Bargained For Exchange

Question 1

Types of Exchanges, Consideration

Answer 1

(Rest. 2nd, 71) A performance or return promise that must be bargained for. Bargained for if sought by the promisor in exchange for his promise and is given by the promise in exchange for that promise

Question 2

Types of Exchanges, Performance

Answer 2

(Rest. 2nd, 71) May consist of:
- an act other than a promise
- forbearance (restraint/self-control)
- creation, modification, or destruction of a legal relation

Question 3

Is there consideration for an agreement made between two parties previously engaged in extramarital affairs when the man, who is bankrupt, agreed to continue making payments to/on behalf of the woman in exchange for $1, “other good and valuable consideration” and release of her claims?

Answer 3

No. Nominal payments do not establish consideration. Courts look at what’s valuable on both sides. Nothing was valuable from her side.

Past past actions cannot be inducement.

In re Greene (1930)

Question 4

Is economic adversity sufficient to change the rental agreement between P and D when P reduces the rent?

Answer 4

No. General economic adversity doesn’t warrant not upholding an agreement. D did not promise to do something they were not already obligated to do -> no sufficient consideration. The parties will need new consideration and a new contract.

Levine v. Blumenthal (1936)

Question 5

Does P’s act of saving D from potentially fatal injury constitute consideration to support a promise? Does D promise to pay damages for saving his life constitute consideration?

Answer 5

• No. Voluntary humanitarian act does not constitute sufficient consideration, support a contract.
• No. Promise to pay after the fact is not enforceable because there’s no mutual motivation (induced return motivation)

Harrington v. Taylor (1945)

Question 6

Settlement of Claims 74

Answer 6

Forbearance to assert or surrender of a claim or defense which proves to be invalid is not consideration unless

A) the claimer defense is in fact doubtful because of uncertainty as to the facts or the law or

B) the forbearing or surrendering party, believes the claim or defense may be fairly determined to be valid