Chapter 8- Consideration Test

The transfer of ownership without receiving anything in return is called a gift.

• True

• False

If a contract contains a clause that allows you to escape the legal obligation, the promise is said to be

• (a) nominal consideration

• (b) illusory

• (c) adequate consideration

• (d) none of these

Consideration can be given by conferring (have discussions about) the benefit or by incurring a detriment (damage).

• True

• False

Which of the following is not a part of consideration?

• (a) future performance

• (b) immediate performance

• (c) past performance

• (d) present performance

A promise must be binding to be consideration.

• True

• False

A big difference in economic value of what one gives and receives may be evidence of

• (a) duress

• (b) mutual mistake

• (c) fraud

• (d) all of these

To promise to do something that you are already obligated to do by law cannot serve as consideration.

• True

• False

The statute of limitations specifies

• (a) the maximum amount of money one can receive on a claim

• (b) the time limit for bringing a lawsuit

• (c) the maximum amount of people who can file on the same claim

• (d) the time limit for consideration

Consideration never consists of a change in a party's legal position as a result of the contract.

• True

• False

Legal value is found in

• (a) the exchange of two benefits

• (b) the exchange of two detriments

• (c) the exchange of a benefit for a detriment

• (d) all of these