Quizzes- Law 1 - Fall 2012

 

Quiz C - Chapter 12 - Consideration

  

 1. Rollo promises to perform, for a price, shoe repair services in affiliation with Togs ‘n Things, a clothing store. To support a contract, the consideration exchanged by the parties must be

 

a. adequately considerate.

b. equally valuable.

c. legally sufficient.

d. wisely priced.

 

2. Axel, the owner of Bar-B-Q Café, announces that he plans to paint its front fluorescent red. Cleo, the owner of Delicate Dress Shop next door, promises to pay Axel $1,000 to use a more conservative color. Axel agrees. Cleo’s promise is

 

a. enforceable, because Axel agreed to refrain from doing something that he was legally entitled to do.

b. enforceable, because Axel would resent Cleo if she never paid.

c. unenforceable, because Axel agreed to refrain from doing something that he was legally entitled to do.

d. unenforceable, because Axel’s color choice was offensive to Cleo.

 

3. Jill promises to pay Kyle $500 because “he does not have as much money as other people.” Jill’s promise is

 

a. enforceable because society wants people to keep their promises.

b. enforceable because the redistribution of wealth is a valid social goal.

c. not enforceable because Jill could have given more.

d. not enforceable because Kyle has not given consideration in return.

 

4. Coverage, Inc. (CI), coordinates an insurance network that includes 1 million potential patients. By contracting with CI, a medical provider gains access to the network in exchange for accepting payments at lower than market rates. Doctors, Inc., contracts with CI but, when few patients are forthcoming, files a suit to recover the difference between the contract and market rates. The court will most likely rule that the contract is

 

a. enforceable because consideration is not required for this contract.

b. enforceable because the contract does not lack consideration.

c. not enforceable because Doctors received few patients.

d. not enforceable because the contract lacks consideration.

 

5. Jeff offers Kelly $1,000 for her three-year-old laptop computer. Kelly accepts. If a dispute arises, a court would likely

 

a. enforce the deal after questioning the adequacy of consideration.

b. not question the adequacy of the consideration.

c. rewrite the deal after questioning the adequacy of consideration.

d. set aside the deal after questioning the adequacy of consideration.

 

6. Quality Steel Corporation files a suit against Rite Tool Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if

 

a. it is obvious that the consideration is adequate.

b. Rite Tool asserts that there is adequate consideration.

c. something of value passed between the parties.

d. the consideration is worth more than $100.

 

7. Applied Methods Corporation promises to give stock options to Brad, a production designer, for processes he has already designed. This promise is

 

a. enforceable because it is a new contract.

b. enforceable because it is an illusory promise.

c. enforceable because it is supported by past consideration.

d. unenforceable.

 

8. Baked Goods Company agrees to supply Comida Café with all the corn chips that it requires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Baked Goods asks Comida to pay a higher price for the chips. This request is

 

a. invalid as an attempt at extortion or the so-called holdup game.

b. invalid under the preexisting duty rule.

c. valid as a risk ordinarily assumed in business.

d. valid due to the unforeseen difficulty of the sudden price increase.

 

9. Todos Ltd. agrees to supply United Steel, Inc., with minerals from Venezuela. When the government is unexpectedly overthrown in a revolution, Todos can obtain the goods only at 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.

 

10. Superior-Plus Properties, Inc., and Topps Construction Company sign a contract that specifies the amount to be paid. Additional compensation may be justified by

 

a. any business risks that occur after the time of the contract.

b. changes in the market price of needed materials during the contract.

c. extraordinary difficulties unforeseen at the time of the contract.

d. no circumstances.

 

11.  Sal contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract.  The next day, Sal changes her mind and again offers to deliver Tasty’s products. Tasty is willing to deal, but for a new price. Sal and Tasty

 

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.

 

12. Sal contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract. Sal and Tasty

 

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.

 

13. Speedy Assembly Company promises its employees a 10-percent raise at the end of the year if productivity has increased and management feels it is warranted. Speedy 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 productivity

increases.

d. give the employees a 10-percent raise under any circumstances.

 

14. Mei writes a check to Nat in an amount that represents half of her debt to him. On the back of the check, Mei includes the words “payment in full.” Nat cashes the check. This discharges 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.

 

15. George and Holly disagree as to the exact amount one owes the other. They form a new agreement that, on fulfillment, will discharge the prior obligation. This is

 

a. a covenant not to sue.

b. an accord and satisfaction.

c. a release.

d. promissory estoppel.

 

16.  Dag and Enita are in an auto accident. Dag offers B $2,000 if Enita promises not to pursue her potential legal claim against Dag. Enita agrees. Later, Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury. The agreement between Dag and Enita is a.

 

a covenant not to sue.

b. an accord and satisfaction.

c. a release.

d. promissory estoppel.

 

17.  Dag and Enita are in an auto accident. Dag offers B $2,000 if Enita promises not to pursue her potential legal claim against Dag. Enita agrees. Later, Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury. In Enita’s suit against Dag to recover her repair and medical expenses, Enita will most likely recover

 

a. half the amount to pay those costs over what Dag already paid Enita.

b. nothing.

c. the estimated amount to pay those costs and any other liability.

d. the exact amount to pay those costs and no more.

 

18. Quinn promises to sell his recreational vehicle (RV) to Sid, who builds a structure behind his house in which to keep it. Quinn’s later attempt to renege on the promise is

 

a. effective if Quinn did not ask Sid to build anything.

b. effective if Quinn wants to sell the RV to someone else.

c. not effective if Sid cannot obtain a similar RV for a similar price.

d. not effective if Sid detrimentally relied on Quinn’s promise.

 

19. Milo files a suit against National Corporation under the doctrine of promissory estoppel. Milo must show that

 

a. Milo justifiably refused to fulfill a promise to National.

b. Milo justifiably relied on National’s promise to his detriment.

c. National justifiably refused to fulfill a promise to Milo.

d. National justifiably relied on Milo’s promise to its detriment.

 

20. Carl pledges $1,000 to the Disaster Relief Organization (DRO). On the basis of the pledge, DRO orders additional rescue equipment. Carl fails to pay. In DRO’s suit, a court may enforce the pledge

 

a. according to the preexisting duty rule.

b. as an illusory promise supported by past consideration.

c. on a theory of accord and satisfaction.

d. under the doctrine of promissory estoppel.

updated: 9/15/11 @ 8:50 am