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Exam 10: Consideration

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Question 31

Multiple Choice

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Dale's Uncle Ed tells Dale, "If I feel you deserve it at the time, I will give you a new car when you graduate from college." Ed's promise is

A) illusory.
B) enforceable.
C) a forbearance.
D) a preexisting duty.

E) All of the above
F) C) and D)

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Question 32

True/False

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A release enables recovery beyond that specified in its terms.

A) True
B) False

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Question 33

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Centre City Properties, Inc., owns and manages a warehouse. DIY Home Improvement Stores agrees to lease the warehouse for six years. Under the lease, DIY is obligated to pay all of the utility costs. Two years into the term, DIY asks Centre City to modify the lease to provide that the utility costs will be split equally between them. The landlord agrees, but later decides it does not want to share the costs and refuses to pay. Is Centre City bound to its agreement to share the utility costs? Why or why not?

Maria is the sheriff of Narez, Texas. Oscar robs a Narez gas station and a $500 reward is offered for his capture. When, later, Maria finds and arrests him, with respect to the reward, she can

Forfeiting a right to sue to recover further damages can constitute consideration.

Fact Pattern 10-2 Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan-was unfair because the consideration for the contract was inadequate. Refer to Fact Pattern 10-2. With respect to Brad's defense, the court will most likely

In general, courts question the adequacy of consideration.

Rose questions whether there is consideration for her contract to perform with Saxophone Symphony. To constitute consideration, there must be

A fire threatens to engulf a commercial building in Metro City. The building's owner promises a cash reward to the Metro Fire Department to extinguish the fire. The firefighters cannot claim the reward because

An illusory promise is a promise that is enforceable without consideration.

Exceptions to the preexisting duty rule include unforeseen difficulties.

Greta files a suit against Home Repair Corporation under the doctrine of promissory estoppel. Greta must show that

Risks ordinarily assumed in business constitute consideration for the modification of a contract.

Fact Pattern 10 - 3 Best Restoration, Inc., begins renovating houses for City Edge Property Company under a contract for a stated amount per house. After six months, Best demands an extra $20,000 per house. City Edge agrees to pay. Refer to Fact Pattern 10 - 3. Suppose Best asks for the extra $20,000 because ordinary business expenses have increased. The agreement is

When the doctrine of promissory estoppel is applied, the promisor is estopped, or barred, from performing the promise.

Two parties can mutually agree to rescind a contract at least to the extent it is executory.

Situations in which agreements lack consideration include those involving a preexisting duty.

Fact Pattern 10 - 3 Best Restoration, Inc., begins renovating houses for City Edge Property Company under a contract for a stated amount per house. After six months, Best demands an extra $20,000 per house. City Edge agrees to pay. Refer to Fact Pattern 10 - 3. Suppose Best asks for the extra $20,000 because of extraordinary difficulties that were totally unforeseen at the time the contract was formed. The agreement is

Allen promises to pay Barb, his niece, $5,000 if she obtains her degree at City University, where she is in her third year. Barb graduates. Allen is

Frank offers to buy a guitar owned by Holly for twice what she paid for it. She accepts and hands the guitar to Frank. Holly's delivery of the guitar is