Contracts 3 - Consideration Flashcards Preview

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Flashcards in Contracts 3 - Consideration Deck (13):
1

Consideration

A counter-promise or performance given to the promisor by the promisee as a quid pro quo for making the promise.

2

Want of Consideration

Means there was no consideration in the agreement.

3

Failure of Consideration

Means there was consideration but one party breached the contract.

4

Bargained-for and Legal Detriment Test

A promise is supported by consideration if it's based on a bargained for exchange. If promisee is doing something he had a legal right not to do or is foregoing some activity in which he had a legal right to engage.

5

Inadequacy of Consideration

Courts do not police the equivalence of fairness of the exchange for the purposes of applying consideration doctrine. You could always look for defense of unconscionability though.

6

Illusory Promise

A promise to perform that leaves performance to the discretion of the promising party. It wont constitute consideration.

7

Gratuitous Promise

A promise to make a gift. Not legally enforceable. A condition for the gift doesn't count as consideration.

8

Gratuitous Transfer/Executed Gift

Legally binding an enforceable. Requires (1) Intent to give a gift and (2) actual or symbolic delivery.

9

Factors for Distinguishing Condition on a Promise from Consideration

(1) Language - words suggesting benevolence rather than self-interest.
(2) Context - if commercial context, gratuitous promises are rare.
(3) Benefit to the promisor - where promisee's detriment confers no benefit to the promisor, it's more likely a condition.

10

Past or Moral Consideration

A promise in exchange for something already given or performed is not supported by consideration except written promises to pay debts barred by statute of limitations or discharged by bankruptcy.

11

Material Benefit Test

A promise made in recognition of a past benefit can be enforceable if (1) the promisee conferred the benefit on the promisor, not a third party, and (2) The benefit is material. Promise WILL NOT be enforceable if past benefits were contracted for.

12

Promissory Estoppel - 4 Requirements

(1) A promise
(2) Foreseeable reliance
(3) Actual reliance
(4) Injustice without enforcement

13

Injustice Without Enforcement - Factors

(1) The strength of proof of the other 3 requirements.
(2) The willfulness of the breach.
(3) The relative position or equities of the parties.
(4) The extent to which the reliance was detrimental.
(5) The availability of alternatives short of enforcing the promise.