Chapter 4 Multiple Choice Questions

. Match the definition to the doctrine.

A benefit to one party or a burden to the other party.

.

A party seeks to deny a previous false statement of fact that was relied upon by the other party.

.

A party tries to act inconsistently with his promise, upon which the other party relied.

.

A threat to breach a contract if the other party does not promise to pay more money.

. An agreement to marry is no longer good consideration for a promise after it was abolished by s. 1 of the ……… Act 1970.

. James leads an expedition to the Arctic Circle, where his team get stuck. Fortunately, they stumble across another expedition, which agrees to tow them back to safety in return for the rest of their provisions. Halfway towards safety, the rescuers demand that James' team also give up their fur jackets and other equipment once they are safe or else they will be abandoned immediately. James reluctantly agrees, but then refuses to hand over the furs and equipment when safe. Are the rescuers contractually entitled to the furs and equipment?

No, because they did not provide any consideration for James' promise to give them furs and equipment.

Yes, because they provided a practical benefit to James' team by taking them to safety.

No, because James did not provide any consideration for his promise to give the furs and equipment.

Yes, because public policy dictates that rescuers should be able to negotiate for extra benefits from the people they rescue.

. Which of the following statements are included in s. 71 of the American Law Institute's 2nd Restatement of Contracts? Please select all that apply.

To constitute consideration, a performance or return promise must be bargained for.

A return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.

Foreseeable reliance on a promise constitutes consideration.

Consideration may be a benefit or detriment.

. The law of contract supports promises supported by past consideration.

True

False

. Performance of a contractual obligation owed to a ……… constitutes good consideration for a promise.

. Felicity borrowed £15,000 from Meanies Bank plc to pay her way through university. She has taken out four credit cards and failed to meet her minimum payments, and so Meanies is worried that it will never get its money back. Meanies offers her a deal under which it will cancel her debt if she pays £200 a month for 48 months (a total of £9,600). Felicity is keen to keep on good terms with the bank and pay off her debts without going bankrupt, and so she accepts, but at the end of the four years, Meanies claims the full amount of the debt.

Meanies is bound by the contractual agreement it made with Felicity and she can resist its claim for the full debt.

Meanies is estopped from acting inconsistently with its promise to accept a lesser sum in instalments.

Meanies' promise to accept less is supported by consideration, because Felicity provides a practical benefit by paying the bank at least some of the money, instead of going bankrupt and paying it none.

It is equitable to allow Meanies to claim the full sum and the courts are likely to exercise their equitable discretion to allow the claim.

. Professor Atiyah argued that? Please select all that apply.

consideration should be widened to include all good reasons for enforcing a promise.

gratuitous non-bargain promises should be enforceable as contracts.

gratuitous non-bargain promises should be enforceable through a more active doctrine of estoppel.

contractual damages should only protect the reliance interest of a party in certain circumstances.

. The rule that consideration must move from the promisee means that the benefit or detriment must be conferred or suffered by the promisee, and not a third party.

True

False

. The promise in Chappell v Nestlé (1960) was supported by consideration because the wrappers had been ……… by Nestlé as the price of its promise.

. What did Denning LJ mean when he said, in Combe v Combe (1951), that the doctrine of consideration was 'too firmly fixed to be overthrown by a side wind'?

That the doctrine was too rigid and should therefore be abolished.

That it was impossible to get rid of the long-established doctrine of consideration by allowing promissory estoppel to create rights of action on its own; estoppel can only act defensively to prevent a promisor from going back on his promise not to exercise his existing contractual rights.

He was not in favour of promissory estoppel and saw it only as an annoying side wind.

That promissory estoppel is a weak doctrine and should not replace the stronger and more effective doctrine of consideration.

. Performance of a pre-existing public duty (please select all that apply):

may constitute good consideration if the performing party exceeds his public duty.

does not constitute good consideration if the performing party is only doing what he is already obliged to do.

can constitute good consideration, because there is no real harm in allowing public officials to extract payment for their services.

can constitute good consideration, because the promisor himself receives a personal promise that the public duty will be performed.

. A promise by A to perform an act that A is already obliged to perform for B can form good consideration for C's promise to A.

True

False

. A ……… party is not a party to the contract but may receive certain benefits under the contract.

. In a unilateral contract, one is only looking for consideration moving from one side.

True

False

. Consideration given by A is the price for B's ………, because the consideration must be requested by B as part of a bargain between A and B.

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