Cengage Advantage Books Essentials Of Business Law 4th Edition By Beatty – Test Bank

CHAPTER 11 – CONSIDERATION

TRUE/FALSE

1. Society enforces all promises in the interests of simple morality.

ANS: F PTS: 1 MSC: AACSB Analytic | AACSB Ethics

2. Consideration can be a promise or an act.

ANS: T PTS: 1 MSC: AACSB Analytic

3. Agreeing not to open a competing business could be consideration.

ANS: T PTS: 1 MSC: AACSB Analytic

4. The UCC requires consideration for agreements modifying contracts for the sale of goods.

ANS: F PTS: 1 MSC: AACSB Analytic

5. Ann owes a liquidated debt of $3000 to Platinum Body Shop for the work done on her car. She sends Platinum a check for $1000 on which she has marked, “Payment in Full.” If Platinum cashes the check, they will not be able to successfully sue Ann for the remainder of the debt.

ANS: F PTS: 1 MSC: AACSB Reflective Thinking

6. Reuben climbs up a tree in his front yard in order to retrieve his daughter’s kite. All of a sudden, he realizes he is paralyzed with fear. Burt, his neighbor, passes by. He sees Reuben, runs in his garage, grabs a ladder and comes to his neighbor’s rescue. Once Reuben is on the ground, he hugs Burt and promises to give him a case of wine next time he sees him. Reuben changes his mind. Burt will be successful in enforcing Reuben’s promise as there was valid consideration.

ANS: F PTS: 1 MSC: AACSB Reflective Thinking

7. Raul agrees to paint Mike’s house for $1,000. Before finishing, Raul states it is too hot to finish, and Mike offers to pay $1,200 if Raul finishes. Mike’s statement that he will pay $1,200 is unenforceable.

ANS: T PTS: 1 MSC: AACSB Reflective Thinking

8. Contracts in which one party agrees to buy all his requirements of certain goods from the other party are generally unenforceable because there is no definite amount.

ANS: F PTS: 1 MSC: AACSB Analytic

9. An illusory promise is not consideration.

ANS: T PTS: 1 MSC: AACSB Analytic

10. Consideration means that there is a bargaining that leads to an exchange between the parties.

ANS: T PTS: 1 MSC: AACSB Analytic

11. Courts normally require adequate consideration.

ANS: F PTS: 1 MSC: AACSB Analytic