Consideration in Contract Law: Definition, Types, and Legal Significance

Question 1

Which type of consideration involves an act that has already been performed before the promise was made?

Accepted Answer

Past consideration

Answer

Executed consideration

Answer

Adequate consideration

Answer

Nominal consideration

Question 2

Consideration is sufficient if:

Accepted Answer

It has some value, however small

Answer

It is of equal value to the promise

Answer

It is adequate in the eyes of the law

Answer

It is agreed upon by both parties

Question 3

Which of the following is NOT a requirement for consideration to be valid?

Accepted Answer

It must be in writing

Answer

It must be something of value

Answer

It must be legal

Answer

It must be bargained for

Question 4

Which of the following is a valid form of nominal consideration?

Accepted Answer

A payment of £1

Answer

The transfer of a valuable painting

Answer

The promise to do something illegal

Answer

The provision of a substantial service

Question 5

Which of the following is NOT considered an essential element of consideration?

Accepted Answer

It must be in writing

Answer

It must be bargained for

Answer

It must be valuable

Answer

It must be capable of being ascertained

Question 6

Which of the following best exemplifies executed consideration?

Accepted Answer

Payment for a cup of coffee after it has been consumed

Answer

A promise to pay for a service that will be performed in the future

Answer

A promise to deliver goods on a future date

Answer

A promise to reimburse for expenses already incurred

Question 7

Can consideration be considered inadequate if its value is significantly less than the value of the promise?

Accepted Answer

Yes, inadequacy can render a contract void for lack of consideration

Answer

No, consideration is always adequate as long as it is bargained for

Answer

Only if the inadequacy is so substantial that it constitutes fraud

Answer

Only if the inadequacy is evident to both parties involved

Question 8

Which of the following is a recognized exception to the general rule that past consideration is not valid?

Accepted Answer

When the past consideration was given at the promisor's request

Answer

When the past consideration was of significant monetary value

Answer

When the past consideration was part of a larger contractual arrangement

Answer

When the past consideration was solely beneficial to the promisor

Question 9

In which of the following scenarios would past consideration be considered valid and enforceable?

Accepted Answer

A promise to pay for a service that was performed at the promisor's request prior to the promise

Answer

A promise to pay for a meal that has already been consumed

Answer

A promise to pay for a birthday gift that has already been given

Answer

A promise to repay a debt that is beyond the statute of limitations

Question 10

Which of the following accurately describes executed consideration?

Accepted Answer

It arises when one party has already fulfilled their contractual obligations

Answer

It is always legally binding, regardless of the adequacy of the consideration

Answer

It can only be provided in exchange for a promise

Answer

It is not recognized in common law legal systems

Question 11

Is it essential for the value of consideration to be equal to the value of the promise in order for a contract to be valid?

Accepted Answer

No, consideration is adequate as long as it has some value

Answer

Yes, otherwise the contract may be void for lack of consideration

Answer

Only if the promise is made under seal

Answer

Only if the consideration is provided in the form of money

Question 12

Which of the following is NOT a recognized form of consideration?

Accepted Answer

A past benefit received

Answer

A promise to perform an action

Answer

Payment of money

Answer

Transfer of property rights

Question 13

Can forbearance to act constitute valid consideration in contract law?

Accepted Answer

Yes

Answer

No

Answer

Only if the forbearance is for a specific period of time

Answer

Only if the forbearance is for a significant period of time

Question 14

Which characteristic differentiates valid consideration in contract law?

Accepted Answer

Consideration can take various forms, including non-monetary value.

Answer

Consideration must match the value of the exchange.

Answer

Executed consideration precedes contract formation.

Answer

Consideration is exclusively a future promise to act.

Question 15

Which of the following is an example of valid executed consideration?

Accepted Answer

A promise to pay for goods that have already been delivered

Answer

A payment in exchange for a future promise to deliver goods

Answer

A promise to perform a future service in exchange for a past benefit

Answer

A gratuitous promise to donate money to charity

Question 16

When can a promise of a gift be legally enforceable?

Accepted Answer

When it is made in return for a nominal consideration

Answer

Never

Answer

When it is made in writing

Answer

When it is evidenced by a past benefit

Question 17

The doctrine of promissory estoppel primarily serves to:

Accepted Answer

Create a binding contract even in the absence of consideration

Answer

Prevent parties from making promises they do not intend to keep

Answer

Allow a party to withdraw from a contract based on unforeseen circumstances

Answer

Impose a legal duty to act fairly during negotiations

Question 18

Which of the following is an example of a public policy exception to the requirement of consideration?

Accepted Answer

Contracts for the provision of essential services

Answer

Contracts for the sale of land

Answer

Contracts between minors

Answer

Contracts for the purchase of goods over a certain value

Question 19

The rule in Pinnel's Case states that:

Accepted Answer

A smaller sum of money cannot be accepted as full satisfaction of a larger debt

Answer

A payment made before the due date discharges the debt

Answer

A contract can be modified by subsequent agreement

Answer

Consideration for a contract must be executed before the contract is legally binding

Question 20

Which of the following is a key element of the doctrine of part performance in contract law?

Accepted Answer

The performance must be substantial and unequivocal

Answer

The contract must be in writing

Answer

The party relying on the doctrine must have acted in bad faith

Answer

The contract must be for the sale of land or goods

Question 21

Which of the following is NOT considered a valid form of consideration in contract law?

Accepted Answer

Performing an existing legal obligation

Answer

Transferring property rights

Answer

Promising to pay money

Answer

Refraining from exercising a legal right

Question 22

In the landmark case of Stilk v Myrick, what was the court's ruling?

Accepted Answer

Sailors were not entitled to additional payment since they were already obligated under their contract.

Answer

Sailors were entitled to additional payment for extra work during the voyage.

Answer

The shipowner could deduct the cost of extra work from the sailors' wages.

Answer

The contract was void due to lack of consideration.

Question 23

When can past consideration be considered valid in contract law?

Accepted Answer

If it was provided at the request of the promisor

Answer

Under no circumstances

Answer

If it is supported by a written agreement

Answer

If it fulfills a moral obligation

Question 24

In the case of Thomas v Thomas, what was the court's ruling regarding the enforceability of a promise?

Accepted Answer

The promise was enforceable despite not being in writing because it was supported by consideration.

Answer

The promise was not enforceable because it lacked consideration.

Answer

The promise was enforceable because it was made under seal.

Answer

The promise was enforceable because it was made in exchange for a promise to give up smoking.

Question 25

Consideration in contract law can be classified into which two main types?

Accepted Answer

Executed and Executory

Answer

Adequate and Inadequate

Answer

Past and Future

Answer

Legal and Illegal

Question 26

Which of the following is NOT a characteristic of valid consideration in contract law?

Accepted Answer

Must be in writing

Answer

Must be bargained for

Answer

Must be sufficient

Answer

Must be legal

Question 27

What does the 'adequacy of consideration' refer to in contract law?

Accepted Answer

The value of the consideration must be sufficient to support the promise, even if it's not equivalent to the value of the promise.

Answer

The consideration must be something that is legally recognized as valuable.

Answer

The consideration must be something that has a tangible monetary value.

Answer

The consideration must be fair and reasonable to both parties.

Question 28

Which of these is a primary benefit of consideration in contract law?

Accepted Answer

It transforms a mere promise into a legally binding agreement.

Answer

It guarantees that a contract will be free from any fraudulent activities.

Answer

It ensures that the parties involved will always perform their obligations.

Answer

It requires all contracts to be in writing, making them more secure.

Question 29

Which of the following is a recognized exception to the general rule requiring consideration for a promise to be legally enforceable?

Accepted Answer

Promissory estoppel, where a promise is relied upon to the promisor's detriment.

Answer

Mistake, where parties make a fundamental error in their agreement.

Answer

Frustration of contract, where an unforeseen event makes performance impossible.

Answer

Illegality, where the contract's purpose is unlawful.

Question 30

What is the general rule regarding past consideration in contract law?

Accepted Answer

Past consideration is generally insufficient to support a new promise.

Answer

Past consideration is always sufficient to support a promise.

Answer

Past consideration is irrelevant to the validity of a contract.

Answer

Past consideration is sufficient if it was requested by the promisor.

Question 31

How does consideration in contract law differ from a gift?

Accepted Answer

Consideration involves an exchange of value, while a gift is a voluntary transfer of property without expectation of return.

Answer

There is no difference between consideration and a gift in contract law.

Answer

Gifts are legally enforceable, while consideration is not.

Answer

Consideration must be in writing, while gifts can be verbal.

Question 32

Which of the following is NOT considered a valid form of consideration in contract law?

Accepted Answer

A promise to perform an existing legal duty that one is already bound to perform.

Answer

A promise to pay a sum of money.

Answer

A promise to provide a service that is valuable to the other party.

Answer

A promise to refrain from doing something that one has the legal right to do.

Question 33

A promise to pay a debt that is already legally enforceable is categorized as:

Accepted Answer

Past consideration, which is generally not sufficient to support a new promise.

Answer

Good consideration, which is a specific type of consideration used in certain situations.

Answer

Executory consideration, where the promise is made in exchange for a future act.

Answer

Sufficient consideration, as it fulfills the requirement of a valuable exchange.

Question 34

What does the principle 'consideration must be sufficient but need not be adequate' mean in contract law?

Accepted Answer

The consideration must be something of value in the eyes of the law, but its value does not have to be equal to the value of the promise it is supporting.

Answer

The consideration must be fair and reasonable to both parties, taking into account their respective bargaining positions.

Question 35

Consideration is the value exchanged for a promise. Which of the following is NOT considered valid consideration?

Accepted Answer

A promise to perform an existing legal obligation.

Answer

Transfer of property.

Answer

A promise to pay a debt.

Answer

Forbearance.

Question 36

In the landmark case of *Foakes v Beer*, it was established that:

Accepted Answer

A promise to accept a smaller sum in full satisfaction of a larger debt is not binding unless supported by fresh consideration.

Answer

A promise to pay additional money for work already contracted to be done is always enforceable.

Answer

Past consideration can support a promise.

Answer

A promise made under duress is legally binding.

Question 37

Which of the following is an example of executed consideration?

Accepted Answer

Payment for goods already received.

Answer

A promise to perform a service in the future.

Answer

A promise to forgive a debt.

Answer

A promise to pay for goods in the future.

Question 38

For a promise to be legally enforceable, consideration must be:

Accepted Answer

Sufficient but need not be adequate.

Answer

Requested by the promisor.

Answer

Valuable and adequate.

Answer

Detrimental to the promisor.

Question 39

Which of the following is a legal principle that allows a promise to be enforced even if it lacks consideration?

Accepted Answer

Promissory estoppel

Answer

Mutual assent

Answer

Statute of Frauds

Answer

Equitable estoppel

Question 40

In a unilateral contract, consideration is typically:

Accepted Answer

An act in exchange for a promise.

Answer

Past consideration.

Answer

A promise in exchange for a promise.

Answer

Executed consideration.