Consideration

Question 1

Consideration

Answer 1

Promise is supported by consideration if based on “BARGAINED-FOR EXCHANGE”

Consideration exists if there is a DETRIMENT to promisee - DID something he had right NOT do to, or FORGOING something he had a right TO do

No policing of adequacy - consideration need not be fair

Question 2

Illusory promises

Answer 2

Promise of performance that leaves performance to unlimited discretion of promisor: is not consideration

e.g. paint my portrait, if I like it I’ll pay you $1000

Question 3

Gratuitous promises

Answer 3

Promises to make a gift are not enforceable due to lack of consideration

Gratuitous TRANSFERS are binding once complete, though

Question 4

Past or Moral Consideration

Answer 4

Promise in exchange for something ALREADY given/performed

General rule: not enforceable

Exceptions: written promise to pay debt if barred by limitations or bankruptcy

Material benefit test (MINORITY rule): promise to compensate for past benefit is enforceable if promisee conferred benefit on promisor and it’s material

Question 5

Promissory estoppel (4 part test)

Answer 5

Reasonable reliance, with detriment, on gratuitous promise may be able to enforce even without consideration. Test:

• a promise
• foreseeable reliance
• actual reliance induced by promise
• injustice without enforcement