Which of the Following Statements Is TRUE

question 9

Multiple Choice

Which of the following statements is TRUE?

• A)Under the doctrine of consideration, a contract exists only if both parties receive some type of benefit.
• B)The "peppercorn theory" demonstrates that consideration must be sufficient, but it does not have to be adequate.
• C)The "peppercorn theory" demonstrates that consideration must be adequate, but it does not have to be sufficient.
• D)The decision in Gilbert Steel Ltd v University Construction Ltd stands for the proposition that a person cannot give good consideration for a new contract by promising to perform a pre-existing obligation that is owed to a third party.
• E)The phrase "quantum meruit" (which means "you get what you deserve") is used in a case of promissory estoppel to explain that equity will not provide assistance to a person who acted inequitably.

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Definitions:

Opportunity Cost

The price paid for not choosing the second-best option during decision-making.

Higher Opportunity Cost

The increased potential loss of choosing one option over another, indicating a sacrifice of higher value alternatives.

Absolute Advantage

The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Comparative Advantage

The capacity of a nation, person, business, or area to generate a product or offer a service with a smaller opportunity cost compared to its rivals.