Chapter 10 Consideration Flashcards
What is consideration?
The value given in return for a promise.
What are the elements of consideration?
1) Must be legally sufficient value.
2) There must be a bargained-for exchange.
What is considered legally sufficient value?
1) A promise to do something that one has no prior legal duty to do (to pay on receipt of certain goods)
2) The performance of an action that one is otherwise not obligated to undertake (such as providing accounting services)
3) The refraining from an action that one has a legal right to undertake (called a forbearance)
What is a forbearance?
The act of refraining from an action that one has legal right to undertake.
What is considered bargained for exchange?
The item of value must be given or promised by the promisor (offeror) in return for the promisee’s promise, performance, or promise of performance.
Preexisting Duty
A promise to do what one already has a legal duty to do does not constitute legally sufficient consideration. (A Sheriff cannot collet reward for information leading to the capture of a criminal)
Unforeseen Difficulties
If during the performance of a contract, extraordinary difficulties arise that were totally unforeseen at the time the contract was formed, a court may allow an exception to that rule.
What is a rescission?
A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made.
What is a past consideration?
An act that has already taken place at the time a contract is made and the ordinarily, by itself, cannot be consideration for a later promise to pay for the act.
What is liquidated debt?
A debt whose amount has been ascertained, fixed, agreed on, settled, or exactly determined.
What is accord and satisfaction?
A common means of settling a disputed claim, whereby a debtor offers to pay a lesser amount than the creditor purports to be owned.
What is an unliquidated debt?
The opposite of a liquidated debt. The amount of the debt is not settled, fixed, agreed on, or ascertained, or determined, and reasonable persons may differ in the amount owed.
What is a release?
An agreement to substitute a contractual obligation for some other type of legal action based on a valid claim.
What is a promissory estoppel?
A doctrine that can be used to enforce a promise when the promisee has justifiably relied on it and when justice will be better served by enforcing the promise.
What are the requirements to establish promissory estoppel?
1) There must be a clear and definite promise.
2) The promisee must justifiably rly on the promise
3) Reliance is substantial
4) Justice will be served by enforcing promise
