Alternatives in the Absence of Consideration

Question 1

General rule

Answer 1

A promise in exchange for something already given or performed is NOT supported by consideration.

Exceptions (these are enforceable)

• a written promise to pay a debt barred by limitations; a
• a written promise to pay a debt discharged by bankruptcy

Question 2

Material Benefit Test (minority rule)

Answer 2

Promise made in recognition of a past benefit conferred enforceable if:

• promisee conferred the benefit on the promisor (not a third party); and
• the benefit is material

Question 3

Promisorry Estoppel

Answer 3

Promisee that reasonably relies to his detriment on gratuitous promise may be able to enforce that promise even without consideration.

4 requirements:

1. A Promise
2. Foreseeable Reliance
3. Actual Reliance (must be induced by the promise)
4. Injustice without enforcement

Factors to analyze “injustice” requirement:

1. Strength or proof of the other three requirements
2. Blameworthiness or willfulness of the breach
3. Relative position or equities of the parties
4. Extent to which the reliance was detrimental; and
5. Availability of alternatives short of enforcing the promise