SMC Business Law Sec 1059 Week 3 Chp. 7 Quiz (2015)

Week 3 Chp. 7 QuizGrading SummaryGrade Details – All QuestionsQuestion 1. Question : A contract between a manufacturer of goods and a distributor giving the distributor an exclusive right to sell the manufacturer’s products: Student Answer: Lacks mutuality of obligation Is what is known as an Exclusive Dealing Contract Is supported by consideration as there does exist mutuality of obligation All of the above B and CQuestion 2. Question : Mutuality of Obligation means that both sides must provide consideration. Student Answer: True False Question 3. Question : The promise to stop smoking and drinking made by an adult in exchange for $5,000.00 has no legal value because it does not convey anything of economic value to the person who promised the $5,000.00 Student Answer: True False Question 4. Question : In which, if any, of the underlying examples would there be no consideration? Student Answer: An agreement in which one of the parties makes a gratuitous promise An agreement in which one of the parties makes an illusory promise An agreement in which one of the parties promises payment for something that has already been received All of the aboveQuestion 5. Question : In problem case #2 of Ross v. May Company: Student Answer: According to the appellate court, the proposals contained in the handbook published between 1987 – 1989 were not bargained for by May Company and Ross The appellate court ruled that the 1968 employee handbook gave to Ross certain rights that were not superseded by the handbook published between 1987-1989 The appellate court found that the attempted modification of the 1968 contract was invalid All of the aboveQuestion 6. Question : Some of the most important preexisting duty cases are those involving preexisting contractual duties. In these cases, the overwhelming majority of courts refuse to enforce an agreement to modify an existing contract even if the modification was agreed to because of unforeseen circumstances that a party could not have reasonably been expected to anticipate. Student Answer: True False Question 7. Question : In problem case #6 of Heye v. American Golf Corporation, Inc. (AGC), the defendant lost its motion for Reconsideration to Compel arbitration and also lost this issue on appeal because the wording of the contract it drafted was illusory which meant that it had no obligation to arbitrate. Student Answer: True False Question 8. Question : A’ promise not to sue B has no legal value, because the promise does not convey anything of legal value to B. Assume that the A had a valid claim. Student Answer: True False Question 9. Question : If the elements of promissory estoppel are proven, a promise is binding and will be enforced even though no consideration is received for that promise. Student Answer: True False Question 10. Question : Legal value exists when one performs a requested act that involves either doing something the actor had no prior legal duty to do, or agreeing to refrain from something that the he/she had a legal right to do. Student Answer: True False Question 11. Question : In the problem case #1, Calabro vs. Calabro: Student Answer: The plaintiff (Hope) alleged both contract and non-contract theories in her lawsuit. The plaintiff’s decision to apply to and attend Vanderbilt amounted to consideration IF the father bargained for it. The plaintiff could enforce her father’s promise if she could prove either that he bargained for her to attend Vanderbilt or, in the alternative, she could prove the elements of promissory estoppel. All of the above There was no legal value (legal detriment) to Hope because she did not give up anything tangible Question 12. Question : In problem case # 8, Brads vs. First Baptist Church of Germantown, identify which if any, of the underlying is true: Student Answer: The agreement was invalid because it lacked sufficient consideration Brad’s agreement to aid, assist and advise the new pastor did not amount to Brads giving up a legal right or incurring a legal obligation The church’s agreement to place Brads on disability retirement status did not amount to it giving up a legal right or incurring a legal obligation None of the above is true Question 13. Question : In problem case #2 of Ross v. May Company, The attempted modification was found to be invalid because it lacked mutual assent Student Answer: True False Question 14. Question : In problem case #1, Calabro vs. Calabro, the case filed against Arthur Calabro was dismissed because his promise to his daughter did not bargain for anything in return and and no alternate non-contract theory existed. Student Answer: True False Question 15. Question : Seller and Buyer enter into a binding agreement stating that Seller’s business will be sold to Buyer according to the terms and conditions set forth in their agreement. Sometime after signing their agreement each decides (independent of the other) that he wants out. Identify the type of contract that would cancel their existing contract. Student Answer: An accord and satisfaction A modification contract A rescission contract An illusory contract None of the aboveQuestion 16. Question : Which of the following is a true illusory promise? Student Answer: “I promise to mow your lawn, but I can terminate on three days’ notice” “I promise to mow your lawn each week of the summer, but I can cancel after one month” “I promise to mow your lawn on such occasions as I designate” All of the above are true illusory promisesQuestion 17. Question : In the case of Skebba v. Kasch, jury decided that no ‘contract in fact’ was ever made between the parties but that Skebba should recover $250,000.00 based on the application of the principle of promissory estoppel. The appellate court agreed. Student Answer: True False Question 18. Question : A contractual promise that is worded so that it really does not bind the person making it to do or refrain from doing anything, could not serve as consideration. The type of promise is called illusory. Student Answer: True False Question 19. Question : In the case of Gottlieb v. Tropicana Hotel and Casino (THC): the court relied on the philosophy of stare decisis and cited prior case law that stood for the following legal principles: Student Answer: Consideration was present in a contest offering a new car to anyone who got a hole-in-one on a particular hole Consideration was present in a contest offering prizes to persons who enter and tear the entry form off the calendar and then enter their name, address and phone number and deposit the form at designated stores Neither of the above was determined to be valid consideration because neither amount to detriment to those entering the contests Both A & BQuestion 20. Question : A modification contract is a contract to: Student Answer: Cancel an existing contract Compromise an existing contract Change an existing contract Rescind an existing contract