Consideration & Promissory Estoppel

Question 1

Preexisting Duty Rule

Answer 1

A promisor cannot provide consideration where that consideration is a duty the promisor is already obligated to perform.

Question 2

Two Types of Consideration (Majority v. Minority)

Answer 2

Bargained-for exchange

Benefit-detriment: Either a benefit to the promisor or a detriment to the promisee

Question 3

Legal Detriment

Answer 3

Whether the promisee is doing something he had a legal right not to do or is forgoing some activity in which he had a legal right to engage.

Question 4

Insufficient v. Inadequate v. Failure of Consideration

Answer 4

Insufficient: No consideration (gratuitous)

Inadequate: Usually doesn’t matter, courts generally let the parties decide what is adequate.

Failure of: A party’s failure to perform their consideration

Question 5

Illusory Promise

Answer 5

Promise to perform that leaves performance to the discretion of the promisor.

Question 6

Gratuitous Promises v. Executed Gifts

Answer 6

Promises of gifts are not binding.

Once a gift is given, the gift becomes a legally binding gratuitous transfer and is irrevocable.