Chapter 12 - Consideration

Question 0

Consideration

Answer 0

Generally, the value given in return for a promise or a performance. The consideration, which must be present to make the contract legally binding, must be something of legally sufficient value and bargained for.

Question 1

Accord and Satisfaction

Answer 1

An agreement for payment between two parties, one of whom has a right of action against the other. After the payment has been accepted or other performance has been made, the “accord and satisfaction” is complete and the obligation is discharged.

Question 2

Covenant not to sue

Answer 2

An agreement to substitute a contractual obligation for some other type of legal action based on a valid claim.

Question 3

Forbearance

Answer 3

The act of refraining from an action that one has a legal right to undertake

Question 4

Past consideration

Answer 4

An act done before the contract is made, which ordinarily, by itself, cannot be consideration for a later promise to pay for the act.

Question 5

Release

Answer 5

A contract in which one party forfeits the right to pursue a legal claim against the other party.

Question 6

Rescission

Answer 6

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made; may be effected through the mutual consent of the parties, by their conduct, or by court decree