Consideration Flashcards
What are the key elements of contract formation?
Consideration, Mutual Assent
Mutual Assent includes Offer and Acceptance.
What is required for Acceptance to be valid?
Manifestation of the assent to the terms of the offer in the proper manner
Proper manner includes reasonableness, specific requirements, and options.
What distinguishes a Unilateral contract from a Bilateral contract?
Unilateral involves complete performance; Bilateral involves acceptance by promise.
What is explicit revocation in contract law?
Explicit revocation is a clear and direct withdrawal of an offer, as seen in the Pattberg case.
What is implicit revocation in contract law?
Implicit revocation occurs when there is an inconsistency or when the offeree has knowledge of the offeror’s intent, as demonstrated in the Dodds case.
What does the lapse of an offer mean?
Termination of an offer due to the passage of a specified time or a reasonable time.
When does an offer terminate in a face-to-face meeting?
At the end of the meeting, unless other factors change the situation.
What is the ‘same day rule’ regarding offers sent by mail?
An offer lapses at the end of the day the mail arrives, if authorized by the offeror.
What happens when a counter-offer is made?
It acts as a rejection of the original offer.
What does consideration in contract law refer to?
Legal detriment, but does not imply a loss of any kind.
Does past consideration count in contract law?
No, past consideration does not count because it was not intended as a form of consideration.
What must a performance or return promise be in order to constitute consideration?
Bargained for
A performance or return promise must be sought by the promisor in exchange for his promise and given by the promisee in exchange for that promise.
What is the principle of Reciprocal Inducement in consideration?
Promise must induce detriment & the detriment must induce the promise
Referenced in Pennsy v. American Ash.
What types of promises can be considered in a contract?
Both express and implied
Implied promises are instinct with obligation as noted in Wood v. Lucy.
What is always implied in contractual agreements?
Good faith
What forms can the performance consist of?
- An act other than a promise
- A forbearance or relinquishment of legal right
Legal detriment is illustrated by Hamer v. Sidway.
To whom may the performance or return promise be given?
To the promisor or to some other person
It can be given by the promisee or by some other person.
Do courts generally inquire into the adequacy of consideration?
No
See Restatement (2d) § 79.
What is a gift in terms of consideration?
Given on someone’s own free will without inducement for exchange
Referenced in Carlisle v. T & R Excavating.
What is a Conditional Gift?
Performance only enables the promise to receive the benefit or gift
It does not advance the interests of the promisor.
What is an Illusory Promise?
Conditioned on a contingency entirely within the promisor’s control
Davis v. Joseph J. Magnolia, Inc illustrates optional promises.
What is Past Consideration?
Not consideration because it cannot be induced by a later promise
Example: Past favors cannot lead to future obligations.
What is Moral Consideration?
Based on moral duty or affection, such as parental responsibility
