CHAPTER 8—CONSIDERATION Key
1. Which of the following best describes the term “consideration”?
2. Which of the following is an example of a valid consideration?
3. 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 _____.
4. Which of the following is true of the arrangement of composition of creditors?
5. When one refrains or promises to refrain from doing something, this conduct is known as _____.
6. 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?
7. 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?
8. Which of the following is true of the doctrine of promissory estoppel?
9. Consideration distinguishes mere agreements from legally enforceable obligations.
10. Consideration can constitute financial or non-financial items.
11. For a promise to constitute consideration, the promise must prevent imposing an obligation on the person
making it.
12. As a general rule, the adequacy of the consideration is irrelevant because the law allows bargains.
13. If the debt is evidenced by a note or other written evidence, cancellation and return of the written evidence
cancels the debt.
14. Performing or promising to perform what one is already obligated to do is a valid consideration.
15. If the supposed consideration consists merely of a promise to do what one is already legally obligated to do,
consideration is invalid.
16. 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.
17. When charitable enterprises are financed by voluntary subscriptions of many people, the promise of each
person is generally not held to be enforceable.
18. Pledges made by people to charitable associations have no binding power by law.
19. 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.
20. As a general rule, a promise must be supported by consideration. Describe any two exceptions to this rule.