Consideration Flashcards

1
Q

Consideration

A

Promise is supported by consideration if based on “BARGAINED-FOR EXCHANGE”

Consideration exists if there is a DETRIMENT to promisee - DID something he had right NOT do to, or FORGOING something he had a right TO do

No policing of adequacy - consideration need not be fair

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2
Q

Illusory promises

A

Promise of performance that leaves performance to unlimited discretion of promisor: is not consideration

e.g. paint my portrait, if I like it I’ll pay you $1000

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3
Q

Gratuitous promises

A

Promises to make a gift are not enforceable due to lack of consideration

Gratuitous TRANSFERS are binding once complete, though

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4
Q

Past or Moral Consideration

A

Promise in exchange for something ALREADY given/performed

General rule: not enforceable

Exceptions: written promise to pay debt if barred by limitations or bankruptcy

Material benefit test (MINORITY rule): promise to compensate for past benefit is enforceable if promisee conferred benefit on promisor and it’s material

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5
Q

Promissory estoppel (4 part test)

A

Reasonable reliance, with detriment, on gratuitous promise may be able to enforce even without consideration. Test:

  • a promise
  • foreseeable reliance
  • actual reliance induced by promise
  • injustice without enforcement
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