Chapter 12 Flashcards
(28 cards)
What is consideration
The inducement to enter a contract. Something of value made in exchange for a promise
What is legal sufficiency
An element of consideration that consists of either a detriment to the promisee or a legal benefit to the promisor
What is legal detriment
Doing an act one is not legally obligated todo or not doing and act one has a legal obligation to do
What is legal benefit
Obtaining something which they had no legal right to prior
What is adequacy
Not required where the parties have agreed to the exchange, consideration will be regarded as adequate
What are unilateral contracts
Only one party makes a promise. To be binding it must be supported by consideration
What are bilateral contracts
Both parties make a contract that must be supported by consideration
What is an illusory promise
Promise that imposes no obligation on the promisor
Which contracts are not illusory
Output contract
Requirements contract
Exclusive dealings contract
Conditional promises
What is an output contract
Agreement to sell all of one’s production to a single buyer
What is a requirements contract
Purchasers agreement to buy from a particular seller all material of a particular kind they need
What is an exclusive dealings contract
When a manufacturer of goods grants exclusive rights to a distributor to sell its goods within a specific territory
What are conditional promises
A promise, the performance of which depends on the happening or nonhappening of an event to occur
What is a preexisting public obligation and how do they influence contracts
Public duties or Obligations. They do not constitute consideration because there is no legal benefit or detriment.
What is preexisting contractual obligation
Performance of a preexisting contractual duty is not consideration
Modification of preexisting contracts must be supported by what
Mutual consideration
What are substituted contracts
When parties agree to rescind their original contract and enter a new one. Both are supported by consideration
What are the differences between liquidated and unliquidated debt
Liquidated debt is an obligation whose existence and amount is known. Unliquidated debt is an amount under dispute
Does the settlement of liquidated debt constitute consideration
The payment of a lesser sum of money for liquidated debt does not constitute legally sufficient consideration
Does the settlement of unliquidated debt constitute consideration
The payment of a lesser sum is sufficient consideration
What is bargained for exchange
Mutually agreed upon exchange
When is past consideration valid for a contract
When the past consideration is made in writing
How do third parties impact consideration
consideration could be given to or by a part outside the contract
What is promise to pay debt barred by the statute of limitations
A new promise by the debtor to pay the debt renews the running of the statute for a secondary period. (minimum payments, agreement to pay etc.) SOL for contracts are 6 years.
