Obstacle to enforcement of K Flashcards
Consideration
“a bargained for exchange that sustains some detriment”
bargained-for legal detriment
it is ALWAYS person specific -
what did he bargain for?
Forms of consideration
- performance
- forbearance - not doing something legally entitled to do
- promises to perform
- promise not to forbear
bargained for issue
consideration must be asked for by promisor IN EXCHANGE FOR her promise
Legal detriment
If you have a legal entitlement to do something and you do not do it for a deal, then it’s consideration.
promises alone for consideration
YES - consideration even if no performance.
Ex. B promises to buy S house and S promises to sell his house to B. THERE IS CONSIDERATION.
Illusory promise
NOT OKAY
ex. B promises to buy S hues and S promises to sell his house, but changes mind. NO .
Contingency for promises for consideration valid?
YES. Good faith that other person will get their shit together and fulfill promise.
Adequacy of consideration
It is not at issue - courts will not inquire into the adequacy of consideration because peppercorns something something. GOOD ENOUGH.
Nominal consideration
SHAM transaction - dad selling his house to his daughter for $1 is a joke. It’s not a true bargained for exchange. courts will NOT enforce this.
Past consideration
NOT VALID FORM OF CONSIDERATION.
Ex. Apu saves lisa. Homer promises to pay $30k. Homer changes his mind. Promise enforceable?
Bargained for exchange? NO. Past consideration. Gift promise made in recognition of the help NOT A CONTRACT. GIFT PROMISE.
must be current consideration.
Exception to past consideration
Express request and expectation of payment
Ex. request Apu to save Lisa, knowing Apu would expect to be paid for services.
(McGowan v. Webb) - subsequent promise enforceable, there was immediate benefit conferred.
Preexisting contractual or statutory duty rule
Common Law different from Art. 2.
Gen: What you are already legally required to do is not consideration for a promise to pay you more to do merely that. you need new consideration to modify K governed by common law.
Alaska fish packers K -
you can’t get more money for what you already K’d for.
What if SNL asks her specifically for a certain song when AShley was going to sing another song?
Then it’s new consideration -
Exception - unforeseen difficulty to excuse performance
is party still performs when the circumstances become harder, then more money for a preexisting legal duty is valid. NO ONE FORESAW the difficulty.
Exception - 3d party promise to pay
If a 3d party makes an additional promise to Ashley the same legal performance then its VALID.
ARTICLE 2 - PREEXISTING RULE?
modification is OKAY as long as it’s made in good faith
Ex: S Ks to sell widgets to B for 1K. S tells B that it can’t deliver widgets for less than 1300. B promises to pay the additional 300. S delivers. Does B have to pay the additional 300?
YES. It’s a mere technicality. Must be good faith. Must be merchants. Must be reasonable. Extortion not okay.
Part Payment as consideration for release (promise to forgive balance of debt)
Part payment is not consideration for it’s release.
- is debt due and undisputed?
- then NO.
Can you release a debtor if debt is due and they pay part?
NO.
What if creditor allows you to pay the debt early for a different amount?
YES – creditor gave new consideration in exchange for your faster payment.
Consideration substitute: written promise to pay debt barred by some technical defense like an SOL
Written promise to satisfy to which you have legal defense, it is still enforceable even though no new consideration for it
Ex. D owes C $1000. SOL passes and C can’t collect. D says sorry I fucked up, and WRITES to him “i know I owe you a grand but I’ll pay you $600 instead.” Valid?
YES. new written promise for $600 enforceable even without consideration.
Promissory estoppel
- promise made
- reliance reasonable, detrimental, foreseeable
- enforcement necessary to avoid injustice
Lack of capacity
- infants (under 18)
- mental imcompetents
- intoxicated persons IF OTHER PARTY HAS REASON TO KNOW
consequences of incapacity - right to disaffirm by person without capacity
if you fuck up, then the older person can’t sue you for failure to perform.
If you fully performance but lack capacity, then you can collect as a minor since you did it.
Implied affirmation by retaining benefit after gaining capacity
VALID if you hang on to the benefit when you reach capacity. If you buy a car at 17 and don’t pay and fuck around on the K it’s fine, but if you keep the benefit at 18 then your’e screwed.
liability for necessities
a person who does not have capacity is legally obligated to pay for things that are necessary (food, clothing, med car or shelter) but liability based on quasi contract law, not contract law.
Statute of Frauds defense
designed to prevent fraudulent claims.
Is the contract subject matter fall within the SOF?
- promise in consideration of marriage
- promise by executor to pay obligation of estate from his own funds
- promise to answer the debts of another
- service contract not capable of being performed within 1 year from time of contract
- Transfers of interest of real property for term of more than one year
- SALE OF GOODS OVER $500
“H claims that W agreed to renounce any claim to property that he owned prior to the marriage if he would marry her - is this an SOF?
YES. HOLLA WE WANT PRENUP.
consideration: renounce and claim to property
performance: marriage
“F funeral home claims that E executor of D promised that he would personally pay for D’s funeral”
YES - Statute of Frauds.
D would uusaly pay, so better get it in writing that it’s someone else.
Promise to answer for debts of another”
not merela a promise to pay but rather a promise to pay if someone else does not - GUARANTEE.
B buys paint from S on credit. B does not pay S. S claims that T promised she would pay for paint he delivered to B. Is T’s promise within the SOF?
NO.
S class that G promised to pay for the paint if B defaulted. Is Gs promise within SOF?
YES. Specific to the person and language specific to a guarantee.
