Business Law- Chapter 11

Question 1

Consideration

Answer 1

Something of legal value given in exchange for a promise.

Question 2

Legal Value

Answer 2

Support for a contract when either 1. the promisee suffers a legal detriment or 2. the promisor receives a legal benefit.

Question 3

Bargined-for-exchange

Answer 3

Exchange that parties engage in that leads to an enforceable contract.

Question 4

Gift Promise

Answer 4

A promise that is unenforceable because it lacks consideration.

Question 5

Illegal Consideration

Answer 5

A promise to refrain from doing an illegal act. Such a promise will not support a contract.

Question 6

Illusory Promise

Answer 6

A contract into which both parties enter but one or both of the parties can choose not to perform their contractual obligations. Thus the contract lacks consideration. Also known as an illusory contract.

Question 7

Moral Obligation

Answer 7

A sense of honor that prompts a person to make a promise. Promises made out of a sense of moral obligation lack consideration.

Question 8

Preexisting Duty

Answer 8

Something a person is already under an obligation to do. A promise lacks consideration if a person promises to perform a preexisting duty.

Question 9

Past Consideration

Answer 9

A prior act or performance. Past consideration will not support a new contract. New consideration must be given.

Question 10

Accord

Answer 10

An agreement whereby the parties agree to accept something different in satisfaction of the original contract.

Question 11

Satisfaction

Answer 11

The performance of an accord.

Question 12

Promissory Estoppel

Answer 12

An equitable doctrine that prevents the withdrawal of a promise by a promisor if it will adversely affect a peromisee who has adjusted his or her position in justifiable reliance on her promise.