Sam promises his uncle, Bob, that he will lose 10 pounds and exercise every day during the spring semester

Consideration is optional in every contract. 
FALSE

In a bilateral contract, the consideration for a promise is a completed act. 
FALSE

An exception to the rule requiring consideration is promissory estoppel. 
TRUE

An illusory promise is not a consideration. 
TRUE

As a general rule, past consideration qualifies as consideration. 
FALSE

In some cases, if past consideration was given with expectation of future payment, the court may enforce the promise. 
TRUE

A promise to do something that you are already obligated to do is generally a valid consideration. 
FALSE

The UCC permits requirement, but not output, contracts for the sale of goods. 
FALSE

Partial payment of a debt may or may not be valid consideration, depending on whether the debt is liquidated or unliquidated. 
TRUE

A liquidated debt may be the subject of an accord and satisfaction. 
FALSE

Which of the following is what a person will receive in return for performing a contract obligation? 
A. Consideration
B. Acknowledgement
C. Approval
D. Accord
E. Accession

Sam promises his uncle, Bob, that he will lose 10 pounds and exercise every day during the spring semester in exchange for having his tuition paid for the fall semester. The uncle agrees; but after Sam has lost 10 pounds and exercised all semester, Bob refuses to pay saying that no contract existed. Which of the following is true? 
A. Consideration was present, there was an enforceable contract, and Bob has wrongfully refused to pay.
B. There was no consideration present, and Bob has no obligation to pay.
C. There was no consideration present, but Bob must pay under principles of promissory estoppels.
D. There was consideration present, but Bob is not required to pay because the contract was illusory.
E. There was consideration present, but Bob is not required to pay because Bob did not receive a benefit personally.

Which of the following are examples of consideration? 
A. A benefit to the promisor.
B. A promise to do something.
C. Both a benefit to the promisor and a promise to do something.
D. An accepted offer.
E. A valid counteroffer.

In a bilateral contract, the consideration for each promise is ____. 
A. A completed act
B. The beginning of action in acceptance, even if it is not complete
C. An acknowledgement
D. A return promise
E. An agreement

In a unilateral contract, the consideration for a promise is ____. 
A. Action
B. A return promise
C. An acknowledgement
D. Consideration
E. An agreement

Which of the following is an exception to the rule requiring consideration? 
A. Promissory agreement
B. Promissory estoppel
C. Quasi estoppel
D. Quasi agreement
E. Promissory performance

Which of the following occurs when three conditions are met: one party makes a promise knowing the other party will rely on it; the other party does rely on it; the only way to avoid injustice is to enforce the promise? 
A. Promissory agreement
B. Promissory estoppel
C. Quasi estoppel
D. Quasi agreement
E. Promissory performance

What did the court rule in the case in the text, Labriola v. Pollard Group, Inc., regarding whether the noncompete agreement at issue in the case was enforceable? 
A. The court ruled that the noncompete agreement was enforceable because the employee received independent consideration for it in the form of increased wages.
B. The court ruled that the noncompete agreement was enforceable because the employee received independent consideration for it in the form of a fixed term of employment.
C. The court ruled that the noncompete agreement was enforceable because the employee received independent consideration for it in the form of a promotion.
D. The court ruled that the noncompete agreement was not enforceable because the employee did not receive the consideration agreed upon.
E. The court ruled that the noncompete agreement was not enforceable because of lack of consideration.

Which of the following would not be considered an example of consideration? 
A. A promise to stay in a job until a particular project is completed.
B. A promise to your football coach to refrain from riding your motorcycle during football season even though you love riding it.
C. A promise to cook dinner for your roommate for the next six months.
D. A promise to stop drinking alcohol during exam week.
E. A promise to pay your employees as required by law.

Which of the following is true regarding the adequacy of consideration? 
A. Courts generally consider the adequacy of consideration in determining whether to enforce a contract.
B. Courts consider the adequacy of consideration only if something is sold for less than 90% of its market value.
C. Courts consider the adequacy of consideration only if something is sold for less than 80% of its market value.
D. Courts consider the adequacy of consideration only if something is sold for less than 70% of its market value.
E. Courts seldom consider the adequacy of consideration but will do so if fraud is involved.

As discussed in the case of Double AA builders, Ltd. v. Grand State Construction L.L.C., which of the following may be used to necessitate that a subcontractor perform according to the terms of its bid because the contractor has relied on the subcontractor's bid? 
A. Consideration
B. Primary consideration
C. Promissory estoppel
D. Reality estoppel
E. Secondary consideration

Which of the following is false under the law in England? 
A. England has requirements for consideration.
B. England does not recognize the exception of promissory estoppel.
C. In England, specialty contracts or deeds are an additional exception to the requirement for consideration.
D. In England, deeds are used to create enforceable promises of gifts to charity.
E. In England, a deed is a document that creates a binding obligation between parties without consideration when certain formalities are honored.

Which of the following is true regarding illusory promises? 
A. Illusory promises are not consideration.
B. Illusory promises are consideration.
C. Illusory promises qualify as consideration only when past consideration is at issue.
D. Illusory promises qualify as consideration only when promissory estoppel is at issue.
E. Illusory promises are consideration only when a sale of goods is involved.

Sam offers Betty his bicycle for $75. Which of the following is an example of an illusory promise on the part of Betty? 
A. "I'll take it."
B. "I'll take it if I decide to do so."
C. "I won't pay $75, but I will pay $50."
D. "I'll take it if you will let me try it out first and the brakes work well."
E. "I'll take it if you will buy new tires."

For a court to enforce a promise, ______ must offer consideration. 
A. Only the offeror
B. Only the offeree
C. Only the acceptee
D. Only the acceptor
E. Both sides

Which of the following was the result in the Case Opener in which the attorney sued to recover the value of 3 percent of the defendant's stock based on the fact that he provided a loan to the defending company, and the directors later promised the stock to him? 
A. The court ruled that the attorney was not entitled to the value of the stock because it was offered as a gift.
B. The court ruled that the attorney was entitled to the value of the stock because it was offered as a gift.
C. The court ruled that the attorney was entitled to the value of the stock because it was consideration provided by the company.
D. The court ruled that the attorney was entitled to the value of the stock based on promissory estoppels.
E. The court ruled that the attorney was entitled to the value of the stock both because it was consideration provided by the company and also based on promissory estoppels.

Under the ____, promises based on past consideration may be enforceable to the extent necessary to avoid injustice. 
A. Restatement (Second) of Contracts
B. Uniform Commercial Code
C. Restatement (Second) of Remedies
D. Common law
E. Civil law

A promise to do something that you are already obligated to do is ____. 
A. Valid consideration because it is illusory consideration
B. Valid consideration only in the employment context
C. Valid consideration because it is past consideration
D. Valid consideration only if a sale of goods is involved
E. Not valid consideration

What does the preexisting duty rule mean? 
A. Performance of a duty one is obligated to do under the law is not good consideration.
B. Performance of an existing contractual duty is not good consideration.
C. A bilateral contract is not binding without past consideration.
D. Performance of a duty one is obligated to do under the law is not good consideration, and performance of an existing contractual duty is not good consideration.
E. Performance of an existing contractual duty is not good consideration, and a bilateral contract is not binding without past consideration.

Yolanda agrees to bathe and groom Wendy's dog, Fluffy Puff, for $30. Yolanda agreed to the price before seeing Fluffy Puff who is a chubby dog with lots of hair. Yolanda tells Wendy that if she is going to groom Fluffy Puff, the price will be $40. Wendy reluctantly agrees but tells Yolanda that she should not have been surprised that a dog named Fluffy Puff had lots of hair. Yolanda bathes and grooms Fluffy Puff, but Wendy will only pay $20. Which of the following is correct regarding Yolanda's entitlement to the extra $10? 
A. Yolanda is entitled to the extra $10 because a valid bilateral contract existed.
B. Yolanda is entitled to the extra $10 because a valid unilateral contract existed.
C. Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because she had a preexisting duty to bathe and groom Fluffy Puff for $30.
D. Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because Wendy's promise to pay $30 was illusory.
E. Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because past consideration was involved.

Which of the following are exceptions to the preexisting duty rule? 
A. Unforeseen circumstances only.
B. Additional work only.
C. Past consideration only.
D. Unforeseen circumstances and additional work, but not past consideration.
E. Unforeseen circumstances, additional work, and past consideration.

Sally goes to have her hair trimmed and agrees to pay $40 to the stylist. While there, Sally decides that she would also like highlights. The stylist informs her that highlights will cost an additional $30. Sally agrees to the price, gets the highlights, but refuses to pay the extra amount. What is the likely result in a dispute between Sally and the stylist and why? 
A. The stylist will win because she did additional work in exchange for the extra payment; and, therefore, Sally's promise was supported by valid consideration.
B. The stylist will win because she did additional work in exchange for the extra payment; and, therefore, a valid unilateral contract existed.
C. The stylist will win unless Sally can show that she had previously received both a trim and highlights for $40. If she can prove that she previously received both for $40, then the past expectations rule applies.
D. Sally will win because the stylist had a preexisting duty to have Sally's hair look as good as possible.
E. Sally will win because there was no valid consideration in exchange for the highlighting.

Under Article ______ of the UCC, an agreement modifying a contract needs no consideration to be binding. 
A. One
B. Two
C. Three
D. Five
E. None of the above. There is no such rule in the UCC.

Sam, who has a retail clothing store, orders 50 white shirts from XYZ manufacturer. He later calls a representative of XYZ and requests that blue shirts be sent instead. The representative agrees and sends a confirmation. Sam gets white shirts and complains. The XYZ representative says there was no consideration for the contract. Which of the following is the correct resolution of the dispute? 
A. Sam is correct because under the UCC, no additional consideration was needed.
B. Sam is correct because a valid unilateral contract existed.
C. The XYZ representative is correct because no additional consideration was provided.
D. The XYZ representative is correct because no valid bilateral contract existed.
E. The XYZ representative is correct because no additional consideration was provided, and no valid bilateral contract existed.

Mary has a pet shop and orders 50 packages of dog food for puppies from a supplier for a total cost of $1,000. Later she calls the supplier and changes the order to food for adult dogs. When 50 packages of puppy food arrive, Mary complains. The supplier tells her that the modification was not valid because nothing was put in writing. Mary says there was never an agreement that a writing was necessary for a modification. Which of the following is the correct resolution of the dispute? 
A. The supplier is correct because modification of orders of over $200 must be in writing.
B. The supplier is correct because modification of orders of over $500 must be in writing.
C. The supplier is correct because modification of orders of over $600 must be in writing.
D. The supplier is correct because modification of orders of over $800 must be in writing.
E. Mary is correct because under the circumstances, there was no requirement of a writing to modify the agreement.

A _____ contract is an agreement whereby the buyer agrees to purchase all goods from one seller. 
A. Supply
B. Use
C. Requirement
D. Output
E. Arranged

A/an _____ contract is an agreement whereby the seller guarantees to sell everything he or she produces to one buyer. 
A. Supply
B. Use
C. Requirement
D. Output
E. Arranged

Which of the following is true of a requirement contract under common law? 
A. It is valid so long as there is a writing setting forth the terms signed by the offeror.
B. It is valid so long as there is a writing setting forth the terms signed by the offeree.
C. It is valid so long as there is a writing setting forth the terms signed by the offeror and the offeree.
D. It is valid so long as more than nominal consideration is provided.
E. It is not valid because of the lack of consideration.

Which of the following is true of an output contract under common law? 
A. It is valid so long as there is a writing setting forth the terms signed by the offeror.
B. It is valid so long as there is a writing setting forth the terms signed by the offeree.
C. It is valid so long as there is a writing setting forth the terms signed by the offeror and the offeree.
D. It is valid so long as more than nominal consideration is provided.
E. It is not valid because of the lack of consideration.

Which of the following is true of a requirement contract under the UCC? 
A. It is valid so long as the requirement is made in good faith.
B. It is valid so long as there is a writing setting forth the terms signed by the offeree.
C. It is valid so long as there is a writing setting forth the terms signed by the offeror and the offeree.
D. It is valid so long as more than nominal consideration is provided.
E. It is not valid because of the lack of consideration.

Which of the following is true of an output contract under the UCC? 
A. It is valid so long as the output is made in good faith.
B. It is valid so long as there is a writing setting forth the terms signed by the offeree.
C. It is valid so long as there is a writing setting forth the terms signed by the offeror and the offeree.
D. It is valid so long as more than nominal consideration is provided.
E. It is not valid because of the lack of consideration.

Which of the following is true regarding whether an accepted offer to pay part of a debt is consideration? 
A. Partial payment is consideration under all circumstances.
B. Partial payment is not consideration under any circumstances.
C. Partial payment is consideration if a liquidated debt is involved.
D. Partial payment is consideration if an unliquidated debt is involved.
E. Partial payment is consideration if either a liquidated or an unliquidated debt is involved.

In a[n] ______ debt, there is no dispute about the fact that money is owed and the amount of money owed. 
A. Actual
B. Acknowledged
C. Certain
D. Liquidated
E. Unlilquidated

In a[n] ______ debt, the parties either dispute the fact that any money is owed or agree that some money is owed but dispute the amount. 
A. Disputed
B. Unacknowledged
C. Uncertain
D. Liquidated
E. Unliquidated

Which of the following represents an accord and satisfaction? 
A. When a dispute over an unliquidated debt is settled and paid for less than the full amount.
B. When a dispute over a liquidated debt is settled and paid for less than the full amount.
C. When a dispute over an unliquidated debt is settled and paid for the full amount.
D. When a dispute over a liquidated debt is settled and paid for the full amount.
E. When a dispute over either an unliquidated or liquidated debt is settled and paid for less than the full amount.

When an accord and satisfaction is at issue, the ______ is the new agreement to pay less than the creditor claims is owed. 
A. Satisfaction
B. Accord
C. Both satisfaction and accord
D. Written compromise
E. Written acknowledgement

When an accord and satisfaction is at issue, the ______ is the payment, by the debtor, of the reduced amount. 
A. Satisfaction
B. Accord
C. Both satisfaction and accord
D. Fund transfer
E. Bond

Which of the following is true regarding an accord and satisfaction? 
A. When amounts agreed upon are paid, the debt is fully discharged.
B. When amounts agreed upon are paid, the debt is fully discharged except for any late charges due on the initial indebtedness.
C. When amounts agreed upon are paid, the debt is fully discharged except for any interest due on the initial indebtedness.
D. When amounts agreed upon are paid, the debt is fully discharged except for any late charges and any interest due on the initial indebtedness.
E. When amounts agreed upon are paid, the debt is fully discharged except for any late charges or interest due on the initial indebtedness, or attorney fees of the creditor that are due.

Which of the following is true under the UCC regarding checks marked "paid-in-full"? 
A. If a business inadvertently cashes such a check, the business has 30 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
B. If a business inadvertently cashes such a check, the business has 60 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
C. If a business inadvertently cashes such a check, the business has 90 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
D. If a business inadvertently cashes such a check, the business has 120 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.
E. The business has no recourse, and the debt is deemed discharged and satisfied.

Which of the following was the result in the case Mast Long Term Care v. Forest Hills Rest Home, covered in the Case Nugget, in which the defendant rest home claimed it was not bound by an agreement to buy all its drugs not commonly stocked from the plaintiff? 
A. The agreement was not enforceable because no price schedule was agreed upon.
B. The agreement was not enforceable because it was an output contract.
C. The agreement was not enforceable because it was a requirement contract.
D. The agreement was enforceable based on promissory estoppel although consideration was lacking for a binding contract.
E. The agreement contained sufficient consideration on the part of the plaintiff and defendant.

In return for his oral promise to pay her $100, Penny promises her uncle that she will not violate laws against speeding for one year. Penny abides by her promise, but her uncle refuses to pay. Which of the following is true regarding whether Penny is entitled to the money?

Penny is not entitled to recover because she had a preexisting duty to obey laws against speeding.

Tina, an experienced pool contractor, and Bruce agree on a price for Tina to build a pool in Bruce's backyard. While the area is not known for rocks, unfortunately Tina unexpectedly encounters a significant problem with solid rock in the backyard when she starts to dig. She tells Bruce that unless she receives an extra $5,000, she cannot complete the job. Bruce agrees thinking to himself that he has a way out. When Tina finishes the pool, Bruce refuses to pay the additional $5,000. Which of the following is the most likely result of their dispute?

Bruce will be required to pay because unforeseen circumstances are an exception to the preexisting duty rule.

Sue is three months behind on her mortgage, and her lender filed negative information affecting her credit rating. Sue mailed one monthly payment to the lender along with a letter providing that she was making the payment on condition that the lender removes negative material sent to credit reporting agencies affecting her credit rating. The lender cashed the check but did not remove the negative information. Sue sues the bank for breach of contract. Which of the following is the most likely result?

The bank will win because under the preexisting duty rule, Sue was already legally obligated to make the payment, and there was no consideration to support the contract.

Which of the following was involved when the government, in attempting to help AIG, agreed with AIG to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock? A bilateral contract

Which of the following is true regarding the rating the World Bank gives China in relation to the ease of doing business there? China is rated in the top 10.