Podcast
Questions and Answers
What is essential for a release to be generally binding?
What is essential for a release to be generally binding?
- Good faith, signed writing, and consideration (correct)
- The absence of any prior debts
- Written documentation only
- No need for any contract
Which type of debt is defined as uncertain in amount?
Which type of debt is defined as uncertain in amount?
- Settled Debt
- Liquidated Debt
- Unliquidated Debt (correct)
- Fixed Debt
What does an 'accord and satisfaction' involve?
What does an 'accord and satisfaction' involve?
- Full payment of the debt with interest
- No payment at all
- Partial payment accepted by the creditor (correct)
- Transfer of debt to a third party
What is a covenant not to sue?
What is a covenant not to sue?
Which one of these features defines liquidated debt?
Which one of these features defines liquidated debt?
Why might a party agree to a covenant not to sue?
Why might a party agree to a covenant not to sue?
Which of the following is NOT a requirement for a release to be binding?
Which of the following is NOT a requirement for a release to be binding?
Which option correctly distinguishes between liquidated and unliquidated debts?
Which option correctly distinguishes between liquidated and unliquidated debts?
What are the two essential elements of consideration in a contract?
What are the two essential elements of consideration in a contract?
Under which circumstance can a promise be enforced despite a lack of consideration?
Under which circumstance can a promise be enforced despite a lack of consideration?
Does a minor have the capacity to enter into an enforceable contract?
Does a minor have the capacity to enter into an enforceable contract?
What does it mean for a minor to disaffirm a contract?
What does it mean for a minor to disaffirm a contract?
What is the primary effect of illegality on a contract?
What is the primary effect of illegality on a contract?
In what scenario does promissory estoppel typically apply?
In what scenario does promissory estoppel typically apply?
Which concept refers to a promise that is enforced even when no consideration is given?
Which concept refers to a promise that is enforced even when no consideration is given?
What is the legal capacity regarding individuals classified as minors?
What is the legal capacity regarding individuals classified as minors?
What is the main principle behind promissory estoppel?
What is the main principle behind promissory estoppel?
Which of the following is NOT a requirement to establish promissory estoppel?
Which of the following is NOT a requirement to establish promissory estoppel?
In what contexts has promissory estoppel been applied?
In what contexts has promissory estoppel been applied?
What age signifies the age of majority for contractual purposes in most states?
What age signifies the age of majority for contractual purposes in most states?
Which of the following best describes contractual capacity?
Which of the following best describes contractual capacity?
What does substantial detriment refer to in promissory estoppel?
What does substantial detriment refer to in promissory estoppel?
What must a promisor expect regarding the promisee in order for promissory estoppel to apply?
What must a promisor expect regarding the promisee in order for promissory estoppel to apply?
Which statement regarding the enforcement of promises is true under promissory estoppel?
Which statement regarding the enforcement of promises is true under promissory estoppel?
What is the effect of a minor’s emancipation on minority status?
What is the effect of a minor’s emancipation on minority status?
What must a minor do to disaffirm a contract?
What must a minor do to disaffirm a contract?
Which of the following is NOT an exception to a minor’s right to disaffirm a contract?
Which of the following is NOT an exception to a minor’s right to disaffirm a contract?
What does ratification mean in the context of contracts?
What does ratification mean in the context of contracts?
Under what condition can a contract entered into by an intoxicated person be enforced?
Under what condition can a contract entered into by an intoxicated person be enforced?
What is disaffirmance in legal terms?
What is disaffirmance in legal terms?
Which statement about parental liability for minor’s contracts is accurate?
Which statement about parental liability for minor’s contracts is accurate?
What occurs if a minor misrepresents their age while engaged in business?
What occurs if a minor misrepresents their age while engaged in business?
What is one significant issue related to covenants not to compete?
What is one significant issue related to covenants not to compete?
Which type of unconscionability involves the clarity and readability of contract terms?
Which type of unconscionability involves the clarity and readability of contract terms?
What is a primary characteristic of substantive unconscionability?
What is a primary characteristic of substantive unconscionability?
What does an exculpatory clause do in a contract?
What does an exculpatory clause do in a contract?
Which of the following terms is used to describe a court-ordered correction of a written contract?
Which of the following terms is used to describe a court-ordered correction of a written contract?
Which aspect of contracts pertains to the absence of an opportunity to review or ask questions?
Which aspect of contracts pertains to the absence of an opportunity to review or ask questions?
What might be a potential problem with contracts that are overly harsh?
What might be a potential problem with contracts that are overly harsh?
What is commonly true about covenants not to compete in employment contracts?
What is commonly true about covenants not to compete in employment contracts?
Study Notes
Consideration
- Consideration is the value given when a promise is made.
- Legally Sufficient Value can be: a promise to do something, performance of an action, or refraining from doing something.
- Bargained-for Exchange refers to the promise or action given in exchange for something else.
- Unilateral and Bilateral Contracts: occur when a promise is exchanged for a promise (bilateral) or a promise is exchanged for performance of an action (unilateral).
Agreement That Lack Consideration
- Preexisting Duty: performing a preexisting duty is not legally sufficient consideration.
- Past Consideration: promises based on past consideration are unenforceable.
Settlement of Claims
- Accord and Satisfaction: A debtor offers, and a creditor accepts, payment of a lesser sum than what was originally owed.
- Liquidated Debt: A debt that has a clear and specific amount.
- Unliquidated Debt: A debt that is uncertain in amount.
- Release: A written contract that releases a party from liability. Releases must be accompanied by consideration and be made in good faith.
- Covenant Not to Sue: An agreement that substitutes a contractual obligation for legal action.
Promissory Estoppel
- Promissory estoppel is known as detrimental reliance, meaning someone who reasonably relied on a promise is able to obtain some form of recover.
- Promissory estoppel applies to situations involving gifts and donations to charities, business transactions, employment relationships, and disputes within families.
Contractual Capacity
- Contractual capacity is the legal ability to enter into contracts.
- Minors: Individuals under the age of 18 do not have full contractual capacity.
- Disaffirmance: Minors can avoid contracts.
- Ratification: When a minor reaches the age of majority, they may decide to accept the contract made while they were a minor.
- Emancipation: When minors are freed from parental control they often gain legal and contractual capacity.
- Intoxicated Persons: Contracts made by intoxicated persons may be voidable or valid.
- Mentally Incompetent Persons: Individuals who have been legally declared mentally incompetent lack legal capacity.
Legality
- Contracts that violate the law or are against public policy are unenforceable.
- Contracts in Restraint of Trade: Contracts that restrict competition are generally against public policy.
- Covenants Not to Compete: A type of restraint of trade that prohibits an individual from competing with a former employer or business partner.
- Reformation: When courts adjust contracts to reflect the true intention of the parties, they are reforming the contract.
- Unconscionable Contracts: Contracts that are oppressive or unfairly one-sided.
- Procedural Unconscionability: The process by which contracts are formed is unfair. Potential issues include inconspicuous print, unintelligible legal jargon, lack of opportunity to read or ask questions, or adhesion contracts.
- Substantive Unconscionability: The terms or the content of the contract is oppressive.
- Exculpatory Clauses: Contracts that release a party from liability for harm or injury.
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Description
This quiz covers essential concepts of consideration in contract law, including legally sufficient value, the difference between unilateral and bilateral contracts, and the principles of accord and satisfaction. Test your understanding of how consideration affects enforceability and settlement of claims.
