Flashcards in Page 14 Deck (28):
What is a bargain?
Exchange of promises and acts where each party views what they give as the price for what they get
If you promise to forbear or actually forbear from performing something you're legally entitled to perform, can that be a bargain?
What is the bargain theory of consideration?
A bargain equates to consideration
When does the consideration substitute apply?
Real consideration is not present
What is an example of a consideration substitute?
What is promissory estoppel?
If promisee detrimentally, reasonably, and foreseeably relies on a promise, it becomes enforceable
If a law school puts up a sign on the bulletin board saying $500 to whoever wins a writing competition, and a student wins, does promissory estoppel apply here?
No, it isn't necessary, if the student didn't rely, then you don't need a consideration substitute, you just use normal consideration
What are UCC substitutions for consideration?
- merchant's firm offer
If someone pays for the right to keep something open, is merchant's firm offer the answer?
No, it is just an option contract
Does a modification under the UCC require consideration?
Not if it is made in good faith
If a modification is made to a contact by changing the item and the price, do you need to use the modification substitute for consideration under the UCC?
No, because there was consideration since both parties gave something up
What are promises that raise consideration issues?
Bargain promises, those involving accord and satisfaction, promises to waive conditions, donative promises, promises based on past or moral consideration
What are some bargains that are not consideration?
Nominal consideration, illusory promises, promises to do what you're already legally obligated to do, promise to surrender/forebear when it is unreasonable
Is normal consideration good enough for a bargain?
No, it is a bargain in form but not in substance, so there's no real bargain
Does nominal consideration make a donative promise enforceable?
Does nominal consideration make an option contract binding?
Yes, if the option is in writing and proposes an exchange on fair terms
How Does written revival of a debt that is barred by a technical defense like SOL or bankruptcy work?
Enforceable because the government wants people to pay their debts, but it must be in writing and is only enforceable for the amount written even if that is less than what is owed or if written amount is more than the debt
How do promises that are based on moral obligations work?
If promise was to pay something in exchange for something, then it is enforceable, but if it was just as a moral obligation, then it isn't
If you injure someone and you say you will pay for all the damages because you feel guilty, is that enforceable?
No, no consideration
If You promise to surrender or forbear from asserting a legal claim, is that enforceable?
Yes, if it was bargained for, reasonable, and in good faith
- traditional rule: had to be honest and reasonable
- modern rule: had to be honest or reasonable
Can a written release be consideration?
If you make an agreement that calls for forbearance, but no time period wAs stated, what is meant?
If you ask someone to for forbear from bringing a claim against you and promise to pay them, and they agree and forbear for 11 months, then Sue, did they break the deal?
No, because the promise was for a reasonable time, and 11 months was reasonable
Is it essential for there to be equal value in order to be consideration?
No, as long as the contract is not unconscionable
What is unconscionable?
Something so unfair that it shocks the conscience
What is a good test to see if there is good consideration?
Ask if the promise is causing a legal detriment or forbearance
What is the significant minority rule when it comes to consideration?
If a promisor is not giving up legal detriment, it is still good consideration if the promisee receives a benefit