Ch. 12 Flashcards
Gratuitous (Gift) Promises
Made without consideration; not legally enforceable
Consideration
The inducement to make a promise enforceable
2 basic elements of Consideration:
- ) Legal Sufficiency
2. ) Bargained-for Exchange
Legally Sufficient
The consideration for the promise must be either a legal detriment to the promisee or a legal benefit to the promisor.
Legal Detriment
- ) The doing of that which the promisee was under no prior legal obligation to do, or
- ) The refraining from the doing of that which he was previously under no legal obligation to refrain from doing.
Legal Benefit
The obtaining by the promisor of that which he had no prior legal right to obtain
Adequacy of Consideration
Law regards consideration as adequate if both parties freely agree to the exchange.
Mutuality of Obligation
In a bilateral contract, each promise is the consideration for the other
Illusory Promise
A statement that is in the form of a promise but imposes no obligation upon the maker of the statement
Output Contract
The agreement of a seller to sell her entire production to a particular purchaser
Requirements Contract
A purchaser’s agreement to purchase from a particular seller all the materials of a particular kind that the purchaser needs
Conditional Promise
A promise, the performance of which depends upon the happening or nonhappening of an event not certain to occur (the condition)
Public Duty
Does not arise out of a contract; it is imposed on members of society by force of the common law or by statute
Preexisting Contractual Duty
A duty, the terms of which are neither doubtful nor the subject of honest dispute
Substituted Contract
When the parties to a contract mutually agree to rescind their original contract and enter into a new one
Undisputed Debt
An obligation that is not contested as to its existence or its amount
Disputed Debt
An obligation whose existence or amount is contested
Bargained-for Exchange
When each party gives each other something in a mutually agreed-upon exchange for his promise or performance
Past Consideration
A promise made on account of something that the promisee has already done is not enforceable
Statute of Limitations
States that legal actions to enforce a debt must be brought within a prescribed period of time after the rights to bring the action arose
