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Exam 9: Consideration, Capacity, and Legality

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Question 1

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Twyla's dock is damaged in a boating accident caused by Ulrich's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulrich fails to pay, Twyla can bring an action for breach of contract. This is​

A) ​a covenant not to sue.
B) ​an illusory promise.
C) ​an unforeseen difficulty.
D) ​a release.

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Question 2

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Executed contracts are presumed ratified.​

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Question 3

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If an illegal contract is executory, either party can always enforce it.​

A contract involving an unlicensed practitioner is generally illegal and unenforceable.​

Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump​

Ross promises to pay Sara, his niece, $5,000 if she obtains her degree at Tech University, where she is in her third year. Sara graduates. Ross is​

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey​

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

Pi in the Sky Aircraft Inc. files a suit against Quest Engineering Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if​

Chet, a minor, signs a contract with Denise, an adult. The contract is voidable at the option of​

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

Desi's Uncle Eduardo tells Desi, "If I feel you deserve it at the time, I will give you a new car when you graduate from college." This promise​

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

Geri is a minor. Without her parents' knowledge, she signs a contract to buy an airline ticket to Hawaii for spring break. Geri's parents are liable for​

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

Fact Pattern 9-1 Sports Bar & Grill and Tea & Tarts Bakery are adjacent businesses with adjoining parking lots. Sports Bar offers Tea & Tarts a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot. ​ -Refer to Fact Pattern 9-1. Tea & Tarts's forbearance from towing is legally sufficient consideration​

Performance can constitute the consideration that creates a contractual obligation.​

The courts are usually not concerned if one of the wrongdoers in an illegal contract is unjustly enriched at the expense of the other.​

Two parties can mutually agree to rescind a contract unless it is executory.​

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