Consideration Flashcards
What is Consideration
bargained for exchange of legal value OR benefit to the promisor or burden to the promisee
Illusory Promise
A lack of consideration, or if only one party is bound to perform.
Is adequacy of consideration necessary?
No, it is not relevant to contract law
UNLESS FOUND TO BE TOKEN CONSIDERATION or SHAM CONSIDERATION
Past Consideration
An exchange for something already done is not consideration.
EXCEPTION: past consideration is unenforceable because of a technical defense. (Obligation will be enforceable IF: new promise, in writing, or partially performed. (EXAMPLE PROMISE TO PAY AFTER SOL RUNS)
Act that benefitted promisor and was performed at promisor’s REQUEST or in response to an EMERGENCY, A subsequent promise to pay for that act will be enforceable.
What is a bargained for exchange
Act or Forbearance by Promisee
Preexisting Legal Duty Not To Perform
COMMON LAW: Doing what you already legally obligated to do.
NOT CONSIDERATION
Modification at Common Law
You need new consideration
Exceptions to the Preexisting Legal Duty
New or Different Consideration is Promised; Promise to ratify voidable obligation; duty is owed to a third party; honest dispute; unforeseen circumstances sufficient to discharge a party
Under the UCC is additional Consideration Need to Modify a Contract?
No
Will Forbearance to Sue be sufficient consideration?
Yes, if claims is valid or claimant thought in good faith claim was valid.
Part Payment Sufficient Consideration?
if debt is due and undisputed part payment is not consideration for release.
If debt is not due or is disputed party payment is sufficient consideration for release.
Consideration Substitutes
Promissory Estoppel/Detrimental Reliance
Promissory Estoppel in Consideration
Consideration is not necessary if facts indicate that promisor should be estopped from not performing.
Elements of Promissory Estoppel of Consideration
Promisor reasonably expect to induce action or forbearance, of a definate and substantial character; and such action or forbearance is in fact induced.
