Ch 1:Section 3 - Consideration as a Basis for Enforcement Flashcards
Debt
The promise is or is not given in exchange for something; used to enforce promises to pay a definite sum of money
Quid pro Quo
This for that; bargain of promises
Assumpsit
theme of misfeasance; the promisor undertook an assumpsit to do something, had done it in a manner inconsistent with that undertaking to the detriment of the promisee; promisee must have incurred a detriment b/c in reliance on the promise
Exchange of Promises
when a party had only given a promise in exchange for the promise of another
Consideration (Restatement 71-86)
must be a bargain, in promise there must be a benefit to the promisor AND/OR detriment to the promisee
- *Without consideration, the promise will NOT be enforceable
- Full consideration, sufficient consideration will NOT work**
- CONSIDERATION IS NOT MOTIVE/INTENT** sole focus is on detriment and benefit
Hamer v. Sidway
** Family Contract
** consideration:
-promisor: uncle
-promisee: nephew
Bargain: $$ for forbearance of legal right
Pr benefit: intangible happiness
Pe detriment: lost of legal right
(p. 40, examples)
Gratuitous promise
- Courts will not enforce gift or gratuitous promises but they will enforce promises which are supported by consideration.
- One argument against enforcing gratuitous promises is that enforcement leaves no room for a promisor’s regret or for changed circumstances.
Peppercorn
Token payment, consideration of a trifling value
- - could be used to make a gratuitous promise
p. 39, note 4
unilateral contract
promise for performance
bilateral contract
promise for promise
Dyer v. National By-Products
Is a good faith belief in a contract claim (promise) enough to justify suit in an unclear claim?
Restatement §74
Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless
- *The claim or defense is in fact doubtful b/c of uncertainty as to the facts of the law OR
- *The forbearing of surrendering party believes that the claim or defense may be fairly determined to be valid
Corbin on good faith forbearance (pg. 44)
forbearance is sufficient consideration if there is any reasonable ground that the claimant’s ILL FOUNDED claim belief is just to try to enforce his claim. He must be asserting his claim in good faith
even though invalid, is detriment if good faith
Williston on good faith forbearance (pg. 45)
Forbearance from suit on a CLEARLY invalid claim is insufficient consideration for a promise, forbearance from suit on a claim of doubtful validity is sufficient consideration for a promise if there is a sincere belief in the validity of the claim.
if invalid, good faith belief is not enough to constitute consideration
Moral Obligations
Often not enforced; especially if consideration if absent or if events happened prior to the bargain
– enforcing moral obligations does not give people the opportunity to change their minds and begs the question of what constitutes morality
Mills v. Wyman
Mills actions were done in the past (prior to the promise); no consideration
– Gratuitous promise
Webb v. McGowin
while this is a gratuitous promise(no consideration/ no bargain); the court held to uphold the promise because it would seem unjust not to
(due to the extent of P’s injuries)
Harrington v. Taylor
No consideration for past actions; no bargain
Kirksey v. Kirksey
her moving is a condition to a gratuitous promise
Restatement §86
Promise for benefit previously received is binding
Conditional Gift v. Bargained For Promise
**Where do we draw the line btwn a conditional gift and bargained for exchange: no bright line rule – fact dependent
**be able to explain conclusion on exam
Lake Land v. Columber
Majority: there was consideration because employer gained the non-compete and employee gave up the right to quit (change in position)
Dissent 1: the majority situation could still occur and they could still fire him tomorrow
Dissent 2: ® 3 solutions (different jurisdictions have applied each)
1. No consideration b/c employee hasn’t gotten anything (raise, benefits, …etc) OR **standard answer when applying traditional notions of consideration 2. Future promise of employment OR 3. Consideration is forbearance of firing for not signing the covenant
At will employment
can fire at any time, can leave at any time (MOST WORK)
- can be terminated at any time for any reason
- So prevalent, its hard to apply contract principles to at will situation
For Term Employment
if you sign at contract to work for a certain period of time
- requires cause for termination
- Exchange of promises
- Specific (but not exclusive) list of things that you may be fired for
