Understanding Business and Personal Law

Chapter 8: Consideration

Consideration

1.
The use of a seal in the sale of goods
A)varies from state to state.
B)is required in all states except Louisiana.
C)has been eliminated by the UCC.
D)indicates that the contract is protected from discharge in bankruptcy.
2.
If the parties to a contract cannot agree to the actual amount owed, the amount is said to be
A)an accord without satisfaction.
B)an unclaimed debt.
C)an accord and satisfaction.
D)in dispute.
3.
One of the key characteristics of consideration is
A)an illusory promise.
B)that something of value must be involved.
C)an estoppel that will always be enforceable.
D)a promise under a seal.
4.
Barter agreements that involve goods and services instead of money are said to have no consideration.
A)TRUE
B)FALSE
5.
If a person who has had his or her debts discharged in bankruptcy chooses to continue paying the debt, new consideration must be provided.
A)TRUE
B)FALSE
6.
The courts enforce charitable pledges just as if they were contracts.
A)TRUE
B)FALSE
7.
An agreement to meet a friend for dinner is not legally binding because
A)the friend has given nothing in exchange for the promise.
B)social engagements are considered illusory promises.
C)there is no signed firm offer.
D)it is a promise for a future event.
8.
The act of consideration must occur when the contract is made. Past consideration is not regarded as legal by the courts.
A)TRUE
B)FALSE
9.
A security guard who catches a criminal while on duty is not entitled to a reward because
A)there was no promise made by the security guard to catch the criminal.
B)the security guard is already required by law to provide this service.
C)there is no contractual capacity between the security guard and the person who offered the reward.
D)the statute of limitations does not apply.
10.
Under the doctrine of promissory estoppel, a promise may be enforceable without consideration.
A)TRUE
B)FALSE
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