QUESTION 29

1. Establishing Legally Sufficient Value requires an analysis that includes which of the factors listed below?

   	A.	One promises to do something they have no prior legal obligation to do.
   	B.	One performs an action they are not legally obligated to undertake.
   	C.	One refrains from performing or promises to refrain from performing an action they have a legal right to engage in.
   	D.	All of the above choices.

   QUESTION 30

2. In Hamer v. Sidway (1891), Uncle Story and Nephew Story entered into a contract. If the Nephew promised not to drink, smoke, swear, and play cards for money from the time of the agreement (age 16) until he was 21 years old, the Uncle promised to pay him $5,000 when he turned 21. The Nephew performed according to his promise and the money went into an interest bearing account. When Uncle Story died 12 years later, Hamer (who had received the right to the money from Nephew) sued the estate for payment. Sidway, the executor of Uncle's estate, made which argument to the court in an effort to avoid paying Hamer?

   	A.	Hamer was not a party to the original contract and had no legal rights in the contract.
   	B.	Nephew's promise was unrealistic and could not have been monitored lawfully over the years.
   	C.	Uncle Story's promise was supported by consideration (payment of the money) but Nephew's promise was not. Nephew merely promised to do nothing.
   	D.	Sidway, as the executor, had no authority to pay the money to Hamer

   QUESTION 31

3. Hamer v. Sidway (1891) is a very significant case in contract law because it created the third factor in the Legally Sufficient Value analysis for Consideration. Which statement below reflects that factor?

   	A.	Forbearance of a legal right constitutes legally sufficient value and shows that consideration exists.
   	B.	Refraining from an act one has a legal right to undertake is not consideration.
   	C.	Consideration is not required in contracts between family members.
   	D.	Executors of estates should stay out of family contracts.

   QUESTION 32

4. A concern about how much consideration is enough under contract law is not a proper concern because persons have the ability to enter into contracts, or not, as they freely choose. The applicable common law contract principle is that courts will not examine the Adequacy of consideration. Which statement below is true?

   	A.	This principle means that courts will revise contracts whenever a party petitions the court for assistance.
   	B.	This principle means that parties must engage in due diligence prior to entering into a contract. A court will not revise a contract simply because it represents an unfavorable deal for one of the parties.
   	C.	This principle means that parties can change the terms of the contract whenever it is necessary to make the terms more advantageous.
   	D.	None of the above choices.

   QUESTION 33

5. Your Great Aunt Mabel entered into a contract with Suzie, her caregiver/aide. Suzie had been hired to provide home health assistance to Great Aunt Mabel. On a recent visit, you learn that Great Aunt Mabel sold her $150,000 Tesla Model X Sport Utility Vehicle to Suzie for $1,000. You seek legal advice because your family would like the contract declared invalid and unenforceable. What common law contract principle will apply to this situation?

   	A.	Courts do not examine the adequacy of consideration.
   	B.	Parties who fail to engage in due diligence must live with their contract terms.
   	C.	Because the amount of consideration in this contract is "so shockingly inadequate" the court will examine the contract to determine if Great Aunt Mable entered into it voluntarily. The court will be concerned that Suzie took advantage of Great Aunt Mabel (known as Undue Influence) which would make the contract unenforceable.
   	D.	None of the choices above.

   QUESTION 34

6. Which statement below is false regarding Capacity?

   	A.	When a minor misrepresents their age, they can still disaffirm their contract simply because they are a minor.
   	B.	The law protects those with youth and mental incompetence.
   	C.	Contracts of intoxicated persons are valid most of the time. Courts rarely allow an intoxicated person to avoid their contractual obligations.
   	D.	When 16-year-old Joseph Dodson entered into a contract to purchase a vehicle from a used car dealer and then towed the vehicle back to the dealer months later in non-working condition, he had disaffirmed the contract and could avoid any further payments on the contract. The court determined his contract was voidable because he was a minor with the right to disaffirm at any time during his minority.