T or F: Rescission is the unmaking of a contract and the parties return to their pre contract positions.
Answer: True
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Business Law Chapter 12
- Blakely has a cause to sue Carly in a tort action, but agrees not to sue her if Carly will pay for the damage. If Carly fails to pay, Blakely can bring an action against her for breach of contract. This is
- Owen hires Paula under a contract that reserves to Owen the right to cancel the contract on thirty days notice at any time after Paula begins work. This promise is
- Mikayla promises to pay Lauren to work for her. Lauren agrees and quits her job, but Mikayla does not hire her. Mikayla is liable to Lauren based on
- Sawyer causes an accident in which Reese is injured. Reese accept Sawyers offer of $5,000 to release Sawyer from further liability. Later, Reese learns that his injuries are more serious than he realized. The release will
- Idle Contractor corporation begins constructing a building for Haute Apartments, Inc. In midproject, Idle asks for $150,000 more, claiming an increase in ordinary business expenses. Haute agrees. This agreement is
- Delite Pastires, Inc., contracts with Elron to deliver its products. Later, the parties decide to cancel their contract. They
- Hillcrest Office Company promises to pay Gerard $1,000 to repair the roof on Hillcrest's building Gerard fixes the roof. The act of fixing the roof
- Jay is seeking to avoid performing a promise to pay Karen $150. Jay is claiming a lack of consideration on Karen's part. Jay will win if he can show that
- Dave offers to buy a book owned by Lee for $40. Lee accepts and hands the book to Dave. The transfer and delivery of the book constitute performance. Is this performance consideration for Daves promise?
- Gayla questions whether there is consideration for her contract with Julius. Consideration has two elements- there must be a bargained-for exchange and the value of whatever is exchanged must be.
- T or F: The doctrine of promissory estoppel requires a clear and definite promise.
- T or F: Consideration is the value given in return for a promise.
- T or F: Only a liquidated debt can serve as consideration for an accord and satisfactions.
- T or F: A covenant not to sue always bars further recovery.
- T or F: If, in a contract, and promisor does not definitely promise to do anything, the promise is illusory.
- T or F: A promise has no legal value as consideration.
- T or F: Past consideration is consideration.
- T or F: A promise to do what one already has a legal duty to do is not legal sufficient consideration.
- T or F: Inadequate consideration may indicate fraud, duress, or undue influence.
- Morgan Co. and Wilbur Bros. enter into a contract for the manufacture and sale of 400 lawn chairs. If both parties agree that a modification is necessary:
- Upon graduating from college, Catherine announced her plans to enter law school the following fall and to marry Dwayne in December. Catherine's father was afraid that marriage during her first year in law school might cause her to fall behind in her studies or cause her to drop out of school. He called Catherine and promised her $10,000 if she postponed her wedding until after completion of her first year of law school. Catherine agreed and postponed the wedding for a year. Catherine successfully completed her first year of law school, but soon thereafter, Catherine's father died. The administrator of her father's estate claimed she was not entitled to the $10,000 because there was no consideration for her father's promise. If Catherine sues the estate, she will probably be:
- An agreement to pay a lesser amount to settle an unliquidated debt is:
- Phil's Furniture Company promised in a written agreement to purchase as much walnut wood "as it desires" from Franken Products, Inc. If Phil's purchased walnut wood from another source and Franken Products sued, what is the likely result?
- All of the following statements are true regarding consideration EXCEPT:
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