Understanding Consideration in Contracts

what is considered a contract in law

• the formal written document of a contract

• Something of value that is exchanged between parties to a contract

• A decision made by the court about the validity of a contract

• A promise to never break a contract

Which of the following can be valid consideration in a contract?

• A promise to deliver goods in the future

• A pre-existing obligation

• A promise to stop doing something illegal

• A promise made by a minor

Which of these statements about consideration is true?

• Consideration must be of equal value to both parties

• Consideration can only be money

• Consideration does not have to be tangible or of equal value to both parties

• Consideration must always involve a transfer of property

In a contract, one party agrees to deliver a car in exchange for $5,000. What is the consideration from both parties?

• The car is the consideration from the seller, and the $5,000 is the consideration from the buyer

• The car is the consideration from the buyer, and the $5,000 is the consideration from the seller

• Both parties must provide a car as consideration

• There is no consideration in this contract

Which of the following is an example of “past consideration”?

• Agreeing to mow someone's lawn for $20

• A promise to give a gift to someone

• A promise to pay someone for a favor they did last week

• An offer made during a negotiation

Which of the following is a requirement for consideration in a contract?

• Consideration must be fair

• Consideration must be something new and not something already owed or promised

• The parties must exchange equal amounts of consideration

• Consideration must involve a promise to deliver a tangible item

Which is NOT is valid consideration?

• Property

• A promise to do something that is already legally required

• Money

• An agreement to give a gift

If a contract involves a promise to perform an illegal act, what is the status of consideration?

• The consideration is invalid, and the contract is unenforceable

• The consideration can be enforced if the act is not completed

• The consideration is valid, and the contract is enforceable

• The consideration is valid, but the contract is unenforceable

Which of the following statements about "forbearance" as consideration is true?

• Forbearance is not considered valid consideration in any contract

• Forbearance must always involve refraining from an illegal act

• Forbearance cannot be used in unilateral contracts

• Forbearance can be valid consideration if one party agrees not to do something they have the legal right to do

What is a "pre-existing duty" in the context of consideration?

• A promise to help someone without any obligation is valid consideration

• A promise to do something you are already legally obligated to do is not valid consideration

• A promise to make a gift is valid consideration

• A promise to perform an act of charity can be valid consideration