Promises Binding without Consideration

Question 1

Promises Binding Without Consideration

Answer 1

There are a number of circumstances in which a promise will be enforceable despite the fact that it is not supported by consideration

Question 2

Promise to Perform a Voidable Duty

Answer 2

A new promise to perform a duty that is viable will be enforceable despite the absence of consideration, provided that the new promise does not suffer from anything that would make it, in turn, voidable
- example, child affirming contract when they reach age of majority

Question 3

Promise to Pay Benefits Received - Material Benefit Rule

Answer 3

Material benefit rule - when a party performs an unrequested service for another party that constitutes a material benefit
Need to expect compensation

Question 4

Material Benefit Rule - Modern Trend

Answer 4

Permits the performing party to enforce a promise of payment made by the other party after the service is rendered

Question 5

Material Benefit Rule - Common Law

Answer 5

Such a promise would be unenforceable due to lack of consideration

Question 6

Quasi-Contract

Answer 6

Implied in fact
No price set
Reasonable value of her services
Refused to pay

Question 7

Promissory Estoppel - Requirements

Answer 7

Referred to as a consideration substitute
Detrimental reliance
3 Requirements - A promise is binding if:
1. The promisor should reasonably expect it to induce action or forbearance on the part of the promisee or a third party
2. The promise does induce such action or forbearance; and
3. Injustice can be avoided only by enforcement of the promise

Question 8

Promissory Estoppel - Damages

Answer 8

Reliance Damages

Question 9

Promissory Estoppel - Contract?

Answer 9

Need a valid contract

Question 10

Promissory Estoppel - Exception to the reliance requirement for charitable subscriptions

Answer 10

Charity presumed to rely without proof

Question 11

Promissory Estoppel - Construction contracts and promissory estoppel

Answer 11

An agreement not to revoke a sub-bid offer can be enforceable under the theory of promissory estoppel.
General contract is not bound to a sub-bid - can enter into a subcontract with another subcontractor for a lower price

Question 12

To what extent is Material Benefit Rule Enforced?

Answer 12

The Material Benefit Rule is enforced only to the extent necessary to prevent injustice
Not enforced if the promisor has not be unjustly enriched

Question 13

Promise to Pay a Debt Barred by the Statute of Limitations or Bankruptcy

Answer 13

A new promise to pay a debt after the statute of limitations has run is enforceable without any new consideration. When the new promise is an express promise, most states require that the new promise be in writing and signed by the debtor. In addition, a new promise may be implied when the obligor (i) voluntarily transfers of something of value (e.g., money, negotiable note) to the obligee as interest on, part payment of, or collateral security for the prior debt, (ii) voluntarily acknowledges to the obligor the present existence of the prior indebtedness, or (iii) states to the obligee that the statute of limitations will not be pled as a defense.

A new promise made to pay a debt discharged in bankruptcy is enforceable without any new consideration. While there must an express promise to pay rather than a mere acknowledgment or partial payment of the discharged debt, the new promise need not be in writing.