Question 1

The term "past consideration" is not really consideration at all because the law will not find a contract where there is no bargained-for-exchange.

Accepted Answer

Past consideration refers to something that has already been done or given in the past, without any expectation of receiving something in return. This means that there was no bargained-for-exchange, and therefore, it does not qualify as consideration under the law. As a result, past consideration cannot be used as the basis for a contract.

Question 2

A conditional promise is a promise the performance of which depends upon the happening or nonhappening of an event not certain to occur.

Accepted Answer

A conditional promise is a promise that is only binding if a certain event occurs or does not occur. The performance of the promise depends on the uncertain future event.

Question 3

Fran negligently drove her truck through Nick's fence,causing damage.If she promises to pay Nick $1,500 if he does not bring a lawsuit against her,Nick accepts and forms a unilateral contract by not filing suit.His forbearance is consideration.

Accepted Answer

This is a valid example of a unilateral contract, where Nick's forbearance (not bringing a lawsuit) is considered sufficient consideration for Fran's promise to pay $1,500.

Question 4

The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.

Accepted Answer

Performance of a pre-existing contractual duty, which is neither doubtful nor the subject of an honest dispute, is not considered legally sufficient consideration to support a second contract. This is because there is no new consideration being offered in the second contract.

Question 5

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

Accepted Answer

Courts will often imply a duty of good faith and fair dealing in contracts, which can transform illusory promises into enforceable obligations. This duty requires parties to act honestly and not interfere with the other party's rights and benefits under the contract.

Question 6

An illusory promise has the form of a promise but imposes no real obligation.

Accepted Answer

An illusory promise appears to be a promise, but it does not actually create a legal obligation. It lacks consideration, which is a necessary element for a contract to be enforceable. Therefore, it is not a real promise.

Question 7

In settling a liquidated debt,payment of a smaller amount before the due date would constitute consideration,but paying a lesser amount on the due date at an agreed-upon different place of payment would not be legally sufficient consideration.

Accepted Answer

Consideration involves something of value exchanged between parties, and changing the terms of a debt agreement, such as the place of payment, can constitute new consideration, making an agreement to accept a lesser amount on the due date at a different place legally sufficient if both parties agree to the new terms.

Question 8

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

Accepted Answer

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

Question 9

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

Accepted Answer

Legal sufficiency of consideration means that the consideration must have some legal value, but it does not necessarily have to be of equal value to the subject of the contract. Adequacy of consideration, on the other hand, means that the consideration should be a fair and reasonable equivalent to the value of the subject of the contract. Therefore, these two terms are not synonymous.

Question 10

Jerry received a bill for $300 from Johnson for a tune-up Johnson had performed on Jerry's car.Jerry called Johnson and told him,"The car runs no better now than before the tune-up.I am sending you $100 and no more." Johnson received the $100 check which was marked "paid in full" and cashed it.Jerry is still liable to Johnson for $200.

Accepted Answer

By cashing the check marked "paid in full", Johnson agreed to accept the $100 as payment in full for the tune-up, which means Jerry is no longer liable for the remaining $200. This is a legal concept called "accord and satisfaction".

Question 11

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

Accepted Answer

Consideration can be either a legal detriment to the promisee or a legal benefit to the promisor.

Question 12

If a promise is illusory,there is no mutuality of obligation.

Accepted Answer

If a promise is illusory, it means that one party has the discretion to not fulfill their obligations under the promise. This lack of mutual obligation means that the promise cannot be enforced as a contract.

Question 13

In most states,a contract under seal is binding without consideration.

Accepted Answer

The answer of In most states,a contract under seal is...

Question 14

A liquidated debt is an obligation the existence or amount of which is in dispute.

Accepted Answer

A liquidated debt is actually an obligation the existence or amount of which is NOT in dispute. It refers to a specific and agreed upon amount of money that is owed.

Question 15

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

Accepted Answer

Legal detriment refers to the promisee giving up something of value or a legal right, not the promisor obtaining something.

Question 16

Delany owes Carl a past-due undisputed debt of $500.Delany sees Carl in a bar and pays him $400.Carl then says to Delany,"Forget about the other $100 you owe me.I'm glad to get the $400." Carl's promise to discharge the remainder of the debt is binding.

Accepted Answer

Carl's promise to discharge the remainder of the debt is not binding because there is no consideration for Carl's promise to forgive the $100. In contract law, for a modification or a promise to be binding, there must be new consideration; since the debt was undisputed and past due, paying a portion of it does not constitute new consideration.

Question 17

In a bilateral contract,if one party is not bound,neither party is bound.

Accepted Answer

This is known as the principle of mutual assent, where both parties must be bound in order for the contract to be enforceable. If one party is not bound, the contract becomes void.

Question 18

The Restatement provides that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.

Accepted Answer

The Restatement does provide that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.

Question 19

Under the common law,in order to be enforceable,a modification of an existing contract must be supported by mutual consideration.

Accepted Answer

Under the common law, a modification of an existing contract must be supported by mutual consideration to be enforceable. This means that both parties must agree to give something of value to the other in exchange for the modification. Without mutual consideration, the modification is not legally binding.

Question 20

The most common application of the doctrine of promissory estoppel is to charitable subscriptions,such as pledges to churches,memorials,college buildings,and hospitals.

Accepted Answer

The statement is true. The doctrine of promissory estoppel is often applied to charitable subscriptions, where a donor makes a promise to donate a certain amount of money to a charitable cause or organization. If the organization relies on this promise to its detriment, the donor may be estopped from reneging on the promise.

Quiz 12: Consideration

The term "past consideration" is not really consideration at all because the law will not find a contract where there is no bargained-for-exchange.

A conditional promise is a promise the performance of which depends upon the happening or nonhappening of an event not certain to occur.

Fran negligently drove her truck through Nick's fence,causing damage.If she promises to pay Nick $1,500 if he does not bring a lawsuit against her,Nick accepts and forms a unilateral contract by not filing suit.His forbearance is consideration.

The performance of a pre-existing contractual duty which is neither doubtful nor the subject of an honest dispute is legally sufficient consideration to support a second contract.

Otherwise illusory promises may be transformed by some courts into actual promises by implying an obligation of good faith and fair dealing.

An illusory promise has the form of a promise but imposes no real obligation.

In settling a liquidated debt,payment of a smaller amount before the due date would constitute consideration,but paying a lesser amount on the due date at an agreed-upon different place of payment would not be legally sufficient consideration.

Contracts binding without consideration include promises to pay debts barred by a statute of limitations and debts discharged in bankruptcy.

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

Consideration exchanged for a promise does not require both legal detriment to the promisee and legal benefit to the promisor.

If a promise is illusory,there is no mutuality of obligation.

In most states,a contract under seal is binding without consideration.

A liquidated debt is an obligation the existence or amount of which is in dispute.

Legal detriment means the obtaining by the promisor of that which he had no prior legal right to obtain.

Delany owes Carl a past-due undisputed debt of $500.Delany sees Carl in a bar and pays him $400.Carl then says to Delany,"Forget about the other $100 you owe me.I'm glad to get the $400." Carl's promise to discharge the remainder of the debt is binding.

In a bilateral contract,if one party is not bound,neither party is bound.

The Restatement provides that a promise following the rendering of emergency services is binding even if not supported by consideration if necessary to prevent injustice.

Under the common law,in order to be enforceable,a modification of an existing contract must be supported by mutual consideration.

The most common application of the doctrine of promissory estoppel is to charitable subscriptions,such as pledges to churches,memorials,college buildings,and hospitals.