Consideration

Question 1

Consideration

Answer 1

At the time of offer/acceptance, each side is promising something they did not have to promise or doing something they don’t have to do. (Mutually bargained for legal detriment)

Question 2

Gift

Answer 2

If no bargain/consideration then no contractual obligation. Promisee detriment providing peace of mind to promisor may be sufficient to establish a bargain.

Question 3

Legal Value Element

Answer 3

“Inadequate” consideration is still detriment, its just a good deal.
- Nominal consideration is NOT detriment ($1) Sham consideration is not detriment (recited in contract, but not actually paid)

Question 4

Pre-Existing Legal Duty

Answer 4

No new detriment for doing or promising to do what you’re already legally obligated to do. Common Law - you need new consideration
- UCC - sale of goods contracts can be modified without new consideration if done in good faith or with written agreement to modify

Question 5

Illusory Promise

Answer 5

Appears to be a promise, but does not actually bind one side to perform = no detriment
- UCC - requirement/output contract is allowed even though one side could technically not be bound. Consideration measured by performance (not at time of offer/acceptance)

Question 6

Substitutes for Consideration

Answer 6

• Past Consideration
• Promissory Estoppel
• Modification Under UCC

Question 7

Past Considertaion

Answer 7

A promise for something that already happened does NOT satisfy the bargain requirement
- Injustice Exception - modernly, a promise made in gratitude for past detriment (non-business deal) is enforceable consideration up to the reasonable value of the past detriment

Question 8

Promissory Estoppel

Answer 8

If there was no legal offer/acceptance, but there is a reasonable detrimental reliance on a promise, the promisee is entitled economic damages only.

Question 9

Modification Under UCC

Answer 9

Modified contract from the sale of goods does not require new consideration