Consideration Flashcards
What is executory consideration?
Parties make promise to do something after contract formed
What is executed consideration?
At the time of formation of contract, the consideration has been performed
What type of contract is usually executory consideration?
Bilateral
What type of contract is usually executed consideration?
Unilateral
What are the four important rules in relation to consideration?
- Must not be past
- Must move from the promisee
- Need not be adequate
- Must be sufficient
What are the requirements to the exception to the rule that consideration must not be past?
A) Act done at Promisors request
B) Parties understood that act was to be rewarded by payment/benefit (express or implied)
C) Would have been legally enforceable if made in advance
What is the doctrine of freedom of contract?
Courts will not interfere with a bargain freely reached
What is sufficient consideration?
Worth something, doesnt matter how small
What does ‘consideration must move from the promisee’ mean?
Only party who has provided consideration can enforce contract
When may a party already be under an obligation when giving consideration?
- Existing contract between parties
- Public Duty
- Existing contract with third party
Is there usually good consideration where the parties are already contractually bound?
No
What is the exception where consideration can be given for parties already bound by a contract?
Factual consideration
What are the requirements of factual consideration?
- A contracts with B
- B has reason to doubt A will complete
- B promises additional payment for A’s promise to complete on time
- B obtains practical benefit/avoids disbenefit
- Not economic duress/fraud
Is merely carrying out a public duty sufficient consideration?
No
Is performing an obligation under a contract to a third party usually sufficient consideration?
Yes
