Question 1

Fact Pattern 11-4 Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 11-4.If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased,the agreement is​

Accepted Answer

The agreement is unenforceable due to the preexisting duty rule, which states that a party cannot demand additional compensation for performing a duty they are already contractually obligated to perform.

Question 2

Jenilee promises to pay Kyle $500 because "he does not have as much money as other people." Jenilee's promise is​

Accepted Answer

Jenilee's promise to pay Kyle is not enforceable because Kyle has not given consideration in return. Consideration is a legal requirement in a contract where both parties must give something of value to each other. In this scenario, Kyle has not given any consideration in exchange for Jenilee's promise to pay him. Therefore, Jenilee's promise is not legally binding.

Question 3

Aaron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country tunes at select social events for Banquet's payment of a certain amount.To constitute consideration,the value of whatever is exchanged must be​

Accepted Answer

Consideration must be legally sufficient, meaning it has some value in the eyes of the law. It does not have to be precisely adequate or practically sound, but it must be objectively worthy.

Question 4

Fact Pattern 11-3 Sally 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.
-Refer to Fact Pattern 11-3.Sally and Tasty​

Accepted Answer

Rescinding a contract means cancelling it and restoring the parties to the position they were in before entering into the contract. If the contract is fully executed, it cannot be rescinded. However, if the contract is partly executory (meaning, some actions under the contract have not been performed yet), the parties can rescind the contract regarding those unperformed actions. Therefore, Sally and Tasty can rescind their contract to the extent that it is executory.

Question 5

William buys Liz's house for $100,000,which is the fair market value of the house.If the contract is later disputed in court,the court is likely to declare William's consideration​

Accepted Answer

The fair market value of the house at $100,000 is a legally sufficient consideration. It is not inadequate, past, or illusory.

Question 6

Fact Pattern 11-2 Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 11-2.A court is most likely to evaluate the adequacy of consideration if​

Accepted Answer

The court is most likely to evaluate the adequacy of consideration when there is a gross disparity in the value of the consideration exchanged. In this case, Brad is claiming that the consideration for the contract was inadequate, which suggests that there is a potential for a gross disparity in value.

Question 7

Martha is the sheriff of Junction,Texas.Alex robs a gas station on the edge of town and then evades capture.A $500 reward is offered for his capture.The following week,Martha captures Alex.Martha​

Accepted Answer

The answer of Martha is the sheriff of Junction,Texas.Alex robs...

Question 8

Julia and Mary have a contract that is still executory.They mutually agree to rescind their contract and at the same time make a new contract.If the new contract is contested in court and the court finds that there was a preexisting duty under the original contract,then the new contract​

Accepted Answer

If the court finds that there was a preexisting duty under the original contract, then the new contract will not be enforceable because there would be no consideration for the new agreement. Rescinding the original contract would not release the parties from their obligations under it, unless they provide new consideration. Therefore, the new contract would lack consideration and be unenforceable.

Question 9

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

Accepted Answer

Promising to give someone something for work they have already completed is not legally binding because it lacks consideration. Belden has already performed the work, so the promise of stock options cannot be used as an incentive for future performance. Therefore, this promise is unenforceable.

Question 10

D'Sean promises to pay his personal assistant Edie $50,000 in consideration of the services she provided over the years.D'Sean never makes the payment.D'Sean's promise is​

Accepted Answer

The answer of D'Sean promises to pay his personal assistant...

Question 11

Valley Paragliders Association files a suit against Wing Designers,Inc.,claiming that the consideration for their contract is inadequate.The court will most likely not examine the adequacy of the consideration if​

Accepted Answer

The court will not examine the adequacy of consideration as long as something of value passed between the parties. This means that as long as both parties gave and received something, the court will generally not inquire into the adequacy of that consideration, even if it may seem disproportionate or one-sided. The other options (A, B, and D) do not provide a full or accurate explanation of when the court will examine the adequacy of consideration.

Question 12

Frisco offers to buy a Gibson guitar owned by Hayden for twice what Hayden paid for it.She accepts and hands the guitar to Frisco.Her delivery of the guitar is​

Accepted Answer

Hayden provided consideration by delivering the guitar to Frisco in exchange for Frisco's promise to pay twice what Hayden paid for it. The fact that Frisco's offer was a "good deal" for Hayden does not render the exchange invalid as consideration.

Question 13

Sparky offers Teodora $1,000 for her collection of rare coins.She accepts.If a dispute arises,a court would likely​

Accepted Answer

Once Teodora has accepted Sparky's offer of $1000 for her collection of rare coins, a contract has been formed. In the absence of any fraudulent or improper behavior, the court will not question the adequacy of the consideration (i.e., the price offered). Therefore, the court would likely enforce the deal without questioning the adequacy of the consideration.

Question 14

Fact Pattern 11-4 Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 11-4.If Teatro says it is asking for the extra $250,000 because it has encountered extraordinary unforeseen difficulties that will add considerable cost to the project,the agreement is​

Accepted Answer

The agreement is enforceable because Teatro has encountered unforeseen difficulties which will add considerable cost to the project. This can be considered as a valid reason for requesting extra payment.

Question 15

Fact Pattern 11-4 Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay.
-Refer to Fact Pattern 11-4.If Teatro offers no reason for the extra $250,000,but says only that it will stop work if it is not paid,the agreement is​

Accepted Answer

The agreement is unenforceable due to the preexisting duty rule, which states that a party cannot demand additional compensation for performing a duty they are already contractually obligated to perform.

Question 16

Fact Pattern 11-2 Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 11-2.If,as Brad claims,the consideration in this problem is inadequate,it may indicate a lack of​

Accepted Answer

Inadequate consideration may indicate a lack of voluntary consent, meaning that one party did not fully understand or willingly agree to the terms of the contract.

Question 17

Digital Enterprise,Inc.,promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is​

Accepted Answer

The promise made by Digital Enterprise, Inc. is illusory because it leaves the decision of paying a bonus solely dependent on the discretion of management. As a result, it does not create a binding contract as there is no obligation on the company's part to pay the bonus, even if profits are high.

Question 18

Under a contract with Valley Vineyard,Walsh begins grading a terraced hillside for the planting of grapes.Halfway through the project,Walsh asks for $5,000 over the contract price,claiming an increase in the "cost of doing business." Valley agrees but later refuses to pay.Valley's agreement to pay more is​

Accepted Answer

Valley's agreement to pay more is unenforceable because Walsh's performance was a preexisting duty under the original contract. Asking for additional compensation to fulfill a duty one is already legally obligated to perform does not constitute consideration for a new agreement.

Question 19

Fact Pattern 11-2 Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate.
-Refer to Fact Pattern 11-2."Adequacy" of consideration refers to​

Accepted Answer

The answer of Fact Pattern 11-2 Brad defends against a breach-of-contract...

Question 20

Fact Pattern 11-3 Sally 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.
-Refer to Fact Pattern 11-3.The next day,Sally changes her mind and again offers to deliver Tasty's products.Tasty is willing to deal,but for a new price.Sally and Tasty​

Accepted Answer

Sally and Tasty Pizza Company may agree to a new contract that includes a new price since they both agreed to cancel the original contract. This new agreement would be binding and enforceable.

Quiz 11: Consideration

Jenilee promises to pay Kyle $500 because "he does not have as much money as other people." Jenilee's promise is​

Aaron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country tunes at select social events for Banquet's payment of a certain amount.To constitute consideration,the value of whatever is exchanged must be​

Fact Pattern 11-3 Sally 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. -Refer to Fact Pattern 11-3.Sally and Tasty​

William buys Liz's house for $100,000,which is the fair market value of the house.If the contract is later disputed in court,the court is likely to declare William's consideration​

Martha is the sheriff of Junction,Texas.Alex robs a gas station on the edge of town and then evades capture.A $500 reward is offered for his capture.The following week,Martha captures Alex.Martha​

Julia and Mary have a contract that is still executory.They mutually agree to rescind their contract and at the same time make a new contract.If the new contract is contested in court and the court finds that there was a preexisting duty under the original contract,then the new contract​

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

D'Sean promises to pay his personal assistant Edie $50,000 in consideration of the services she provided over the years.D'Sean never makes the payment.D'Sean's promise is​

Valley Paragliders Association files a suit against Wing Designers,Inc.,claiming that the consideration for their contract is inadequate.The court will most likely not examine the adequacy of the consideration if​

Frisco offers to buy a Gibson guitar owned by Hayden for twice what Hayden paid for it.She accepts and hands the guitar to Frisco.Her delivery of the guitar is​

Sparky offers Teodora $1,000 for her collection of rare coins.She accepts.If a dispute arises,a court would likely​

Digital Enterprise,Inc.,promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is​

Jenilee promises to pay Kyle $500 because "he does not have as much money as other people." Jenilee's promise is

Aaron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country tunes at select social events for Banquet's payment of a certain amount.To constitute consideration,the value of whatever is exchanged must be

Fact Pattern 11-3 Sally 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. -Refer to Fact Pattern 11-3.Sally and Tasty

William buys Liz's house for $100,000,which is the fair market value of the house.If the contract is later disputed in court,the court is likely to declare William's consideration

Martha is the sheriff of Junction,Texas.Alex robs a gas station on the edge of town and then evades capture.A $500 reward is offered for his capture.The following week,Martha captures Alex.Martha

Julia and Mary have a contract that is still executory.They mutually agree to rescind their contract and at the same time make a new contract.If the new contract is contested in court and the court finds that there was a preexisting duty under the original contract,then the new contract

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

D'Sean promises to pay his personal assistant Edie $50,000 in consideration of the services she provided over the years.D'Sean never makes the payment.D'Sean's promise is

Valley Paragliders Association files a suit against Wing Designers,Inc.,claiming that the consideration for their contract is inadequate.The court will most likely not examine the adequacy of the consideration if

Frisco offers to buy a Gibson guitar owned by Hayden for twice what Hayden paid for it.She accepts and hands the guitar to Frisco.Her delivery of the guitar is

Sparky offers Teodora $1,000 for her collection of rare coins.She accepts.If a dispute arises,a court would likely

Digital Enterprise,Inc.,promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is