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Exam 12: Consideration

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Question 21

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Mr.White contracts with his wife Ms.White to watch their kids,Joe and Jimmy,for $50 for night.What is the status of the contract between Mr.Smith and Ms.White?

A) There is no contract because Ms.White gave inadequate consideration
B) There is a contract as long as Mr.White registers the contract with the Secretary of State
C) There is a contract as long as $50 is a reasonable profit for watching the kids
D) There is a contract as long as a court reviews the terms within 30 days

E) B) and C)
F) B) and D)

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Question 22

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Mr.Green is a local mobster who makes Mr.Blue pay $100 not to have his business burned to the ground.What is the status of the contract between Mr.Green and Mr.Blue?

A) There is no contract because Mr.Green gave inadequate consideration
B) There is a contract as long as Mr.Green registers the contract with the Secretary of State
C) There is a contract as long as $100 is a reasonable profit for not burning down the business
D) There is a contract as long as a court reviews the terms within 30 days

E) All of the above
F) A) and B)

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Question 23

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Mr.Green agrees to purchase a lawn mower from Ms.White for $300.The act of payment of $300 by Mr.Green is consideration for the act of passing ownership of the lawn mower from Ms.White to Mr.Green.

Patricia has requested extra payment because abnormal subsurface rock formations made excavation on the construction site far more costly and time-consuming than could have been reasonably expected.The court will:

Which of the following is a relevant consideration?

Michael and William contracted for Michael to mow William's lawn once a week for 20 weeks,at a price of $20 per week.Later,without terminating the first contract,the parties modify the contract as follows: Michael will mow William's lawn in exactly the same way for exactly the same time period,in exchange for William's promise to pay Michael $22 per week.There is no consideration for William's promise.

Daniel owes Casey a debt,the amount of which is subject to a good faith dispute.The parties agree to settle the debt,with Daniel promising to pay Casey $15,000 and Casey promising to release Daniel on a $25,000 debt.The settlement agreement:

Historically free made promises were not enforced unless they had what supporting them?

A promise not to sue another party is not consideration,because the promise does not convey any legal value to the other party.

In determining whether consideration exists,the law is not concerned with any disproportion in value between the things exchanged in a contract.

Sigmund enters into a contract with Carl.The terms are that Sigmund will purchase all the gasoline that he wants to purchase in 2011,at a price of $2.50 per gallon,and Carl agrees to sell on those terms.This is an example of a(n) :

Which of the following is true of consideration?

Chica,a women's clothing store,held a "prize drawing" for a $500 shopping spree on Saturday that it had advertised throughout the week.Participation in the drawing required being at the store by noon and completing an application form that included personal information and placing it in a box.The information would then be put into a database for marketing purposes.Fashion consultants offering merchandise for sale greeted customers arriving at the store on Saturday morning.Joy was the winner of the drawing.Has she given consideration for the prize?

UCC covers accord and satisfaction by the use of an instrument called "full payment" check.

Dan,President of BAZ Co. ,is happy with the extraordinary performance of Naomi,a BAZ Co.senior accountant.Dan informs Naomi that because of her superlative work in the past fiscal year,he is going to give her a 5 percent raise effective next month.Naomi,who has never heard of anyone at BAZ Co.getting a raise,is thrilled and thanks Dan.Later that day,Dan realizes that giving Naomi this raise might cause all senior accountants to demand salary increases.Dan decides not to give Naomi a raise after all.He believes that his promise to give her a raise is not legally binding.Dan is correct because:

Which of the following meets the requirements of consideration?

A promise to refrain from smoking can be legal consideration because refraining from a legal right,the right to smoke,can be consideration.

Which of the following is often used by agreements that try to make gratuitous promises look like true bargains?

Able borrowed $10,000 from Baker,promising to return it with $1,000 interest on January 1,2006.There is no dispute that Able owes Baker $11,000 due on January 1,2006.On that day,Able gave Baker a valid check in the amount of $10,500 marked "payment in full for loan due January 1,2006." Baker accepted that check and deposited it into his account.If Baker then sues Able for the unpaid $500,what would the result be?

Gross inadequacy of consideration is by itself a sufficient reason to set aside a contract.