Consideration

Question 1

What is consideration

Answer 1

something of value given by both parties to a contract that induces them to enter into the contract

Question 2

What does a benefit involve?

Answer 2

does not need to be a tangible benefit; a party receives a benefit when they get what they bargained for; the promisor does not need to actually receive anything-it is enough that the promisor gets what they bargained for.

Question 3

What is a detriment?

Answer 3

a relinquishment of any legal right; can take the form of an immediate act, forbearance, or abandonment of an intangible right

Question 4

Hamer v. Sidway

Answer 4

A waiver of any legal right at the request of another party is sufficient consideration for a promise

Question 5

Bargained-for-exchange

Answer 5

bargain theory requires that each party’s promise induces the other

Question 6

Bogigian

Answer 6

valid consideration requires a bargained-for-exchange between parties

Question 7

Nominal consideration

Answer 7

exists when parties intend to promise to be gratuitous but seek to make it binding, creating apparent consideration

Question 8

Adequacy majority rule

Answer 8

the adequacy of that consideration generally does not matter as long as it is not so inadequate as to be constructively fraudulent

Question 9

adequacy minority rule

Answer 9

a party cannot relinquish non valid claims as the basis for consideration

Question 10

peppercorn theory

Answer 10

it does not matter how “small or insignificant” the consideration is as long as it is truly bargained for

Question 11

Modifications common law (Levine)

Answer 11

a modification to an existing contract requires new consideration to be binding

Question 12

Modifications common law (angel)

Answer 12

A modification without additional consideration is valid if it is 1. voluntary agreement between parties
2. prior to full performance
3. unanticipated circumstances
4. fair and equitable

Question 13

UCC 2-209

Answer 13

only applies to the sale of goods; no new consideration Is required, can only be done in writing, and there is a good faith requirement

Question 14

Illusory Promise

Answer 14

Illusory promises are named because they merely hold the illusion of an enforceable promise; The promisor of an illusory promise has the ability to decide whether they preform at all

Question 15

Charitable contributions (Restatement 90)

Answer 15

A charitable subscription is binding under restatment 90 (1) without proof that the promisor reasonably expected the promisee to rely on it

Question 16

Allegheny College

Answer 16

There is an implied promise to undertake the conditions if a charitable gift, even if there is a lack of bargained-for-exchange

Question 17

Congregation Kadimah

Answer 17

A promise for a charitable gift is generally not enforceable in the absence of consideration or reliance on the promise