Chapter 15 Business Law

63 terms by keatennorth

Create a new folder

Advertisement Upgrade to remove ads

_____ is what a person will receive in return for performing a contract obligation.

Consideration

Joseph agrees to purchase Mary's car for $1,000. For Mary, Joseph's payment of $1,000 is:

a consideration.

A promise to stay in a job until a particular project is complete is an example of:

a benefit to the promisor

Which of the following can be considered an example for a detriment to the promisee?

A promise to your football coach to refrain from riding your motorcycle during football season even though you love riding it.

Promissory estoppel occurs when:

the only way to avoid injustice is to enforce the promise

Brian offers to sell Rachel his skis for $500. Rachel responds, "I'll look at them in the morning, and if I like them, I'll pay you." At this point, she has not committed to doing anything. This is an example of:

an illusory promise

Which of the following indicates a promisee's performance rendered before the promisor's promise was made?

Past consideration

Which of the following is true of preexisting duty?

Performance of a duty one is obligated to do under the law is not good consideration.

A(n) _____ contract is an agreement whereby the buyer agrees to purchase all his or her goods from one seller.

requirement

Which of the following is an agreement whereby the seller guarantees to sell everything he or she produces to one buyer?

An output contract

Mostly, in a liquidated debt:

there is no dispute that money is owed or how much.

An unliquidated debt is a debt that:

involves an honest dispute about the existence or amount of the debt.

The ____ is the new agreement to pay less than the creditor claims is owed.

accord

Which of the following terms best describes a debtor's payment of the reduced amount during the legal settlement of a disputed claim?

Satisfaction

Which of the following is true of an accord and satisfaction?

A debtor must pay the amount they have agreed upon in satisfaction

Consideration is optional in every contract

false

In a bilateral contract, the consideration for a promise is a completed act.

false

An exception to the rule requiring consideration is promissory estoppel.

true

An illusory promise is not a consideration.

true

As a rule, past consideration qualifies as consideration.

false

In some cases, if past consideration was given with expectation of future payment, the court may enforce the promise.

true

A promise to do something that you are already obligated to do is generally a valid consideration

false

The UCC permits requirement, but not output, contracts for the sale of goods.

false

Partial payment of a debt may or may not be valid consideration, depending on whether the debt is liquidated or unliquidated.

true

A liquidated debt may be the subject of an accord and satisfaction.

false

Which of the following is what a person will receive in return for performing a contractual obligation?

Consideration

Sam promises his uncle, Bob, that he will lose 10 pounds and exercise every day during the spring semester in exchange for having his tuition paid for the fall semester. The uncle agrees; but after Sam has lost 10 pounds and exercised all semester, Bob refuses to pay saying that no contract existed. Which of the following is true?

Consideration was present, there was an enforceable contract, and Bob has wrongfully refused to pay.

Which of the following are examples of consideration?

Both a benefit to the promisor and a promise to do something.

In a bilateral contract, the consideration for each promise is ______.

A return promise

In a unilateral contract, the consideration for a promise is ______.

Action

Which of the following is an exception to the rule requiring consideration?

Promissory estoppel

Which of the following occurs when three conditions are met: one party makes a promise knowing the other party will rely on it; the other party does rely on it; the only way to avoid injustice is to enforce the promise?

Promissory estoppel

Which of the following would not be considered an example of consideration?

A promise to pay your employees as required by law.

Which of the following is true regarding the adequacy of consideration?

Courts seldom consider the adequacy of consideration but will do so if fraud is involved.

As discussed in the case of Double AA builders, Ltd. v. Grand State Construction L.L.C., which of the following may be used to necessitate that a subcontractor perform according to the terms of its bid because the contractor has relied on the subcontractor's bid?

Promissory estoppel

Which of the following is true regarding illusory promises?

Illusory promises are not consideration.

Sam offers Betty his bicycle for $75. Which of the following is an example of an illusory promise on the part of Betty?

"I'll take it if I decide to do so."

For a court to enforce a promise, ______ must offer consideration.

both sides

Which of the following was the result in the Case Opener in which the attorney sued to recover the value of 3 percent of the defendant's stock based on the fact that he provided a loan to the defending company, and the directors later promised the stock to him?

The court ruled that the attorney was not entitled to the value of the stock because it was offered as a gift.

Under the ______, promises based on past consideration may be enforceable to the extent necessary to avoid injustice.

Restatement (Second) of Contracts

A promise to do something that you are already obligated to do is ______.

Not valid consideration

What does the preexisting duty rule mean?

Performance of a duty one is obligated to do under the law is not good consideration, and performance of an existing contractual duty is not good consideration.

Yolanda agrees to bathe and groom Wendy's dog, Fluffy Puff, for $30. Yolanda agreed to the price before seeing Fluffy Puff who is a chubby dog with lots of hair. Yolanda tells Wendy that if she is going to groom Fluffy Puff, the price will be $40. Wendy reluctantly agrees but tells Yolanda that she should not have been surprised that a dog named Fluffy Puff had lots of hair. Yolanda bathes and grooms Fluffy Puff, but Wendy will only pay $30. Which of the following is correct regarding Yolanda's entitlement to the extra $10?

Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because Wendy's promise to pay $30 was illusory.

Which of the following are exceptions to the preexisting duty rule?

Unforeseen circumstances and additional work, but not past consideration

Sally goes to have her hair trimmed and agrees to pay $40 to the stylist. While there, Sally decides that she would also like highlights. The stylist informs her that highlights will cost an additional $30. Sally agrees to the price, gets the highlights, but refuses to pay the extra amount. What is the likely result in a dispute between Sally and the stylist and why?

The stylist will win because she did additional work in exchange for the extra payment; and, therefore, Sally's promise was supported by valid consideration.

Under Article ______ of the UCC, an agreement modifying a contract needs no consideration to be binding.

two

Sam, who has a retail clothing store, orders 50 white shirts from XYZ manufacturer. He later calls a representative of XYZ and requests that blue shirts be sent instead. The representative agrees and sends a confirmation. Sam gets white shirts and complains. The XYZ representative says there was no consideration for the contract. Which of the following is the correct resolution of the dispute?

Sam is correct because under the UCC, no additional consideration was needed.

Mary has a pet shop and orders 50 packages of dog food for puppies from a supplier for a total cost of $1,000. Later she calls the supplier and changes the order to food for adult dogs. When 50 packages of puppy food arrive, Mary complains. The supplier tells her that the modification was not valid because nothing was put in writing. Mary says there was never an agreement that a writing was necessary for a modification. Which of the following is the correct resolution of the dispute?

Mary is correct because under the circumstances, there was no requirement of a writing to modify the agreement

A(n) ______contract is an agreement whereby the buyer agrees to purchase all goods from one seller.

Requirement

A(n) ______contract is an agreement whereby the seller guarantees to sell everything he or she produces to one buyer.

Output

Which of the following is true of a requirement contract under common law?

It is not valid because of the lack of consideration.

Which of the following is true of an output contract under common law?

It is not valid because of the lack of consideration.

Which of the following is true of a requirement contract under the UCC?

It is valid so long as the requirement is made in good faith.

Which of the following is true of an output contract under the UCC?

It is valid so long as the output is made in good faith.

Which of the following is true regarding whether an accepted offer to pay part of a debt is consideration?

Partial payment is consideration if an unliquidated debt is involved.

In a[n] ______ debt, there is no dispute about the fact that money is owed and the amount of money owed.

Liquidated

In a[n] ______ debt, the parties either dispute the fact that any money is owed or agree that some money is owed but dispute the amount.

Unliquidated

Which of the following represents an accord and satisfaction?

When a dispute over an unliquidated debt is settled and paid for less than the full amount.

When an accord and satisfaction is at issue, the ______ is the new agreement to pay less than the creditor claims is owed.

Accord

When an accord and satisfaction is at issue, the ______ is the payment, by the debtor, of the reduced amount.

Satisfaction

Which of the following is true regarding an accord and satisfaction?

When amounts agreed upon are paid, the debt is fully discharged.

Which of the following is true under the UCC regarding checks marked "paid-in-full"?

If a business inadvertently cashes such a check, the business has 90 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.

Which of the following was the result in the case Mast Long Term Care v. Forest Hills Rest Home, covered in the Case Nugget, in which the defendant's rest home claimed it was not bound by an agreement to buy all its drugs not commonly stocked from the plaintiff?

The agreement contained sufficient consideration on the part of the plaintiff and defendant.

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again

Example:

Reload the page to try again!

Reload

Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Set