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Exam 10: Consideration

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Question 21

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A preexisting duty may arise from a previous contract.

A) True
B) False

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Question 22

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A release does not require consideration to be legally binding.

A) True
B) False

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Question 23

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If a promise is made,it will be enforced.

Dave's uncle tells Dave that if "he feels that Dave deserves it," he will give Dave $1,000 when Dave graduates from college.Dave's uncle's promise is

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

Fact Pattern 10-2 (Questions 10-12 apply) Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan accruing interest at a certain rate and payable beginning on a certain date-was unfair because the consideration for their contract was inadequate. -Refer to Fact Pattern 10-2."Adequacy" of consideration refers to

In most states,a release requires a signed writing.

Consideration is always money.

Legal sufficiency of consideration is the same as adequacy of consideration.

Fact Pattern 10-1 (Questions 4-5 apply) Dave's Hobby Town and Estelle's Yarn Shoppe are adjacent stores with adjoining parking lots.Dave offers Estelle a discount on purchases from Dave's store if Estelle will not tow the cars of Dave's customers who park in Estelle's lot. -Refer to Fact Pattern 10-1.Dave's discount is legally sufficient consid?eration

In a covenant not to sue,the parties substitute a contractual obligation for some other type of action.

Rescission is the substitution of one party to a contract for a third party,who agrees to assume the contractual duties.

Consideration is the value given in return for a promise.

In contract law,"consideration" refers to the time that a party takes to evaluate a deal.

Easton promises to pay Sara $500 in exchange for Sara's $5,000 car.Under the doctrine of freedom of contract,Easton's consideration is

A promise to pay for an act that has already occurred is enforceable because the event is certain.

A release is an agreement in which one party gives up the right to pursue a legal claim against another party.

Fact Pattern 10-4 (Questions 29-30 apply) Dex and Carmen are in an auto accident.Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex.Carmen agrees.Later,Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury. -Refer to Fact Pattern 10-4.The agreement between Dex and Carmen is

In contract law,"consideration" refers to the courtesy that one party shows another in negotiating a deal.

William buys Liz's house for $100,000,which is the fair market value of the house.If the contract is later disputed in court,the court is likely to declare William's consideration