CONSIDERATION Flashcards
CONSIDERATION
To be enforceable, a contract must be supported by consideration. Generally, consideration requires a bargained-for exchange of something of legal value from each party. To be bargained for, the promise must induce the detriment and the detriment must induce the promise. (Quilt case where acceptance is “give me the number.” Finder’s fee)
CL CONSIDERATION
BARGAINED FOR EXCHANGE
LEGAL VALUE
SUBSTITUTES (WRITTEN PROMISE, PROMISSORY ESTOPPEL)
CL BARGAIN FOR EXCHANGE
Detriment and detriment promise is consideration
ACTS OF FORBEARANCE FOR CONSIDERATION
MAY BE CONSIDERATION IF IT BENEFITS PROMISEE ( CASH INSTEAD OF CHECK, PAY SOONER)
MORAL CONSIDERATION
NOT EFFECTIVE
PRESENT CONSIDERATION IS
i. New Promise in Writing
ii. Partially performed
iii. Request or Emergency: Promise to pay
LEGAL VALUE FOR CONSIDERATION IS
PEPPERCORN
PRE-EXISTING OBLIGATIONS AS CONSIDERATION
Is not consideration unless it is:
i. New or different consideration
ii. Ratify a voidable obligation (Written promise barred SL)
iii. Duty is to a third person
iv. Honest dispute as to duty
v. Unforeseen circumstances for discharge
CL SUBSTITUTE CONSIDERATION
WRITTEN PROMISE OVER SOL
PROMISSORY ESTOPPEL
PROMISSORY ESTOPPEL
PROMISE
FORESEEABLE RELIANCE
ACTUAL RELIANCE
INTEREST OF JUSTICE
UCC 2 CONSIDERATION
- Merchant Firm Offer
a. Merchant offer
b. Writing
c. Singed Memo
d. Assurances to remain open - Good Faith Modification
ILLUSORY CONSIDERATION
Reservation of an unqualified right to cancel or withdraw from a contract at any time may amount to an illusory promise. If the right to cancel is restricted in any way the promise is not illusory and there is a valid consideration.
GIFT OR BENEFIT REST 2ND
If consideration is lacking courts may find bargain for exchange where (i) Party gave a benefit, (ii) party did not intent that benefit to be a gift. Subject to proportionality.
