Chapter 12: Consideration Flashcards
Consideration
Inducement to make a promise enforceable.
Gratuitous promise
Promise made without consideration.
Legal sufficiency
Benefit to the promisor or detriment to the promisee.
Legal detriment
(1) doing an act that one is not legally obligated to do or;
(2) refraining from doing an act that one has a legal right to do
Legal benefit
Obtaining some thing to which one has no legal right.
Illusory promise
Promise imposing no obligation on the promisor.
Output contract
Agreement to sell all of one’s production.
Requirements contract
Agreement to buy all of one’s needs.
Exclusive dealing
Sole right to sell goods in a defined market.
Conditional promise
Obligations contingent upon a stated event.
Pre-existing public obligations
Performance of public duties such as those imposed by tort or criminal law is neither a legal detriment or a legal benefit.
Pre-existing contractual duty
Performance of a pre-existing contractual duty is not consideration.
Modification of a pre-existing contract
Under the common law, a modification of a pre-existing contract must be supported by mutual consideration; under the Uniform Commercial Code a contract can be modified without new consideration.
Substituted contract
Parties rescind their original contract and enter into a new contract.
Settlement of an undisputed debt
Payment of a lesser sum of money to discharge an undisputed debt does not constitute legally sufficient consideration.
Settlement of a disputed debt
Payment of a lesser sum of money to discharge a disputed debt is legally sufficient consideration. 
Disputed debt
Obligation whose existence or amount is contested.
Bargained-for exchange
Mutually agreed-upon exchange.
Past consideration
Unbargained-for past events.
Promise to pay debt barred by the statute of limitations
A new promise by the debtor to pay the debt renews the running of the statute of limitations for a second statutory period.
Statute of limitations
Time period within which a lawsuit must be initiated.
Promise to pay debt discharged in bankruptcy
May be enforceable without consideration
Voidable promises
A new promise to perform a voidable obligation that has not been previously avoided is enforceable.
Moral obligation
A promise made to satisfy a pre-existing moral obligation is generally unenforceable for lack of consideration.
Promissory estoppel
Doctrine that prohibits a party from denying his promise when the promisee takes action or forbearance to his detriment reasonably based upon the promise.
Promises under seal
Where is still recognized, the seal acts as a substitute for consideration.
