the shingles fall off due to improper installation. Tacky promises Shoddy an additional $10,000 to reinstall the fallen shingles, and Shoddy does so. Then Tacky refuses to pay Shoddy more than $50,000 for the work. Identify the true statement with regard to this situation. A. Shoddy is not entitled to any more than $50,000 for its work. B. Tacky owes Shoddy the additional $10,000. C. Shoddy would still be entitled only to $50,000 if the shingles had fallen off due to an unforeseeable earthquake hitting the building. D. Shoddy would still be entitled only to $50,000 if the parties had voluntarily cancelled their original contract and entered a new one for $60,000.

Q: On October 29, 1989, Al Glitz agrees to paint Georgia's house during the Thanksgiving week for $4,000 in exchange for Georgia's promise to pay him $4,000 in cash immediately upon completion of the work. Which of the following statements is true with regard to this case? A. Georgia could hire another painter on October 31 without legal liability to Al because until he has painted the house, he has not given any consideration for Georgia's promise to hire him. B. Al could back out of the deal on October 31 without legal liability to Georgia because she has not given any consideration for Al's promise to do the work until she pays him. C. Both parties are bound on October 29 because each has given consideration for the other's promise, and neither may back out without legal liability. D. Al could back out of the deal on October 29 without legal liability if he could prove that $4,000 was inadequate consideration to paint Georgia's house.

Q: In general, performing a preexisting duty: A. is consideration. B. is not consideration. C. is consideration only if the preexisting duty is substantial. D. does not involve contractual duties.

Q: Polly promises to pay city council member Smith $500 to show up for the weekly council meetings. Polly's promise is: A. supported by consideration. B. wholly enforceable. C. not supported by consideration. D. supported by conditional consideration.

Q: Which of the following is true about preexisting duty? A. Agreeing to perform a preexisting duty is consideration. B. A promisor's promise not to commit a crime is consideration. C. Promises by public officials to perform official duties are consideration. D. Performing a preexisting duty is not consideration.

Q: Gregg Biglieri moves into a tough Philadelphia neighborhood and opens a repair shop. He is harassed by the local gang leader who wants to extort money from him. He promises to pay Johnson, a police officer whose beat includes Gregg's store, $50 a week to "keep an eye on the store" while walking his beat. Which of the statements is true with respect to Gregg's situation? A. The local gang leader will keep his promise of not harassing Gregg for money as long as Gregg pays him $50 a week. B. The cop can sue Gregg for not keeping his promise of paying 50$ per week. C. Johnson being a public officer, his duties towards Gregg is not consideration. D. In this case, Gregg is the promisee and Johnson is the promisor.

Q: Consideration can have legal value: A. if there is no proof of bargain between the promisor and promisee. B. if the promisee does or agrees to do something, he or she had no prior legal duty to do, in exchange for the promisor's promise. C. if the promisee agrees to do something he or she has a legal right to do in exchange for the promisor's promise. D. if the promisee doesn't give up something in exchange for the promise made by the promisor.

Q: If Guss agrees to sell his house to Pam for $300,000, a property which is actually worth $200,000: A. Pam can recover damages for breach of contract if Guss refuses to perform. B. Pam will be able to get a court order for the specific performance of Guss' promise (ordering Guss to give Pam a deed to his house). C. Guss is not entitled to equitable remedies. D. Pam cannot recover damages for breach of contract.

Q: Lou enters into an agreement with LaFancy, a wedding planning company, to coordinate her June wedding for the sum of $10,000. In March, Lou calls LaFancy to tell the company the deal is off, because she thinks she can do a better job herself. LaFancy sues Lou, and Lou argues lack of consideration as a defense. Which of the following statements is correct? A. LaFancy has given consideration. B. LaFancy had a legal duty to plan Lou's wedding even before the agreement was signed. C. Lou can enforce LaFancy's promise to her. D. Lou has given consideration.

Q: If Kate promises a stereo to Uli, which of the following holds true with regard to the idea of consideration? A. Uli will not be able to enforce Kate's promise if he has not done anything in return. B. Uli need not offer adequate consideration to Kate in return for her promise. C. Kate's promise need not be supported by consideration. D. Uli's consideration should be an act and not a promise.

Q: Under the UCC, cashing a "payment in full" check discharges the obligation of debt.

Q: A promise supported by past consideration is enforceable.

Q: Forbearance from suing can never be valid consideration.

Q: A bilateral contract that lacks mutuality is unenforceable due to lack of consideration.

Q: Legal value, bargained for and given in exchange for an act or promise is called ____. A. compensation B. obligation C. consideration D. forbearance

Q: Which of the following statements is true for consideration? A. It always has a monetary value, regardless of a legal value. B. A promisee can be enforced by the courts to keep his/her promise. C. It enforces gratuitous (free) promises. D. It is a legal value given in exchange for an act or promise.

Q: For a debt to be considered unliquidated, the dispute about the existence or amount of the debt must be in good faith.

Q: Courts grant equitable remedies to those who seek to enforce grossly inadequate bargains on the grounds that such persons are entitled to the special treatment equity affords.

Q: As a general rule, performing a preexisting duty is not consideration.

Q: Under the UCC, a modification of an existing contract for the sale of goods requires new consideration.

Q: Once a binding accord and satisfaction has been entered into, parties give up their right to have a court decide their liability.

Q: As a general rule, a promise to discharge a liquidated debt for partial payment of the debt at or after its due date is unenforceable due to lack of consideration.

Q: Legal value depends on the adequacy of consideration.

Q: In determining whether a party has given consideration, courts look at whether the promises exchanged were of equal value.

Q: Freedom of contract includes the freedom to make bad bargains.

Q: A promisee's consideration must be another promise and cannot be in the form of an act.

Q: When a promisee agrees not to do something he or she has a legal right to do in exchange for the promisor's promise, it constitutes legal value.

Q: The UCC and the U.N. Convention of Contracts for the International Sale of Goods both hold that acceptances are effective when they are dispatched.

Q: An acceptance sent by stipulated means is effective when dispatched.

Q: According to the UCC, the offeror who remains silent impliedly authorizes the offeree to accept by any reasonable means of communication.

Q: An acceptance is not effective upon dispatch by the offeree if the offer is sent by a stipulated means.

Q: Parties who are negotiating a contract always prepare a written draft of the agreement for both parties to sign.

Q: If an offeror requires a certain method of acceptance, the offeree must accept by that method or no contract is formed.

Q: Whenever possible, the courts interpret an offer as proposing a bilateral contract.

Q: A contract that is impliedly accepted by doing something that objectively indicates agreement can be considered as a bilateral contract.

Q: An offer that says "If you do not object within 10 days, we have a contract" imposes a legal duty on the offeree to respond.

Q: Trade usage is a situation where the parties are both members of a trade in which failure to reject promptly customarily indicates acceptance.

Q: Ernie Hemingway was fired by his employer, Gerty Stein's Sweat Shop. After he was fired, Ernie received a letter from Sweat Shop offering him double severance pay in exchange for a release of all age discrimination claims against the company. Ernie signed the release and put it in a mailbox outside the post office. Later, Ernie changed his mind and called Sweat Shop to say "I refuse your offer and will be filing suit for age discrimination." Is Ernie's withdrawal of his acceptance of Sweat Shop's offer effective? Why or why not?

Q: Explain the similarity and difference between click-on and browse-wrap contracts.

Q: The court looks for the same present intent to contract on the part of the offeree to determine whether the offer has been accepted.

Q: The UCC requires application of the "mirror image" rule in cases where contract for the sale of goods are made by exchanging forms.

Q: Explain the process followed by the court to determine the intent of the parties to enter into a contract, if a dispute arises before the written draft of agreement is created?

Q: Explain the idea of "stipulation" and the effect it has on a contract.

Q: On May 1, 2002, Bob received a telegram from Ralph offering to support him in his new construction project. On May 5, 2002, at 9:00 AM, Ralph sends Bob a telegram attempting to revoke the offer. At 11:00 AM on the same day, Bob mails Ralph a letter attempting to accept the offer. At 11:30 AM, Bob receives Ralph's revocation.Assume Bob and Ralph are both construction contractors and the custom in the construction business is to offer by telegram and accept by mail. Which of the following statements holds true in this situation? A. Ralph's revocation can make changes to the contract, though it reaches Bob after he sends the acceptance mail. B. Bob's acceptance would be effective only when Ralph reads the acceptance, which would then create the contract. C. the parties would have a contract because Bob used the means of communication impliedly authorized by trade usage. D. the parties would not have a contract as Bob used a nonauthorized means of communicating his acceptance.

Q: In general, if the offeree uses a means of acceptance that is slower than that used by the offeror to communicate that offer: A. it is an unauthorized means of communication. B. the acceptance is not effective even upon receipt. C. it is an authorized means of communication. D. the acceptance is effective when dispatched.

Q: In a browse-wrap contract: A. the user assents to contractual terms by clicking on a button that reads "yes" or "I agree." B. a written draft of the agreement is prepared and the user accepts the terms by signing on it. C. time, place, or method of communication is spelled out in the contract. D. the agreements claim that a user assents to the terms by taking a specified action.

Q: Browse-wrap agreements are: A. in paper form. B. viewed by some courts as unenforceable. C. per se illegal. D. viewed by all courts as enforceable.

Q: Explain the UCC's "battle of the forms" rule.

Q: On April 1, 2008, Joe received a telegram from Adam offering to build Joe a resort cottage for $100,000. On April 5, 2008, at 10:00 AM, Adam sends Joe a telegram attempting to revoke the offer. At 11:00 AM on the same day, Joe sends Adam an e-mail attempting to accept the offer. At 11:30 AM, Joe receives Adam's revocation. Assume Adam's offer was silent on the question of what means Joe could use to accept. Which of the following is true when the offeror impliedly authorizes acceptance by any reasonable means? A. the parties would not have a contract because the impliedly authorized means of communication was a telegram. B. the parties may have a contract if the court concludes that mail was a reasonable way for Joe to accept Adam's offer. C. the parties would not have a contract because Joe did not use the means impliedly authorized by trade usage. D. the parties may have a contract if Adam reads the acceptance e-mail before the revocation reaches Joe.

Q: If an offeree dispatches both an acceptance and a rejection to an offer: A. the acceptance is effective as soon as it is dispatched and a contract is created. B. the rejection is effective as soon as it is dispatched and no contract can be created. C. neither the acceptance nor the rejection is effective and another response must be issued. D. whichever response reaches the offeror first will determine whether a contract is created.

Q: When an offeree uses a nonauthorized means of acceptance, the acceptance is: A. effective upon dispatch. B. illegal. C. not effective until it is received by the offeror. D. not effective upon receipt by the offeror.

Q: On June 1, Fred sends Wilma an e-mail offering to build her a new garage for $20,000. In his e-mail, Fred wrote, "acceptance by certified mail is advisable." On June 2 at 8 am, Fred sends Wilma a certified letter attempting to revoke the offer. At 2 pm the same day, Wilma mails Fred a letter via certified mail attempting to accept his offer. Under these circumstances: A. the parties do not have a contract until Fred receives Wilma's acceptance. B. Fred's revocation is effective and the parties do not have a contract. C. Wilma's acceptance is effective upon dispatch. D. the parties do not have a contract as the trade usage is telegrams and not certified mail.

Q: The means used by an offeror to communicate the offer: A. is the impliedly authorized means for accepting regardless of circumstances. B. is the impliedly authorized means for accepting unless the circumstances do not indicate otherwise. C. is the only authorized means of communication for accepting. D. always follows the offeror's particular trade usage in communication, as it impliedly authorizes a given means of acceptance.

Q: An acceptance is effective as soon as it is dispatched: A. if the offeree uses only an authorized means of communication. B. if the offeree uses only a stipulated means of communication. C. if the offeree uses an authorized or a stipulated means of communication. D. if the offeree uses any reasonable means of communication.

Q: (p. 213; 215) Which of the following under the UCC is true about the way to communicate acceptance? A. any means deemed reasonable by the court in light of the circumstances is an authorized way of acceptance. B. dispatches that comply with only the stipulated requirements for acceptance is an authorized way of acceptance. C. any form of acceptance that is not implied by trade usage is an authorized way of acceptance. D. a means slower and safer than the way the offer was communicated is an authorized way of acceptance.

Q: Mack's Bar sent Olive Outlet an order for 200 cases of olives, to be shipped "as soon as possible." The day Olive Outlet receives Mack's order, it ships the olives. Later that day, Mack phones the Outlet and tries to revoke his offer. Under these circumstances: A. Mack cannot revoke, since a contract was created when Outlet shipped the olives. B. Mack can revoke because the acceptance had not been received. C. Mack can revoke based on principles of promissory estoppel. D. Mark cannot revoke, since the olives will get spoilt if it is shipped back.