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Question 1

What is a bargain?

Answer 1

Exchange of promises and acts where each party views what they give as the price for what they get

Question 2

If you promise to forbear or actually forbear from performing something you’re legally entitled to perform, can that be a bargain?

Answer 2

Yes

Question 3

What is the bargain theory of consideration?

Answer 3

A bargain equates to consideration

Question 4

When does the consideration substitute apply?

Answer 4

When real consideration is not present

Question 5

What is an example of a consideration substitute?

Answer 5

Promissory estoppel

Question 6

What is promissory estoppel?

Answer 6

If promisee detrimentally, reasonably, and foreseeably relies on a promise, it becomes enforceable

Question 7

If a law school puts up a sign on the bulletin board saying $500 to whoever wins a writing competition, and a student wins, does promissory estoppel apply here?

Answer 7

No, it isn’t necessary, if the student didn’t rely, then you don’t need a consideration substitute, you just use normal consideration

Question 8

What are UCC substitutions for consideration?

Answer 8

• merchant’s firm offer

- modifications

Question 9

If someone pays for the right to keep something open, is merchant’s firm offer the answer?

Answer 9

No, it is just an option contract

Question 10

Does a modification under the UCC require consideration?

Answer 10

Not if it is made in good faith

Question 11

If a modification is made to a contract by changing the item and the price, do you need to use the modification substitute for consideration under the UCC?

Answer 11

No, because there was consideration since both parties gave something up

Question 12

What are promises that raise consideration issues?

Answer 12

• bargain promises
• those involving accord and satisfaction
• promises to waive conditions
• donative promises
• promises based on past or moral consideration

Question 13

What are some bargains that are not consideration?

Answer 13

• nominal consideration
• illusory promises
• promises to do what you’re already legally obligated to do
• promise to surrender/forebear when it is unreasonable

Question 14

Is nominal consideration good enough for a bargain?

Answer 14

No, it is a bargain in form but not in substance, so there’s no real bargain

Question 15

Does nominal consideration make a donative promise enforceable?

Answer 15

No

Question 16

Does nominal consideration make an option contract binding?

Answer 16

Yes, if the option is in writing and proposes an exchange on fair terms

Question 17

How does written revival of a debt that is barred by a technical defense like SOL or bankruptcy work?

Answer 17

Enforceable because the government wants people to pay their debts, but it must be in writing and is only enforceable for the amount written even if that is less than what is owed or if the written amount is more than the debt

Question 18

How do promises that are based on moral obligations work?

Answer 18

If promise was to pay something in exchange for something, then it is enforceable, but if it was just as a moral obligation, then it isn’t

Question 19

If you injure someone and you say you will pay for all the damages because you feel guilty, is that enforceable?

Answer 19

No, no consideration

Question 20

If you promise to surrender or forbear from asserting a legal claim, is that enforceable?

Answer 20

• traditional rule: had to be honest AND reasonable

- modern rule: had to be honest OR reasonable

Question 21

Can a written release be consideration?

Answer 21

Yes

Question 22

If you make an agreement that calls for forbearance, but no time period was stated, what is meant?

Answer 22

Reasonable time

Question 23

If you ask someone to forbear from bringing a claim against you and promise to pay them, and they agree and forbear for 11 months, then sue, did they break the deal?

Answer 23

No, because the promise was for a reasonable time, and 11 months was reasonable

Question 24

Is it essential for there to be equal value in order to be consideration?

Answer 24

No, as long as the contract is not unconscionable

Question 25

What is unconscionable?

Answer 25

Something so unfair that it shocks the conscience

Question 26

What is a good test to see if there is good consideration?

Answer 26

Ask if the promise is causing a legal detriment or forbearance

Question 27

What is the significant minority rule when it comes to consideration?

Answer 27

If a promisor is not giving up legal detriment, it is still good consideration if the promisee receives a benefit

Question 28

If you are a horse jockey and obligated to the horse’s owner to win, and the stable owner comes to you before the race and offers you more money to win, is that enforceable under the two different views?

Answer 28

• majority rule: no because you already had a duty to him to try to win
• minority rule: yes because the promise was to a diff party