Consideration Flashcards
What is the definition of Consideration?
A promise of legal value from the promisee to the promisor
An act to do or not do something
What are the 3 types of Pre-existing duty?
Performance of duty ALREADY owed to either
1. Third-party
2. Promisor
3. Imposed by law
What are the rules of consideration?
It must move from the promisee
It must not be past
It must be sufficient but need not be adequate
What is past consideration?
Not Enforceable
When the promisor pays for something they have already received. There is no bargain for exchange so there is no consideration.
Restatement Sec. 71: What is Bargain for Exchange?
A Type of Consideration
A performance or return promise must be bargained for and is bargained for if:
1) It is wanted by the promisor in exchange for the promisee’s promise
2) It is given by the promisee in exchange for that promise
Restatement Sec. 77: Illusory Promise
Empty promises manifesting no commitment
When is a modification enforceable?
For modification to be enforceable must have new considerations that did not exist in the original contract
Exceptions to preexisting legal duty rule
1) New or different consideration offered - more work for more money
2) Honest dispute over duty - didn’t know duty was to do or give more
3) Unforeseen circumstances RSC 89
Restatement § 17 (Requirements of a Bargain)
Offer and Acceptance (Mutual Assent)
Restatement § 71 (Requirement of Exchange)
Something is bargained for if it is sought by the promisor in EXCHANGE for his promise and is given by the promisee in EXCHANGE for that promise.
Restatement Second Contracts § 71 (Consideration)
(1) A performance or a return promise must be bargained for.
(2) It is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.
(3) The performance may consist of a promise, an act, or agree to not act
(4) Can involve a third party
Bargain definition, sec. 71
An agreement to exchange promises or to exchange a promise for a performance or to exchange performances.
Manifestation of intention
The external expression of the intention
Illusory promises; mere statements of intention
When someone uses words that sound like a promise in which that person’s performance is entirely optional. If they can change their mind, then is it not an enforceable promise.
