Question 1

Consideration distinguishes mere agreements from legally enforceable obligations.

Accepted Answer

A) True 
 B)False

Question 2

The Uniform Commercial Code states that when a contract for the sale of goods is modified by agreement of the parties, consideration is necessary to make it enforceable.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true of the arrangement of composition of creditors?

Accepted Answer

A)   It results in the debtor paying a fine to creditors if he makes the payment after the due date.
B)   It involves creditors offering an extended time period during which the due payment can be made.
C)   It occurs when multiple creditors settle in full for a fraction of the amount owed.
D)   It refers to creditors recovering a 10 percent higher amount than what is due to them. C

Question 4

Pledges made by people to charitable associations have no binding power by law.

Accepted Answer

A) True 
 B)False  False

Question 5

Which of the following is an example of a valid consideration?

Accepted Answer

A)   A promises to sell paint to B when the shipment arrives.
B)   A promises to pay B if he stops driving above the speed limit.
C)   A promises to pay B if he refrains from committing theft.
D)   A promises to paint B's house if B leaves the house for two days.

Question 6

When charitable enterprises are financed by voluntary subscriptions of many people, the promise of each person is generally not held to be enforceable.

Accepted Answer

A) True 
 B)False

Question 7

Consideration can constitute financial or non-financial items.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true of the doctrine of promissory estoppel?

Accepted Answer

A)   It requires that promises made should be supported by consideration.
B)   It permits the promisor to claim lack of consideration when the promisee acts in reliance on his promise.
C)   It requires the promisor to reasonably expect the promise to induce action by the promisee.
D)   It holds enforcement to be proper if the promisee would not be harmed if the promise were not enforced.

Question 9

As a general rule, a promise must be supported by consideration. Which of the following is an exception to the rule and can be enforced without the support of consideration?

Accepted Answer

A)   A non-charitable enterprise financed by the subscriptions of individuals
B)   A promise to refrain from doing what one has no right to do
C)   An act performed prior to the promise made by the promisor
D)   An obligation of record such as a judgment

Question 10

When a new contract is replaced with an old one, it is mandatory for the added features to be equal for both parties for the contract to be enforceable.

Accepted Answer

A) True 
 B)False

Question 11

Blake has subscribed to a local charitable association where he needs to make a monthly payment of $100. However, a few months later, Blake stops paying this amount. Which of the following exceptions to the requirement of consideration will enforce that Blake pays the amount?

Accepted Answer

A)   Composition of creditors
B)   Voluntary subscriptions
C)   Forbearance to cancel monthly subscriptions
D)   Modification of sales contracts

Question 12

For a promise to constitute consideration, the promise must prevent imposing an obligation on the person making it.

Accepted Answer

A) True 
 B)False

Question 13

Performing or promising to perform what one is already obligated to do is a valid consideration.

Accepted Answer

A) True 
 B)False

Question 14

As a general rule, the adequacy of the consideration is irrelevant because the law allows bargains.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following best describes the term "consideration"?

Accepted Answer

A)   It refers to the record of a case sent for review to a higher court.
B)   It refers to the promisor refraining from meeting a promise.
C)   It signifies a promissory note given by the promisor as a token of the transaction.
D)   It indicates what the promisor demands and receives as the price for a promise.

Question 16

When one refrains or promises to refrain from doing something, this conduct is known as _____.

Accepted Answer

A)   duress
B)   forbearance
C)   negligence
D)   disaffirmation

Question 17

Mark owes $2000 each to his business partners, Ryan, Bryan, and Clark. Since Mark is facing financial difficulties, his business partners agree to accept a total amount of $4800 from Mark as a cancellation of the unpaid balance due to them. This type of an agreement is known as a _____.

Accepted Answer

A)   composition of creditors
B)   writ of certiorari
C)   forbearance
D)   promissory estoppel

Question 18

If the debt is evidenced by a note or other written evidence, cancellation and return of the written evidence cancels the debt.

Accepted Answer

A) True 
 B)False

Question 19

As a general rule, a promise must be supported by consideration. Describe any two exceptions to this rule.

Accepted Answer

Two exceptions to the requirement of consideration are: 1. Voluntary Subscriptions When charitable enterprises are financed by voluntary subscriptions of many people, the promise of each person is generally held to be enforceable. When a number of people make pledges to or subscribe to a charitable association or to a church, for example, the pledges or subscriptions are binding. Despite the fact that such promises lack the technical requirements of ordinary contracts, the courts in most states will enforce the promises as a matter of public policy
2. Promissory Estoppel Although not supported by considerations, courts enforce some promises on the basis of promissory estoppel. According to this doctrine, if one person makes a promise to another, and that other person acts in reliance on the promise, the promisor will not be permitted to claim lack of consideration. Enforcement is held to be proper when the promisor should reasonably expect to cause, and does cause, action by the promisee, and the promisee would be harmed substantially if the promise were not enforced. The theory has gained support as a means of realizing justice.

Question 20

If the supposed consideration consists merely of a promise to do what one is already legally obligated to do, consideration is invalid.

Accepted Answer

A) True 
 B)False

Exam 8: Consideration

Consideration distinguishes mere agreements from legally enforceable obligations.

Correct Answer
verified

The Uniform Commercial Code states that when a contract for the sale of goods is modified by agreement of the parties, consideration is necessary to make it enforceable.

Correct Answer
verified

Which of the following is true of the arrangement of composition of creditors?

Correct Answer
verified
C

Pledges made by people to charitable associations have no binding power by law.

Correct Answer
verified
False

Which of the following is an example of a valid consideration?

Correct Answer
verified

When charitable enterprises are financed by voluntary subscriptions of many people, the promise of each person is generally not held to be enforceable.

Correct Answer
verified

Consideration can constitute financial or non-financial items.

Correct Answer
verified

Which of the following is true of the doctrine of promissory estoppel?

Correct Answer
verified

As a general rule, a promise must be supported by consideration. Which of the following is an exception to the rule and can be enforced without the support of consideration?

Correct Answer
verified

When a new contract is replaced with an old one, it is mandatory for the added features to be equal for both parties for the contract to be enforceable.

Correct Answer
verified

Blake has subscribed to a local charitable association where he needs to make a monthly payment of $100. However, a few months later, Blake stops paying this amount. Which of the following exceptions to the requirement of consideration will enforce that Blake pays the amount?

Correct Answer
verified

For a promise to constitute consideration, the promise must prevent imposing an obligation on the person making it.

Correct Answer
verified

Performing or promising to perform what one is already obligated to do is a valid consideration.

Correct Answer
verified

As a general rule, the adequacy of the consideration is irrelevant because the law allows bargains.

Correct Answer
verified

Which of the following best describes the term "consideration"?

Correct Answer
verified

When one refrains or promises to refrain from doing something, this conduct is known as _____.

Correct Answer
verified

Mark owes $2000 each to his business partners, Ryan, Bryan, and Clark. Since Mark is facing financial difficulties, his business partners agree to accept a total amount of $4800 from Mark as a cancellation of the unpaid balance due to them. This type of an agreement is known as a _____.

Correct Answer
verified

If the debt is evidenced by a note or other written evidence, cancellation and return of the written evidence cancels the debt.

Correct Answer
verified

As a general rule, a promise must be supported by consideration. Describe any two exceptions to this rule.

If the supposed consideration consists merely of a promise to do what one is already legally obligated to do, consideration is invalid.

Correct Answer
verified

Exam 8: Consideration

Consideration distinguishes mere agreements from legally enforceable obligations.

Correct AnswerverifiedShow Answer

The Uniform Commercial Code states that when a contract for the sale of goods is modified by agreement of the parties, consideration is necessary to make it enforceable.

Correct AnswerverifiedShow Answer

Which of the following is true of the arrangement of composition of creditors?

Correct AnswerverifiedC

Pledges made by people to charitable associations have no binding power by law.

Correct AnswerverifiedFalse

Which of the following is an example of a valid consideration?

Correct AnswerverifiedShow Answer

When charitable enterprises are financed by voluntary subscriptions of many people, the promise of each person is generally not held to be enforceable.

Correct AnswerverifiedShow Answer

Consideration can constitute financial or non-financial items.

Correct AnswerverifiedShow Answer

Which of the following is true of the doctrine of promissory estoppel?

Correct AnswerverifiedShow Answer

As a general rule, a promise must be supported by consideration. Which of the following is an exception to the rule and can be enforced without the support of consideration?

Correct AnswerverifiedShow Answer

When a new contract is replaced with an old one, it is mandatory for the added features to be equal for both parties for the contract to be enforceable.

Correct AnswerverifiedShow Answer

Blake has subscribed to a local charitable association where he needs to make a monthly payment of $100. However, a few months later, Blake stops paying this amount. Which of the following exceptions to the requirement of consideration will enforce that Blake pays the amount?

Correct AnswerverifiedShow Answer

For a promise to constitute consideration, the promise must prevent imposing an obligation on the person making it.

Correct AnswerverifiedShow Answer

Performing or promising to perform what one is already obligated to do is a valid consideration.

Correct AnswerverifiedShow Answer

As a general rule, the adequacy of the consideration is irrelevant because the law allows bargains.

Correct AnswerverifiedShow Answer

Which of the following best describes the term "consideration"?

Correct AnswerverifiedShow Answer

When one refrains or promises to refrain from doing something, this conduct is known as _____.

Correct AnswerverifiedShow Answer

Mark owes $2000 each to his business partners, Ryan, Bryan, and Clark. Since Mark is facing financial difficulties, his business partners agree to accept a total amount of $4800 from Mark as a cancellation of the unpaid balance due to them. This type of an agreement is known as a _____.

Correct AnswerverifiedShow Answer

If the debt is evidenced by a note or other written evidence, cancellation and return of the written evidence cancels the debt.

Correct AnswerverifiedShow Answer

As a general rule, a promise must be supported by consideration. Describe any two exceptions to this rule.

If the supposed consideration consists merely of a promise to do what one is already legally obligated to do, consideration is invalid.

Correct AnswerverifiedShow Answer

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C

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False

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