Consideration

Question 1

Consideration: Definition

Answer 1

Bargained for legal detriment

Question 2

Forms of Consideration

Answer 2

1) performance
2) forbearance
3) promise to perform
4) promise to forbear

Question 3

Adequacy of Consideration

Answer 3

1) courts generally don’t look into the adequacy of consideration
2) even a mere peppercorn will suffice

Question 4

Past Consideration

Answer 4

Generally, past acts or detriment not consideration
EXCEPTION:
1) Expressly requested and expectation of payment
2) (minority) benefit conferred, think rescuing someone

Question 5

Preexisting contractual or statutory duty rule

Answer 5

1) Common law: doing what you already legally obligated to do is not consideration for a promise to pay your more to do merely that.
2) UCC: no preexisting legal duty rule, good faith is the test for changes

Question 6

Exceptions to CL pre-existing duty rule

Answer 6

1) addition or change in performance
2) unforeseen difficulty so severe as to excuse performance
3) third party promises to pay

Question 7

Promise to forgive debt in exchange for part payment

Answer 7

1) if debt is due and undisputed, part payment is not consideration for release
2) If not yet due or disputed, then there will be consideration if offer to pay early for example

Question 8

Legal technical defense: consideration substitute

Answer 8

Written promise to satisfy an obligation for which there is a legal defense is enforceable without consideration

Question 9

Promissory Estoppel: consideration substitute

Answer 9

1) Promise
2) Reliance that is reasonable, detrimental and foreseeable
3) Enforcement is necessary to avoid injustice