Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
10 Cards in this Set
- Front
- Back
|
Consideration |
- Legal value (not necessarily "economic" or monetary value) - Bargained for, and - Given in exchange for an act or a promise - Purely gratuitous promises are not enforceable since they are not supported by consideration |
|
|
Legal Value of Consideration |
- Consideration can be: -- Doing an act (unilateral contract), or -- Promising to do an act (bilateral contract) -- That the promise has no prior legal duty to do (i.e., the he does not have to do) -- Promisee may also refrain from doing, or promise not to do, something that he has the legal right to do. |
|
|
Bargained-For Exchange |
- A promisee's act or promise must have been bargained for and given in exchange for the promisor's promise. |
|
|
Illusory Promise |
- If promisee's promise really does not bind promissor to do or refrain from doing anything, promise is illusory and cannot be consideration |
|
|
Preexisting Duties |
- As a general rule, promising to perform a preexisting duty is not consideration. Promisor in such a case has effectively made a gratuitous promise. |
|
|
Contract Modification |
- Includes preexisting contractual duties: -- General common law rule is an agreement to modify an existing contract requires mutual consent and new consideration |
|
|
Modifications to a sale-of-goods contract |
- CISG & UCC: Agreement to modify a new contract for the sale of goods, no new consideration. |
|
|
Preexisting Duties & Agreements to Settle Debts |
- Liquidated debts are debts in which parties have no good faith dispute about the existence or amount of the debt. - A creditor's promise to discharge a liquidated debt for part payment of the debt at or after its due date is unenforceable for lack of consideration - However, if debtor offers to do something he has no preexisting duty to do (i.e., repay the loan early), creditor's promise is enforceable - Unliquidated debts are debts in which there is a good faith dispute about the existence or amount of the debt. -- Settlement of an unliquidated debt is known as an accord and satisfaction, accord and satisfaction settlement agreements are enforceable |
|
|
Past Consideration |
- an act that was performed, or a benefit given, in the past that was not bargained for or given in exchange for the current promise, thus it cannot be consideration |
|
|
Exceptions to Consideration Requirement |
- Promissory Estoppels - a promise that the promisor should be reasonable except to induce reliance; -- Reliance on the promise as a result of that reliance because the promisor did not do what he promised to do |
