Business Law Today Standard Text & Summarized Cases 10th Edition By Roger LeRoy Miller – Test Bank

TRUE/FALSE QUESTIONS

1. Consideration is the value given in return for a promise.

ANSWER: T PAGE: 282 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

2. Forbearance is the act of refraining from doing something that one has a legal right to do.

ANSWER: T PAGE: 282 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

3. Adequacy of consideration refers to how much consideration is given.

ANSWER: T PAGE: 283 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

4. In general, courts consider the fairness of a contract when deciding if the contract is binding.

ANSWER: F PAGE: 283 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

5. Inadequate consideration always indicates undue influence.

ANSWER: F PAGE: 283 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

6. A preexisting duty may arise from a previous contract.

ANSWER: T PAGE: 284 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

7. Past consideration can be legally sufficient consideration.

ANSWER: F PAGE: 284 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

8. It is illegal for two parties to mutually agree to rescind a valid contract.

ANSWER: F PAGE: 284 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

9. An illusory promise is unenforceable.

ANSWER: T PAGE: 285 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

10. A release does not require consideration to be legally binding.

ANSWER: F PAGE: 286 TYPE: N
BUSPROG: Analytic LO: 11-2 BLOOM’S:Knowledge
DIF: Easy AICPA: BB-Legal

11. A covenant not to sue does not always bar further recovery.

ANSWER: T PAGE: 286 TYPE: N
BUSPROG: Analytic LO: 11-1 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

12. The doctrine of promissory estoppel does not apply if there exists a clear and definite promise.

ANSWER: F PAGE: 286 TYPE: N
BUSPROG: Analytic LO: 11-2 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

13. A minor may enter into a contract for the sale of alcoholic beverages if the other contractual party is an adult.

ANSWER: F PAGE: 288 TYPE: N
BUSPROG: Analytic LO: 11-3 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal

14. If a minor disaffirms a contract, he or she must disaffirm the entire contract.

ANSWER: T PAGE: 289 TYPE: N
BUSPROG: Analytic LO: 11-3 BLOOM’S: Knowledge
DIF: Easy AICPA: BB-Legal