Contracts

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Contracts

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Promises that are legally enforceable

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bargain

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exchange of promises or
promise for performance

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modern definition of consideration

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any factor that makes a contract enforceable

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nominal bargain

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bargain in form but not substance

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donative promise

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a promise to give a gift.

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Illusory promise

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i. A statement that appeared to be a real promise, but in fact did not commit the promisor to any more than what he might later desire to do, or gave him a free way out of his apparent commitment.

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Mutuality

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Both parties must be bound or neither is.

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If a promise involves an action that the party was already legally obliged to tqake

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Bargain may be unenforceable under the legal duty rule

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Factors that could make a promise not given as part of a bargain enforceable

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Reliance
Past or moral consideration
Waiver
Form

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Bargain theory of consideration

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exchange of promises or promise for performance

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Categories of Promises

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1. Bargain promises
2.promises involving an accord and satisfaction
3. Promises to waive condidtions
4. Unrelied upon donative promises
5. Relied upon donative promises
6. Promises based on past or moral or consideration

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Bargain

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An exchange in which each party views his promises or performance as the price of the other's promise or performance

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Unconscionability

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So unfair as to shock the court's conscience

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Gross disparity

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Gross disparity between the value of what is done or to be done by each party may be used as evidence to support certain defenses.

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Equitable remedies

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Adequacy of consideration may be reviewed when a party sues at law for damages, adequacy of consdideration may be reviewed by teh courts wehn a party seeks an equitable remedy such as specific performance.

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Requirements of equity

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a showing of fairness and substantial equivalence in value

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What makes a promise enforceable?

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1. detrimental reliance
2. a promises made in a special legal form
3. pastor moral consideration conferring a material benefit on the promisor

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Bargains that are not consideration

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1. nominal consideration
2.promises to surrender or forbear from asserting a legal claim that is unreasonable.
3. apparent bargains invovling an illusory promise
4. Bargains in which party promises to do that which she is already legally obliged to do.

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Considerations regarding nominal consideration

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If the parties truly intended to make a bargain, a court will generally find that there is consideration, no matter how disproportional the two performances seem to be.

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legal duty rule

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t a promise to perform what is already a legal duty isn’t consideration

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estoppel

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Legal rule of evidence which prevents a party from making an allegation or denial that contradicts what has been previously stated or what has been legally established as the truth OR
supports a claim for damages of the party that had good faith reliance on a misleading representation of another party.

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guaranty

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a promise to answer for another party's debt or for her performance of a contractual obligation.

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When will nominal consideration make an option enforceable?

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1. if the option is in writing and proposes fair terms
2. if it is a written guaranty

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option

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a promise to hold an offer open for a fixed amount of time

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guaranty

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a promise to answer for another party's debt or for her performance of a contract

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How do options and guarantees differ from true donative promises?

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They are not promises to make a gift, rather they are promises designed to facilitate or further a proposed bargain.