CHAPTER 12  - CONSIDERATION QUIZ

1. Aunt Annette and Nephew Ned both live in Louisiana where the drinking age is 18. Annette is concerned that Ned, who is 19, will get into trouble if he drinks while he is still a young man. She offers to pay him $1,000 if he will promise not to drink until he is 21. Ned agrees, and abstains from drinking until his 21st birthday, when he downs 11 "tequila fanny-bangers" at a local bar. After he sobers up, can he force his aunt to pay him the $1000?

a. yes, because he committed a legal act that is valid consideration
b. yes, because his forbearance constitutes valid consideration
c. no, because he violated the spirit of the agreement by getting drunk on his 21st birthday
d. no, because he gave no legal consideration.

2. Bert says to Ernie, "In consideration of you being such a swell guy, I'm going to give you $100." Is there consideration sufficient to enforce this promise?

a. yes, because he has promised to commit an act
b. yes, because he has promised to forbear
c. yes, because Bert specifically used the word "consideration"
d. no


3. If Brad wins an equitable lawsuit on the grounds that a contract is unconscionable, what are his possible remedies?

a. monetary damages equal to his lost profits
b. monetary damages equal to the difference between what was paid and fair market value
c. an injunction
d. both B and C


4. Skeeter signs an insurance contract with Big National Insurance. When he discovers that his premiums are extremely high for the type of coverage he is receiving, he tries to back out of his agreement on the grounds that he signed an adhesion contract. Which of the following factors make it more likely that the agreement was, in fact, an adhesion contract?

a. Skeeter signed the contract as it was presented to him without having an opportunity to bargain.
b. Skeeter had little choice in signing the contract because only Big National would offer him coverage.
c. both A and B
d. none of the above

5. Annette and Ned live in Texas where the drinking age is 21. Annette is concerned that Ned, who is 19, will get into trouble if he drinks while he is still a young man. She offers to pay him $1,000 if he will promise not to drink until he is 21. Ned agrees, and abstains from drinking until his 21st birthday, when he downs 11 "tequila fanny-bangers" at a local bar. After he sobers up, can he force his aunt to pay him the $1000?

a. yes, because he committed a legal act that is valid consideration
b. yes, because his forbearance constitutes valid consideration
c. no, because he violated the spirit of the agreement by getting drunk on his 21st birthday
d. no, because he gave no legal consideration

6. The Centennial Apartments catch fire. Irene Idiot hears her fire alarm go off and rushes out of the building. Sadly, she has left her baby, Iggy Idiot, inside. Fireman Frank rushes to the scene, and Ned Neighbor watches the action from across the street. Irene yells, "I'll give $500 to anyone who saves my baby." If Fireman Frank rescues the baby, can he compel Irene to pay him the $500 reward?

a. no, because he had a preexisting duty
b. no, because the promise was illusory
c. no, because he cannot enforce a promise based on past consideration
d. yes

7. The Centennial Apartments catch fire. Irene Idiot hears her fire alarm go off and rushes out of the building. Sadly, she has left her baby, Iggy Idiot, inside. Fireman Frank rushes to the scene, and Ned Neighbor watches the action from across the street. Irene yells, "I'll give $500 to anyone who saves my baby." If Neighbor Ned rescue the baby, can he collect the reward?

a. no, because he had a preexisting duty
b. no, because the promise was illusory
c. no, because he cannot enforce a promise based on past consideration
d. yes

8. The Centennial Apartments catch fire. Irene Idiot hears her fire alarm go off and rushes out of the building. Sadly, she has left her baby, Iggy Idiot, inside. Irene yells, "I'll give $500 to anyone who saves my baby." Paul Passerby walks by after Irene yells her promise. He is very brave, and rescues little Iggy. Irene is so happy, she repeats her promise to him and says, "I'm going to give you $500 for saving my baby." Can he force Irene to give him the reward?

a. no, because he had a preexisting duty
b. no, because the promise was illusory
c. no, because he cannot enforce a promise based on past consideration
d. yes


9. Tommy gets ripped off by a used car dealer. He pays $3,000 for a used Dodge, and later learns that the fair market value of the car is only $2,200. Is it likely that he will be able to sue to get his money back?

a. yes, because the dealer gave insufficient consideration
b. yes, because the contract is unconscionable
c. yes, because he signed an illusory contract
d. no

10. Frank has a long-term contract to wash trucks for the City of Seattle. After a year, soap prices increase, making Frank's prices increase by 5%. He informs the City that he will stop washing trucks unless they agree to pay him an extra 5%. The City agrees. Is this modification valid?

a. yes, because there was no coercion
b. yes, because the price increase was unforeseen
c. no, because a contract can never be modified without new consideration
d. no, because Frank had a preexisting duty to wash the cars

11. Frank has a long term contract to wash trucks for the City of Seattle. A drought has struck. In order to use enough water to wash all of the City's trucks, Al has to import water. This makes his costs rise 100%. If he renegotiates his contract with the city, and the city agrees to double his pay, is the new agreement valid?

a. yes, because there was no coercion
b. yes, because this was an unforeseen difficulty
c. no, because a contract can never be modified without new consideration
d. no, because Frank had a preexisting duty to wash the cars

12. Josie publishes books for Barnes and Noble. Paper and ink account for 60% of her costs. Paper costs increase, and her costs rise by 25%. She asks Barnes and Noble to increase payments to her by 25%, and they agree. Is this modification valid?

a. yes, because the increase was an unforeseen difficulty
b. yes, regardless of whether the increase was an unforeseen difficulty
c. no, because the increase is too small
d. no, because she had a preexisting duty


13. Which of the following is an illusory promise?

a. a promise to buy "as many as desired"
b. a promise to buy "as many as needed"
c. a promise to buy "30 units"
d. a promise to buy "units for one year, cancelable on 30 days notice"
Clarks14 Ch 14 #13 (MC #13)

14. Bill and Ted are in a dispute over a contract they entered into. Bill agreed to mow Ted's lawn for $20 and did so. After the work was done, Ted claimed that Bill did a lousy job, and should only be paid $10. After some argument, Ted says, "Alright, I'll pay you $15." Ted's statement is a(n)

a. accord
b. satisfaction
c. offer
d. acceptance

15. Which of the following is the most likely to be an unliquidated debt?

a. a restaurant bill for $30
b. a $300 bill from sears for the price of a lawn mower
c. an overdue rent payment of $550
d. a bill for a $220 auto repair, when no price was discussed beforehand


16. Alice and Betty have an unliquidated debt between them for $500. Alice writes Betty a check for $350 and writes "paid in full" on the front of the check. Betty cashes the check. In a majority of states, how much, if any, may Betty recover from Alice at this point?

a. $0
b. $150
c. $350
d. $500


17. Alice and Betty have a liquidated debt between them for $500. Alice writes Betty a check for $350 and writes "paid in full" on the front of the check. Betty cashes the check. In a majority of states, how much, if any, may Betty recover from Alice at this point?

a. $0
b. $150
c. $350
d. $500


18. Mike and Ike are in a car wreck. Ike convinces Mike to sign a release in exchange for $50. Later, Mike learns that his injuries will require surgery costing $5,000. How much can Mike likely recover from Ike?

a. $0
b. $4,950
c. $5,000
d. None of the above

19. Mike and Ike are in a car wreck. Ike tricks Mike, who is still disoriented from the wreck, into signing a release. Later, Ike learns that his injuries will require surgery costing $5,000. How much can Mike likely recover from Ike?

a. $0
b. $2,500
c. $5,000
d. none of the above

20. Which of the following must be present for a court to apply the doctrine of promissory estoppel?

a. a clear and definite promise
b. reliance by the plaintiff
c. reliance of a substantial and definite character
d. all of the above

21. Alex owes Ben $1,000, and has owed this debt for 10 years. The statute of limitation for debt collection in Ben's state is five years. How much of this debt can Ben recover in court?

a. $1,000
b. $500
c. $0
d. none of the above

22. Alex owes Ben $1,000, and has owed this debt for 10 years. The statute of limitation for debt collection in Ben's state is five years. Ben called Alex yesterday to remind him of the debt, and Alex apologized for the delay in payment and promised to send a check right away. If the check never arrives, how much of this debt can Ben recover in court?

a. $1,000
b. $500
c. $0
d. none of the above


23. Which of the following is a promise most likely to be enforced even if it is not supported by consideration?

a. a promise to purchase a car
b. a promise to rent a car
c. a charitable pledge
d. an order of a pizza

24. Which of the following is evidence of legally valid consideration?

a. a benefit to the promisor
b. a benefit to the promisee
c. a detriment to the promisor
d. all of the above

25. Mike and Ike are in a car wreck. Mike signs a covenant not to sue, which says Ike will pay for the repair work on Mike's car. Ike does not pay for the repairs, which will cost $10,000. How much is Mike likely to recover in this case?

a. $0
b. $5,000
c. $10,000
d. $20,000