III. If so, is the deal enforceable by courts?

Question 1

Consideration

Answer 1

A bargained for legal detriment comprised of 2 parts

Question 2

2 parts of Consideration of bargained for legal detriment

Answer 2

1. The promisor bargained for an exchange in which
2. The promisee (a) promises to do something (or in fact does something) but for the contract he or she is not obligated to do or (b) promises not to do something (or in fact does not do something) that, but for the contract, he is she is legally entitled to do
   a. Purpose: Under american law, not all promises are enforceable, there has to be consideration

Question 3

Hamer v. Sidway

Answer 3

• Forbearance is consideration (in this case)

- Legal detriment to both parties

Question 4

Sufficiency

Answer 4

• Must be legal sufficient for a binding contract

- Must have value in the eyes of law

Question 5

Examples of Insufficient Consideration

Answer 5

• love and affection
• magic and conjuring
• nominal consideration (less than $1)
• fungible exchange: same time, place, and type of good or money exchanged
• promise to forbear suit upon invalid claim that promisor neither honestly nor reasonably thinks has possibly validity

Question 6

Is moral obligation sufficient?

Answer 6

No it is not valid consideration

Question 7

Adequacy

Answer 7

So long as the requirement of sufficiency of consideration is met, then there is no additional requirement for the values exchanged to be equivalent

Question 8

Batsakis v. Demotsis

Answer 8

• Mere inadequacy of consideration does not void a contract
• Want of consideration
  
  • Want = no consideration
• Failure of consideration
  
  • failure = breach of contract

Question 9

Schnell v. Nell

Answer 9

• What 3 ways does Nell say there was consideration between the parties?
  1. A promise to pay on part of the plaintiffs to pay him 1¢ (nominal consideration insufficient)
  2. The love and affection he bore his wife and her contribution to purchase of the property (insufficient)
  3. The fact that she expressed her desire to pay them in her will, even if inoperative (moral obligation insufficient)

Question 10

Fiege v. Boehm

Answer 10

The claim that the consideration was based on was made in good faith at the time of its inception, therefore, Forbearance is adequate consideration.

Question 11

The Illusory Promise

Answer 11

“An apparent promise that does not amount to consideration because the promisor reserves a choice for alternative performance.”

ex. I will buy all of the cake I wish for next year from the bakery. needs to be a quantifiable estimate

Question 12

Wood v. Lucy, Lady Duff Gordon

Answer 12

1) Rule: In exclusive dealing contracts or other bilateral contracts, one or more of the promises may be 2) implied in fact
implied promise can be found in event that reasonable efforts would be implied under intention of the parties

Question 13

Sylvan Crest Sand & Gravel Co. v. United States

Answer 13

1) the parties entered into a contract and the promise by the U.S. was the price and the amount
2) the ability to cancel alone did not make it illusory and it is inferred that U.S. is required to give reasonable notice of cancellation
3) the option to cancel, does not wholly defeat consideration

Question 14

UCC 2-309 on termination

Answer 14

cannot be unconscionable, and needs reasonable notification

Question 15

UCC requirements on contracts

Answer 15

needs to have reasonable estimated amount, if there is an increase in the amount needed, needs to be reasonable (wish is not enforceable, but you can say all, need, require)

Question 16

Past consideration

Answer 16

An act or promise that is not deemed to be considered because it occurred prior to, and therefore not in exchange for, a later promise for which enforcement is sought.

Question 17

Hayes v. Plantation Steel Co.

Answer 17

the promise must induce to other party to act (not act then make promise)

Question 18

Mills v. Wayman

Answer 18

1) if there is no bargain for exchange then there is no consideration 2) D saying he will pay him back is past consideration - more of moral obligation, like gift

Question 19

Pre-existing Duty Rule

Answer 19

if you already had a duty to do something under the pre-existing contract and you don’t do anything new or different under “new” contract then there was not sufficient consideration for the “new” agreement and it can’t be enforced

Question 20

Harris v. Watson

Answer 20

as a matter of public policy, individuals should not receive extra wages for doing their jobs, even in times of peril

Question 21

Stilk v. Myrick

Answer 21

• Agreed with decision, disagreed with reasoning behind decision
  2) This court considered the contract void because of the want of consideration (no consideration)
• they had already agreed to their salary and their jobs before they left London and were not at liberty to leave their jobs

Question 22

Lingenfelder v. Wainwright Brewery Co.

Answer 22

2) when a party merely does what he has already obligated himself to do, he cannot demand additional compensation for the work – there is no consideration there – demanding payment for more is a naked promise (nadum pactum)
When Modifying or revising contracts?
When Circumstances change – e.g. building cannot complete the house at the original price, then that might necessitate a new contract
-Requires new or different consideration
-Must be a modification that would necessitate a new contract