Consideration and Promissory Estopple

Question 1

What is a gratuitous promise?

Answer 1

A promise to make a gift. There is no consideration and is generally unenforceable.

Question 2

When is a promise is enforceable?

Answer 2

When it is supported by consideration.

Question 3

Distinguishing want of consideration vs. failure of consideration.

Answer 3

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

Question 4

The 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 and what is its legal 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

What are the requirements for an executed gift and what is its legal effect?

Answer 6

1. Intent to give a gift;
2. Actual or symbolic delivery of the gift.

If both are present, then the transfer is legally binding.

Question 7

Can consideration be satisfied by just only stipulating that it was received?

Answer 7

No, the consideration has to actually be given for an enforceable contract.

Question 8

What is the legal effect of placing a condition on a gratuitous promise?

Answer 8

The condition does not make it a gratuitous any more enforceable.

Question 9

What factors to evaluate in distinguishing a condition on a gratuitous promise v. consideration?

Answer 9

1. Language of the parties: words suggesting benevolence rather than self interest may indicate a gratuitous promise
2. Context: in the commercial context, gratuitous promises are rare and more common in family context
3. Benefit: to the promisor: where the promisee’s detriment creates no benefit to promisor, more likely a gift than consideration.

Question 10

When will past consideration make an agreement enforceable?

Answer 10

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

Exceptions

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

What are the elements required to assert promissory estoppel?

Answer 11

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

Question 12

What factors are evaluated when considering injustice without enforcement for promissory estoppel?

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

When should promissory estoppel be used?

Answer 13

When there is not a legally binding contract.