3. Consideration Flashcards

1
Q

What is required for a promise to be enforceable?

A

A promise must be supported by bargained-for consideration.

Consideration involves an exchange where the promisee sacrifices something of value or limits their freedom.

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2
Q

What constitutes consideration?

A

Consideration involves exchanging a valuable promise for something else of value, like a counterpromise or performance.

A return promise must be bargained for.

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3
Q

What are the two conditions for a promise to be supported by consideration?

A
  • The promisee sacrifices something of value or limits their freedom
  • The promisor’s promise is in exchange for the promisee’s legal detriment.
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4
Q

What is a quitclaim deed in the context of consideration?

A

A quitclaim deed, even if the holder’s claim is doubtful, is sufficient consideration to form a contract.

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5
Q

What are the three forms of performance that may constitute consideration?

A
  • An act other than a promise
  • A forbearance
  • Creation, modification, or destruction of a legal relation.
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6
Q

What can a promisor defend against in terms of gratuitous promises?

A

A promisor can state that the promise is not supported by consideration, there is a want of consideration, or there is legally insufficient consideration.

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7
Q

What does ‘failure of consideration’ mean?

A

A failure of consideration is a claim that the party has not performed in accordance with her promise.

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8
Q

What is the preexisting duty rule?

A

if parties to an existing contract agree to modify the contract for the sole benefit of one of them, the modification will usually be unenforceable at common law for lack of consideration.

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9
Q

Under the UCC, what is required for modifications of existing contracts?

A

The UCC explicitly removes the consideration requirement for modifications of existing contracts.

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10
Q

What is the legal detriment test?

A

A promise is supported by consideration if the promisee gives up something of value and the promisor makes a promise as part of a bargained-for exchange.

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11
Q

Do courts police the equivalence of bargained-for exchanges?

A

No, the inadequacy of consideration is no defense to a breach of contract claim.

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12
Q

What is an illusory promise?

A

An illusory promise is a statement that appears to promise something but does not actually commit the promisor to anything.

a promise to perform that leaves performance to the unlimited discretion of the promising party and WILL NOT constitute consideration.

One common kind of illusory promise occurs when a promisor reserves the right to change his mind, which does not bind the promisor and is illusory.

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13
Q

NOT Illusory

A

Specific conditions where a party has a terminate a contract-not purely based on their discretion or wish

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14
Q

When can an illusory promise become adequate consideration?

A

An illusory promise may become adequate consideration if the time during which the promisor could choose alternative performances has passed.

If the promisor’s right to change his mind is limited by some objective standard, consideration is likely to be found present and the contract upheld

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15
Q

What creates a binding gratuitous transfer?

A

Delivery of a gift with the intent to give it creates a binding gratuitous transfer, preventing the giver from retracting the gift.

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16
Q

Does a false recital satisfy the requirement of consideration?

A

No, the requirement of consideration is not satisfied by a false recital.

17
Q

What constitutes valid consideration in forbearance of a claim?

A

Valid consideration exists when a party agrees to forbear a claim or defense in exchange for a promise or performance by the other party.

18
Q

Is forbearance to assert a claim that proves to be invalid considered valid consideration?

A

No, unless the claim is in fact doubtful or the forbearing party believes it may be valid.

19
Q

What are the three exceptions that will enforce past or moral consideration?

A
  • A written promise to pay a debt barred by the statute of limitations
  • A written promise to pay a debt discharged by bankruptcy
  • Material benefit test.
20
Q

What is the material benefit test?

A

A promise made in recognition of a past benefit conferred is enforceable if the promisee conferred the benefit on the promisor and the benefit is material.

21
Q

Promisor makes a promise in recognition of benefits that the promisor received under the terms of a contract

A

Where the promisor makes a promise in recognition of benefits that the promisor received under the terms of a contract, the promise is NOT enforceable.

22
Q

What happens when a promise is voidable?

A

The promisor may later reaffirm the promise, and it will still be enforceable even without new consideration.

courts will enforce such a promise if the promisor reaffirms a promise made pursuant to an earlier bargained-for exchange that was not enforceable at the time because of infancy.

23
Q

What is a donative promise?

A

Donative promises generally are not enforceable unless supported by consideration or a consideration substitute.

24
Q

What are the three requirements for promissory estoppel?

A
  • Promisor has reason to expect promise will induce reliance
  • Actual reliance by the promisee
  • Injustice may be avoided only by enforcement of the promise.
25
Q

What factors are analyzed to determine the injustice requirement in promissory estoppel?

A
  • Strength of proof of the other requirements
  • Blameworthiness of the breach
  • Relative position of the parties
  • Extent of detrimental reliance
  • Availability of alternatives.
26
Q

What is the primary purpose of the consideration doctrine?

A

To enforce promises that are ‘bargained for.’