- What is the most significant obstacle to your client's claim that the firm breached the contract? Select one.
Answer: The contract lacks consideration because the firm's promise to assign projects is illusory.
The correct answer is A. A promise is illusory if the promisor retains complete and unfettered discretion over whether to perform. In this contract, the firm's promise to assign projects "in its sole discretion" gives it the power to perform or not perform at its whim. This lack of a binding commitment means there is no consideration from the firm to support the client's promise to be available, rendering the entire contract unenforceable for lack of mutuality of obligation.
- If the contractor sues the homeowner for the additional $2,000, is the contractor likely to prevail? Select one.
Answer: No, because the contractor had a preexisting legal duty to complete the deck for the originally agreed-upon price of $10,000.
The correct answer is C. Under the common law, which governs service contracts, a modification to a contract must be supported by new consideration. Here, the contractor was already obligated to build the deck for $10,000. The promise to complete the work he was already bound to do is not new consideration for the homeowner's promise to pay an additional $2,000. This is known as the preexisting duty rule. While an exception exists for unforeseen difficulties, a mere increase in the cost of materials is typically considered a foreseeable business risk, not a circumstance that would excuse the preexisting duty rule.
- If the firefighter sues the man, is the man's promise enforceable? Select one.
Answer: No, because the firefighter was performing a preexisting public duty when she rescued the man.
The correct answer is B. Performance of a preexisting legal duty cannot serve as consideration for a new promise. Firefighters have a public duty to rescue people from fires. Therefore, the firefighter did not provide any new legal detriment in exchange for the man's promise of $1,000. The act of performing an existing public duty is not consideration. The promise is a gratuitous promise to make a gift and is unenforceable.
- Which of the following statements best describes the legal relationship between the farmer and the bakery? Select one.
Answer: No contract was formed because the bakery's promise was illusory, as it was not obligated to purchase any flour.
The correct answer is C. The bakery's promise to purchase "up to 1,000 pounds" does not commit it to purchasing anything. The bakery could satisfy this promise by buying zero pounds, giving it complete discretion. This is an illusory promise that does not provide consideration for the farmer's promise to have flour available. This is different from a requirements contract ("all the flour we require") or an output contract ("all the flour you produce"), which are enforceable because the quantity is determined by the good-faith needs of the business. Since there is no mutuality of obligation, no enforceable contract was formed.
- Your client wants to sue the original tenant for the $1,200. What is the strongest basis for the enforceability of the tenant's email promise? Select one.
Answer: The promise is enforceable because it acknowledges a preexisting legal duty under the original lease.
This question tests your understanding of contract modifications and the enforceability of promises to pay existing debts. When a tenant breaches a lease by abandoning the property, they remain liable for unpaid rent, but the landlord has a duty to mitigate damages by finding a replacement tenant.
The tenant's email promise is enforceable because it acknowledges a preexisting legal duty under the original lease (B). When the tenant abandoned the apartment, they breached their contractual obligation to pay rent for the remaining lease term. The landlord mitigated damages by finding a new tenant, but the original tenant remained liable for the difference in rent and the vacancy period. The email simply acknowledges this existing legal obligation - no new consideration is needed when someone promises to pay a debt they already owe.
Option A is incorrect because this isn't a modification of the lease agreement - it's an acknowledgment of an existing breach and debt. Option C contains a critical error: it suggests the contractual obligation is "barred," but there's nothing indicating the debt is time-barred or otherwise unenforceable. The original lease obligation remains valid. Option D fails because promissory estoppel requires detrimental reliance by the promisee, and there's no indication the landlord changed position based on the tenant's email promise.
Remember this key principle: When someone promises to pay a debt they already legally owe, that promise is enforceable without new consideration. Look for acknowledgment language like "I owe" or "I will pay" in similar scenarios - these often signal preexisting duty rather than new contractual obligations.
- Has the winery breached its contract with the grower? Select one.
Answer: No, because in a requirements contract, a buyer may reduce its requirements to zero if the reduction is made in good faith.
The correct answer is D. This is a requirements contract, which is enforceable under the UCC. The quantity is measured by the good faith requirements of the buyer. While a buyer cannot demand a quantity unreasonably disproportionate to any stated estimate or prior output, it can reduce its requirements, even to zero, as long as the reduction is made in good faith and not merely to avoid the contract. Here, the reduction was due to a downturn in the market, which is a legitimate business reason. Therefore, the winery's decision not to require any grapes was likely made in good faith and is not a breach.
- If the nephew sues the uncle to enforce the agreement, what is the likely outcome? Select one.
Answer: The nephew will lose, because the purported one-dollar payment was nominal and a mere pretense of a bargain, not genuine consideration.
The correct answer is D. While courts generally do not inquire into the adequacy of consideration (the 'peppercorn theory'), they do require that the consideration be genuinely bargained for. When the consideration is nominal and not actually paid, and the overall context suggests a gift, courts may find it to be 'sham' or 'nominal' consideration. Here, the use of '$1.00' for a valuable vintage car, coupled with the fact it was never paid, indicates it was a mere pretense to make a gift promise look like a contract. Therefore, there was no true bargained-for exchange, and the promise is unenforceable.
- Is the developer's promise to the subcontractor enforceable? Select one.
Answer: Yes, because the developer received the direct benefit of the subcontractor's continued performance on the project.
The correct answer is A. This question involves both consideration and the Statute of Frauds. While B is incorrect because a promise to perform a duty owed to a third party is valid consideration for a promise by a new promisor, C states the general rule for suretyship promises. However, the 'main purpose' or 'leading object' rule is an exception to the Statute of Frauds. If the promisor's main purpose in making the guarantee was to secure a direct benefit for themselves, the oral promise is enforceable. Here, the developer's main purpose was not to benefit the construction company, but to ensure the timely completion of its own project. Thus, the promise is enforceable despite being oral.
- Can the programmer successfully enforce the amended contract terms regarding the salary increase? Select one.
Answer: Yes, because the programmer's forbearance from accepting the competitor's job offer constituted valid consideration.
The correct answer is D. The preexisting duty rule would normally prevent the programmer from enforcing the salary increase, as she was already obligated to work for the company. However, the programmer provided new consideration by giving up her legal right to terminate the relationship (assuming it was at-will, or even if not, by giving up the power to breach and accept a new job) and accept the offer from the competitor. This forbearance is a legal detriment that was bargained for by the company, and it is sufficient consideration to support the company's promise of a higher salary.
- What is the client's strongest defense against the firm's lawsuit? Select one.
Answer: The firm's claim is barred by the doctrine of accord and satisfaction.
The correct answer is A. An accord and satisfaction occurs when there is a dispute over the amount of a debt, and one party offers a payment on the express condition that its acceptance will be in full satisfaction of the debt. The other party's acceptance of that payment creates an enforceable settlement. Here, there was a bona fide dispute about the quality of the work and the amount owed. The client's check with the "payment in full" notation was an offer of accord. The firm's act of cashing the check constituted acceptance of that offer, creating an accord and satisfaction that discharges the remaining disputed debt.
- Is the homeowner obligated to pay the remaining $1,000? Select one.
Answer: Yes, because payment of a lesser amount cannot serve as consideration to discharge a larger, undisputed debt.
The correct answer is C. For an accord and satisfaction to discharge a debt, there must be valid consideration. When a debt is liquidated and undisputed, the debtor has a preexisting legal duty to pay the full amount. A payment of a lesser amount is not valid consideration to support a promise to discharge the entire debt. The rule is that payment of a smaller sum cannot discharge a larger, liquidated debt. Therefore, the landscaping company can still sue for the remaining $1,000. This differs from a situation involving a disputed debt, where any payment can be consideration for a settlement.
- If the daughter sues her father to enforce his promise, what is her strongest legal theory for recovery? Select one.
Answer: Promissory estoppel, because the daughter reasonably and detrimentally relied on her father's promise.
The correct answer is C. This scenario presents a classic case for promissory estoppel. The father's promise, while likely intended as a gift and lacking traditional bargained-for consideration, was clear and definite. It was foreseeable that the daughter would rely on it by quitting her job and signing a lease. She did in fact rely on it to her detriment. In such cases, courts may enforce the promise to the extent necessary to avoid injustice. The other options are weaker: there was no bargained-for exchange for a contract, and the father was not unjustly enriched.
- Which of the following statements best describes the niece's legal position? Select one.
Answer: The aunt's promise is unenforceable because graduating from law school was a condition of a gift, not consideration for a bargain.
The correct answer is B. For a promise to be enforceable, there must be a bargained-for exchange. The key is to distinguish between a condition of a gift and consideration. The test is whether the promisor's motive was to induce the detriment (making it consideration) or merely to state a necessary condition for receiving a gift. Here, the aunt's language ("as a graduation gift") and the context indicate her motive was donative. The niece was already enrolled in law school, and graduation was merely the event that would trigger the promised gift, not a bargained-for performance. Therefore, the promise lacks consideration.
- If the builder sues the manufacturer for breach of contract, is the builder likely to prevail? Select one.
Answer: No, because the requirement to provide 30 days' notice constituted a detriment sufficient to serve as consideration.
The correct answer is C. A promise is not illusory if the promisor's discretion is limited in some way. The requirement to provide 30 days' written notice before canceling restricts the manufacturer's freedom of action. For that 30-day period, the manufacturer is bound by the contract. This limitation, however small, is a legal detriment that constitutes valid consideration, making the manufacturer's promise non-illusory and the contract enforceable. Since the manufacturer followed the procedure in the termination clause, it did not breach the contract.
- Is the son's promise to pay the neighbor $5,000 legally enforceable? Select one.
Answer: No, because the neighbor's services were rendered before the son's promise was made, constituting past consideration.
The correct answer is C. A promise is not enforceable without consideration, which requires a bargained-for exchange. Here, the neighbor's services were already performed before the son made his promise. Therefore, the services are past consideration and cannot support the son's promise. While a minority of courts recognize an exception for a promise made in recognition of a material benefit previously received (the 'material benefit rule'), that rule typically requires the benefit to have been conferred on the promisor (the son), not a third party (his mother).
- Will the friend's lawsuit to collect the $10,000 likely be successful? Select one.
Answer: Yes, because the man's written acknowledgment of the debt revived his obligation to pay it.
The correct answer is C. A promise to pay a debt that has become unenforceable due to the statute of limitations is binding without new consideration. The past debt serves as the basis for the new promise. Most jurisdictions require this new promise or acknowledgment to be in writing to be effective. The man's 2022 text message was a clear, written acknowledgment of the existing debt and an implied promise to pay, which is sufficient to revive the debt and reset the statute of limitations, making the subsequent lawsuit timely and successful.
- Can the landowner now successfully sue the driver for the remaining damages to the rose bushes? Select one.
Answer: No, because forbearance to sue on a claim constitutes valid consideration as long as the claimant had a good faith belief in its validity.
The correct answer is C. Forbearance to sue on a claim is valid consideration for a settlement agreement if the party forbearing has a good faith belief in the validity of the claim, or if the claim is objectively reasonable. Here, the landowner had a good faith belief in the claim, even if it was unlikely to succeed for the full amount. This good faith forbearance was a legal detriment and thus valid consideration for the driver's promise to pay $3,000. The resulting settlement agreement is an enforceable contract that bars the landowner from pursuing the original tort claim.
- Is the couple's promise to pay the additional $1,500 enforceable? Select one.
Answer: Yes, because the chef's promise to provide the additional dessert course was new consideration for the couple's promise to pay more.
This question tests contract modification principles, specifically what constitutes valid consideration for changes to an existing agreement.
When parties modify a contract, the modification itself must be supported by consideration to be enforceable. Here, the chef agreed to provide something entirely new—a complex dessert course that wasn't part of the original catering agreement. This additional service constitutes fresh consideration that supports the couple's promise to pay an extra $1,500. The chef gave up something of value (time, ingredients, labor for the dessert) in exchange for the additional payment, creating a valid bilateral modification.
Option A is incorrect because while the Statute of Frauds requires certain contracts to be in writing, contract modifications don't automatically fall under this requirement just because the total exceeds a threshold. The modification here involves services, not goods, so UCC writing requirements don't apply.
Option C misapplies the preexisting duty rule. That doctrine prevents enforcement when someone promises to pay extra for work already legally required. But the chef had no preexisting duty to provide the dessert course—it was entirely outside the original agreement's scope.
Option D incorrectly applies UCC rules. Even under the UCC (which governs goods, not services), modifications still need consideration or must meet specific good faith requirements. More importantly, this is a service contract governed by common law, not the UCC.
Remember: when analyzing contract modifications, distinguish between additional work (new consideration) and work already required under the original contract (preexisting duty). New services create enforceable modification rights.
- Is the agreement to pay the higher price of $115 per dress enforceable against the store? Select one.
Answer: Yes, because the modification was proposed in good faith due to a legitimate commercial reason and did not require new consideration.
The correct answer is C. This contract is for the sale of goods, so it is governed by the UCC. Under UCC § 2-209, an agreement modifying a contract for the sale of goods needs no consideration to be binding. However, the modification must be made in good faith. Here, the manufacturer's reason for the price increase—the failure of its supplier and the need to use a more expensive alternative—is a legitimate commercial reason. Therefore, the modification was proposed in good faith and is enforceable without new consideration.
- In a suit to recover the additional $3,000, which of the following provides the accountant's strongest argument for why the client's promise to pay is enforceable? Select one.
Answer: The client's promise is enforceable because the modification was fair and equitable in light of circumstances not anticipated by the parties when the contract was made.
The correct answer is A. While the preexisting duty rule generally bars enforcement of a modification without new consideration, a major exception applies when (1) the modification is made before the contract is fully performed by either side; (2) the underlying circumstances prompting the modification were unanticipated by the parties; and (3) the modification is fair and equitable. Here, the client's complex, undisclosed foreign investments were an unanticipated circumstance, and the request for additional payment for 40 hours of extra work is fair and equitable. This makes the modification enforceable even without separate consideration.
