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50. Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation,
Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to
charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct?
a. Marilyn will have to pay $20,000.
b. This is a contract under seal which is enforceable.
c. This is a modification of a preexisting contract, which under common law must be supported by additional
consideration on the part of Bravo Builders.
d. This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo
Builders.
51. Carlos ordered an aluminum storm door for $249.99. Before it was delivered, the same store from which he ordered
the door ran an ad in the paper for the same storm door at $179.99. Carlos calls the store and demands the
advertised price. If the store agrees:
a. Carlos must pay $179.99.
b. Carlos must pay $249.99.
c. there is no contract.
d. there is a contract for the reasonable value of the door.
52. Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck
and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay:
a. $50, since that is the original agreement.
b. $50, since a modification must be in writing.
c. $60, since the modified agreement is supported by additional consideration.
d. $60, since any subsequent agreement is enforceable.
53. Sue owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. She has
been offered a two-year graduate fellowship, but she will not be able to pay the loan back if she accepts the
fellowship. The bank manager tells Sue that if she pays $3,000 now, they will forgive the loan. Should Sue accept the
offer?
a. No, because the bank can still sue for the remaining $2,000
b. No, because the manager's promise is not binding on the bank
c. Yes, because the early payment of the loan is consideration that makes the bank's promise binding
d. Yes, because the bank must do whatever the manager says
54. Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was
installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing
more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable?
a. Yes, there is no way for the dealer to get the extra money anyway.
b. Yes, there is consideration for the modified amount.
c. No, there is no consideration and the dealer can sue for the extra $300.
d. No, there is an implied contract to pay the dealer whatever he billed Jack.
55. Wayne helped Hank study all night for an important exam. After Hank got an “A” on the exam, he told Wayne, "I
will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it." There is:
a. no contract because there is no mutual assent.
b. no contract because there is no valid consideration.
c. no contract because $10 is reasonably inadequate consideration.
d. a contract with sufficient consideration.
56. Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on November 1 at Howard’s house.
Which of the following would constitute legally sufficient consideration?
a. Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment to Rob’s house.
b. Rob comes to Howard’s house to collect the $75 on November 1, but Howard only has $50. Rob tells
Howard to forget the other $25.
c. Since this is an unliquidated debt, the only legally sufficient consideration is Howard’s payment of $75 to Rob
on November 1 at Howard’s house.
d. Since this is a liquidated debt, the only legally sufficient consideration is Howard’s payment of $75 to Rob on
November 1 at Howard’s house.
57. Which of the following are the two basic elements to consideration?
a. Bargained-for exchange and legal sufficiency
b. Legal detriment and legal benefit
c. Legal sufficiency and legal adequacy
d. Promise and forbearance
58. Which of the following is enforceable without consideration?
a. A new promise to pay a debt barred by the statute of limitations.
b. An illusory promise.
c. Under the common law, a promise made to satisfy a preexisting moral obligation.
d. A promise by a father to pay someone for rendering emergency services to his injured son before the father
had arrived at the accident scene.
59. Alice says to Brian, "If I decide to buy a word processor next year, I will buy it from you." This is an example of:
a. an illusory promise.
b. past consideration.
c. the pre-existing duty rule.
d. good consideration.
60. Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of
McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy
bought the lot and built the building as instructed, only to discover that McHenry had awarded the franchise to a
large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement is most
accurate?
a. McHenry is not liable to Nancy since there is no consideration.
b. McHenry is not liable to Nancy since there is past consideration.
c. McHenry is liable to Nancy since adequate consideration is given by both parties.
d. McHenry is liable to Nancy based on the concept of promissory estoppel.
61. Which of the following statements is most accurate concerning charitable subscription promises?
a. They are generally not enforceable.
b. The courts equate them with gifts.
c. They are generally enforceable if there is reliance by the charity.
d. The Restatement uses a strict reliance requirement in relation to charitable subscriptions.
62. Which of the following gratuitous promises is/are enforceable by statute?
a. A good-faith contract modification in a contract for the sale of goods
b. A written offer signed by a merchant to buy or sell goods that assures it will be kept open for one month
c. A renunciation of a claim in a written waiver that is signed and delivered by the aggrieved party when the
contract involves a sale of goods
d. All of these are enforceable by statute.
63. Which of the following will support a contract?
a. An illusory promise
b. Past consideration
c. Forbearance to do an act
d. A pre-existing public obligation
64. A purchaser’s agreement to buy from a particular seller all the materials of a particular kind he needs is a(n)
contract.
a. illusory
b. requirements
c. output
d. exclusive dealing
65. Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate,
which is currently being probated. She expects to know for sure how much she will receive within a week or so. In
this case:
a. this is an illusory contract, because Darla doesn't know whether she will receive the money for sure.
b. the consideration of the promise of $6,000 is insufficient because it is subject to a condition.
c. Darla's conditional promise is sufficient consideration unless Darla knows she cannot receive at least $6,000
from her uncle's estate.
d. There is no consideration.
66. Jason's mother would like him to go to college, so in June he enrolls at State University. He also quits his job and tells
his mother his plans to continue taking classes. His mother says, "I'm so happy that you are going to college that I
want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his
mother's promise?
a. It is enforceable, because Jason returned to college.
b. It is enforceable, because Jason is giving up the right to do something else.
c. It is unenforceable, because it is a unilateral contract.
d. It is unenforceable, because Jason had already enrolled in school and there is no consideration.
67. Which of the following requires consideration in order to be binding upon the parties?
a. A written promise by a merchant to keep an offer to buy goods open for 14 days
b. Material modification of a sale of goods contract under Article 2 of the UCC
c. Material alteration of a personal service contract
d. Settlement of a disputed debt
68. A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to
the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is
eligible?
a. The employees of the bank
b. An on-duty sheriff's deputy in the county where the arrest occurred
c. An off-duty deputy sheriff from a county other than the one where the arrest occurred
d. None of these are eligible.
69. In which of the following situations will a smaller sum be unable to discharge a larger debt?
a. If the smaller sum is paid before the due date of the larger debt.
b. If an additional article or service is given together with the payment of the smaller sum.
c. If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of
insolvency.
d. A smaller sum is never able to discharge a larger debt.
70. Andrew agrees to paint Betty's house for $500. Two days after he starts the job, he decides that $500 isn't enough
money. He refuses to finish the job unless Betty agrees to pay him $100 more. What law applies to this fact
situation?
a. The acceptance of additional money to settle a disputed claim is supported by consideration.
b. A past obligation is sufficient consideration for a new promise.
c. Andrew gives no additional consideration in return for modification of a preexisting contract.
d. Betty has made a promise in exchange for a forbearance.
71. William agrees to drill a well up to 200 feet deep for John's rural cabin. The contract price is $3,000. After drilling
100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and
could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it
will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is
anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well
is finished, he changes his mind and now says he will pay only the originally agreed-upon amount. In this case:
a. the parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay
the additional $1,000.
b. the substitute contract is binding under the UCC because there is the payment of additional money.
c. William is in breach of contract. John need not pay any additional money.
d. William is under a pre-existing moral duty to perform at the originally agreed-upon price.
72. Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay
off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage.
Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an
around-the-world cruise instead. In this case:
a. the doctrine of promissory estoppel can be applied.
b. the promise to pay $20,000 is a promise to give a gift and is therefore not enforceable.
c. under the Restatement, Barbara's promise is enforceable only if it is in writing.
d. Barbara's promise is not enforceable because the church did not give consideration.
73. Doug obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers
the entire State of Wisconsin for a period of three years. In this case:
a. Acme is obligated to use its best efforts to supply the goods only if this clause appears in the written franchise
agreement.
b. according to the UCC, unless otherwise agreed, Doug must use his best efforts to promote the sale of the
widgets in his territory.
c. under the UCC, such an agreement lacks consideration.
d. consideration is not required because this is a moral obligation.
74. Consideration:
a. must be given by the promisee to the promisor.
b. must be adequate.
c. may be given to the promisor or to some other person by the promisee or by some other person.
d. need not be equal between the parties, but must be proportionate.
75. The requirement of legally sufficient consideration:
a. is that the parties have agreed to an exchange and it imposed a legal detriment upon the promisee or
conferred a legal benefit upon the promisor.
b. has nothing to do with the legal value of what is exchanged.
c. means the subject matter that the parties agree to exchange has to have the same value.
d. is the same as the requirement of adequacy of consideration.
76. Ron owes Matt an unsecured debt of $3,000. Ron has a discharge of all his unsecured debts by a bankruptcy court.
Can the contract between Matt and Ron be reinstated?
77. Is a promise to pay a pre-existing moral obligation enforceable? Explain.
78.
a. How does Article 2 of the UCC change the common law with regard to consideration for a
contract modification?
b. Explain how output and requirements contracts differ from illusory promises.
79. Ken, a research chemist, has been promised a fellowship with a stipend of $10,000 to do research on synthetic fuel
oil. Under the terms of the fellowship, Ken is free to use the money as he sees fit. Ken decides to build his own
laboratory, so he will not have to rent one. He hires a carpenter who begins working on shelving and cabinets in the
laboratory. Then Ken receives a telegram saying the fellowship has been canceled. No reason is given for the
cancellation. If Ken sues, will he be able to collect the money from the foundation which promised the fellowship?
Explain your answer using legal terminology.
80. Define legal detriment.
81. Define a substituted contract and describe how it affects an agreement.
82. Define consideration.
83. What transactions are enforceable even though they are not supported by consideration?
