Consideration and Promissory Estopple (16%)

Question 1

the gratuitous promise is

Answer 1

a promise to make a gift ≠ consideration

Lacks consideration and is generally unenforceable

Question 2

a promise is unenforceable unless

Answer 2

it supported by consideration

Question 3

Distinguishing “Want of Consideration” from “Failure of Consideration”

Answer 3

a. “Want of Consideration”:
absence of a bargained for exchange
b. “Failure of consideration”:
a party’s failure to preform in accordance with promise (i.e. breach of contract)

Question 4

Legal detriment test stipulates there is consideration when

Answer 4

1. Whether the promisee is doing something they had a legal right not to do or;
2. is foregoing some activity hat they have a legal right to engage in.

Question 5

What is an illusory promise? Effect?

Answer 5

a promise to perform that leaves performance to the discretion to the promising party is illusory and does not constitute consideration

Question 6

An executed gift is

Answer 6

1. intent to give a gift
2. actual or symbolic delivery of the gift

Legally binding

Question 7

Can consideration be satisfied by just a recital?

Answer 7

No contract has been formed

Question 8

Effect of placing a condition on a gratuitous promise?

Answer 8

Does not make it legally enforceable

Question 9

Factors distinguishing a “Condition on a Gratuitous Promise” from “Consideration”
(3)

Answer 9

(a) Factor #1:
Language of the parties
1) Words suggesting benevolence rather than self interest may indicate a gratuitous promise

(b) Factor #2:
Context
1) In the commercial context, gratuitous promises are rare
Much more common in family context
(c) Factor #3:
Benefit to the Promisor
1) where the promisee’s detriment creates no benefit to promisor, more likely a gift than consideration

Question 10

What is the past consideration rule?

-exceptions?

Answer 10

A promise in exchange for something already given or performed is not supported by consideration.

1. a written promise to pay a debt barred by statute of limitations
2. a written promise to pay a debt charged by bankruptcy

Question 11

Promissory Estoppel: When can a promisee enforce a gratuitous promise?
(4)

Answer 11

1. There is a promise
2. Foreseeable reliance: must be foreseeable that the promisee will rely upon it
3. Actual reliance by promisee; and,
4. Injustice without enforcement

Question 12

Injustice without enforcement factors for promissory estoppel
(5)

Answer 12

1) Strength of proof of the other three requirements
2) Blameworthiness of the breach
3) The relative position or equities of the parties
4) The extent to which the reliance was detrimental
5) The availability of alternatives, short of enforcing the promise

Question 13

Promissory Estoppel is used when?

Answer 13

There is not a legally binding contract