Question 1

Herm promises to pay Nixie to work as an assistant buyer for his Organic Foods stores.Nixie agrees and quits her job with Pic-U Grocery,but Herm does not hire her.Herm is most likely liable to Nixie under

Accepted Answer

The doctrine of promissory estoppel may be applied when one party reasonably relies on the promises of another party and suffers a detriment as a result. In this scenario, Nixie quit her job with Pic-U Grocery based on Herm's promise to hire her as an assistant buyer, but Herm did not follow through with the agreement. Therefore, Herm could be liable to Nixie under promissory estoppel. The other options are incorrect as there was no dispute that the promise was made, and there is no indication that Herm attempted to use a preexisting duty as an excuse for not hiring Nixie.

Question 2

Homebuyers Mortgage Corporation's promise to pay its employees a year-end bonus "if it seems like a good idea at the time" is

Accepted Answer

The promise made by Homebuyers Mortgage Corporation is an illusory promise because it does not create any legal obligation on the part of the employer to pay a bonus to its employees. The language used is too vague and subjective as it leaves the decision to pay the bonus entirely up to the discretion of the employer. As such, the promise lacks the essential elements required for a valid contract.

Question 3

Domestic Auto Sales,Inc.,promises its salaried employees a bonus at the end of the year if management thinks it is warranted.This promise is

Accepted Answer

The promise is unenforceable because it lacks consideration; the bonus is contingent on management's discretion, making it an illusory promise.

Question 4

Mary promises to pay her assistant Ned $10,000 in consideration of the ser?vices he provided over the years.Mary never pays Ned.Mary is

Accepted Answer

In contract law, past consideration is not valid consideration. Since Ned's services were provided in the past, Mary is not legally obligated to pay him based on those past services.

Question 5

Fact Pattern 12-A1 (Questions A4-A6 apply)
Jesse 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 12-A1."Adequacy" of consideration refers to

Accepted Answer

Adequacy of consideration refers to "how much" consideration is given, focusing on the fairness or equivalence in the value exchanged between the parties.

Question 6

Cherry is injured in an accident caused by Bronco.Bronco agrees to pay Cherry $2,500 if she agrees to release him from further liability.Cherry agrees.If Cherry's damages ultimately exceed $2,500,she can

Accepted Answer

Cherry cannot collect the balance from Bronco, as she has already released him from further liability by agreeing to accept the $2,500 payment. This is known as a release of claims or a settlement agreement. Once a release is signed, it typically prevents the injured party from pursuing any further legal action against the party who caused the injury.

Question 7

Vince offers to buy a book owned by Sun-Hi for twice what Sun-Hi paid for it.She accepts and hands the book to Vince.Sun-Hi's delivery of the book is

Accepted Answer

Sun-Hi agreeing to sell the book to Vince for twice the amount she paid for it is a bargain, and therefore constitutes consideration. The fact that Sun-Hi already possessed the book does not negate the fact that she provided something of value to Vince in exchange for his payment.

Question 8

Betty pledges to donate $1,000 to the Children's Hospital.On the basis of the pledge,the hospital orders additional equipment.Betty reneges on the pledge.The hospital sues Betty.If the court enforces the pledge,it will be

Accepted Answer

The doctrine of promissory estoppel prohibits a party from going back on a promise if the other party relied on it and suffered a detriment as a result. In this case, the hospital relied on Betty's pledge to order additional equipment, and if Betty reneges on the pledge, it would cause a financial detriment to the hospital. Therefore, the court may enforce the pledge under the doctrine of promissory estoppel.

Question 9

Refer to Fact Pattern 12-A2.If CCC offers,as a reason for the extra $100,000,that extraordinary unforeseen difficulties will add consid?erable cost to the project,the agreement is

Accepted Answer

The agreement is enforceable because unforeseen difficulties can justify a modification of the contract terms, making the new agreement valid.

Question 10

Berkie's bicycle is damaged in an accident caused by Imogene.Berkie agrees not to sue Imogene if she will pay for the damage.If she fails to pay,Berkie can bring an action for breach of contract.This is

Accepted Answer

A covenant not to sue is an agreement where one party agrees not to pursue legal action in exchange for some form of compensation or action, which is exactly what Berkie and Imogene agreed upon.

Question 11

Fact Pattern 12-A1 (Questions A4-A6 apply)
Jesse 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 12-A1.A court is most likely to evaluate the adequacy of consid?era?tion if

Accepted Answer

A 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 scenario, Jesse is claiming that the consideration for the contract-a student loan accruing interest at a certain rate and payable beginning on a certain date-was inadequate. Therefore, the court would be interested in examining the relative value of what Jesse received (the loan) with what he gave (the promise to pay).

Question 12

Kelsey promises to pay Jon,her son,$15,000 if he obtains his degree at Ivy University,where he is currently in his second year.Jon graduates.Kelsey is

Accepted Answer

Kelsey promised to pay Jon $15,000 if he obtains his degree at Ivy University and since Jon graduated and obtained his degree at Ivy University, Kelsey is required to pay. The fact that Jon was already at Ivy University or that obtaining a degree benefits Jon are not relevant to the promise made by Kelsey.

Question 13

Fact Pattern 12-A2 (Questions A8-A10 apply)
Cut-Rate Construction Company (CCC)begins building a restaurant for Diners Restaurants,Inc.,but after two months demands an extra $100,000.Diners agrees to pay.
-Refer to Fact Pattern 12-A2.If CCC offers no reason for the extra $100,000,but says only that it will otherwise stop construction,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 14

Under a contract with Bucolic Farms,Agro Excavation,Inc.,begins digging an agricultural pond.In mid-project,Agro asks for $15,000 over the contract price,claiming an increase in the "cost of doing business." Bucolic agrees but later refuses to pay.Their agreement is

Accepted Answer

Agro's request for additional payment is considered a preexisting duty under the contract. Agro was already obligated to perform the work for the original contract price, and thus their performance of the work is not valid consideration for the additional payment. Therefore, the agreement for the additional payment is unenforceable.

Question 15

Fact Pattern 12-A2 (Questions A8-A10 apply)
Cut-Rate Construction Company (CCC)begins building a restaurant for Diners Restaurants,Inc.,but after two months demands an extra $100,000.Diners agrees to pay.
-Refer to Fact Pattern 12-A2.If CCC offers,as a reason for the extra $100,000,that ordinary business expenses have increased,the agree?ment is

Accepted Answer

The preexisting duty rule states that a promise to do something that one is already legally obligated to do cannot be consideration for a new contract. In this case, CCC was already obligated to complete the restaurant construction for the original agreed-upon price. Therefore, their demand for an extra $100,000 cannot be enforceable under the preexisting duty rule.

Question 16

Jen questions whether there is consideration for her contract with Isaac to exchange her catering services for his payment of a certain amount.To constitute consideration,the value of whatever is exchanged must be

Accepted Answer

Consideration must be legally sufficient, meaning that it must have some value in the eyes of the law. It does not necessarily need to be objectively worthy or practically sound, and gross inadequacy may indicate a lack of genuine agreement or potential for fraud, but it is not always determinative of consideration. The important aspect is that there is something of value being exchanged between the parties.

Question 17

Panini Vittles,Inc.,contracts with Qino to deliver its sandwiches.Later,the parties decide to cancel their contract.They can

Accepted Answer

Rescinding their entire contract may not be necessary or feasible, as some parts of the contract may have already been performed. Rescinding only the executory portions of the contract allows the parties to avoid further performance obligations and terminate the contract moving forward. Options C and D are not accurate as there is no requirement for a new contract to be made or for the parties to continue with the existing contract.

Question 18

Auto Body Repair Shop (ABRS)promises to pay Ben $1,000 a week to work for ABRS.Ben accepts and quits his job with Car Care Service.ABRS fails to provide a job for Ben.Ben has a cause of action based on

Accepted Answer

ABRS made a promise to Ben and Ben relied on that promise by quitting his previous job. This creates a situation of promissory estoppel, which may allow Ben to recover damages for ABRS's failure to provide a job.

Question 19

Venture Capital Corporation loans Wally $15,000 to start a new business.Wally does not pay,but Venture fails to sue within the time prescribed by the applicable statute of limitations.Wally's promise to pay the debt even though recovery is barred

Accepted Answer

A promise to pay a debt barred by the statute of limitations is enforceable without new consideration, as it is considered a reaffirmation of the original obligation.

Question 20

Fact Pattern 12-A1 (Questions A4-A6 apply)
Jesse 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 12-A1.If,as Jesse claims,the consideration in this problem is inadequate,it may indicate a lack of

Accepted Answer

The doctrine of consideration requires a bargained-for exchange or mutual assent. If Jesse claims that the consideration in the contract was inadequate, it may indicate a lack of mutual assent, which could be used as a defense against the breach-of-contract suit.

Quiz 12: Consideration