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28 Cards in this Set

  • Front
  • Back
consideration
inducement to make a promise enforceable; must have legal sufficiency and bargained-for exchange
legal sufficiency
consists of either a legal benefit to the promisor or a legal detriment to the promisee
legal detriment
doing of that which the promisee was under no prior legal obligation to do or the refraining from the doing of that which he was previously under no legal obligation to refrain from doing
legal benefit
obtaining by the promisor of that which he had no prior legal right to obtain
adequacy of consideration
law will regard the consideration as adequate if the parties have freely agreed to the exhange
unilateral vs. bilateral consideration
unilateral contracts must have consideration for the promise made; in bilateral contracts each promise is consideration for the other (known as mutuality of obligation)
illusory promise
statement that is in the form of a promise but imposes no obligation upon the maker of the statement. these are not consideration for a return promise (usually have words like 'desire' 'want' or 'wish to buy')
output contract
agreement of a seller to sell her entire production to a particular purchaser (not illusory contract)
requirements contract
purchaser's agreement to purchase from a particular seller all the materials of a particular kind that the purchaser needs (not illusory contract)
exclusive dealing contract
agreement in which manufacturer of goods grants to a distributor an exclusive right to sell its products in a designated market (not illusory)
conditional contract
contract in which performance depends upon the happening or nonhappening of an event not certain to occur (conditional promises are sufficient consideration unless promisor knows that condition cannot occur)
preexisting public obligations
public duties such as those imposed by tort or criminal law are neither a legal detriment nor a legal benefit
preexisting contractual obligation
duty ithe terms of which are neither doubtful nor the subject of honest dispute; performance of these is not legally sufficient consideration
modification of a preexisting contract (common law)
a modification of a preexisting contract must be supported by mutual consideration (i.e. both parties)
modification of a preexisting contract (the Code)
contracts can be modified without new consideration
substituted contract
results when parties to a contract mutually agree to rescind their original contract and enter a new one (rescission and new contract both have consideration)
settlement of an undisputed debt
payment of a lesser sum of money to discharge an undisputed debt does not constitute legally sufficient consideration
settlement of a disputed debt
payment of a lesser sum of money to discharge a disputed debt is legally sufficient consideration
bargained-for exchange
parties have each given ot the other something in a mutually agreed-upon exchange for his promise or performance
past consideration
an act done before contract is made. this is not legally sufficient consideration
contracts enforceable without consideration (4)
1. promises to perform prior unenforceable obligations, 2. promissory estoppel, 3. contracts under seal, 4. promises made enforceable by statute
promise to pay debt barred by the statute of limitations
a new promise by the debtor to pay the debt renews the running of the statute of limitations for a second statutory period
promise to pay debt discharged by bankruptcy
may be enforceable without consideration
voidable promises
a new promise to perform a voidable obligation that has not previously been avoided is enforceable without new consideration
moral obligation
a promise made to satisfy a preexisting moral obligation is generally unenforceable for lack of consideration (Restatement will recognize moral obligations as consideration in order to prevent injustice)
promissory estoppel
doctrine that makes promise enforceable when the promisee takes action or forbearance to his detriment reasonably based on the promise
contracts under seal
a seal acts as consideration, but most states have abolished this by statute which makes the seal not consideration (same for Code)
promises made enforceable by statute
contract modifications (under the Code) don't need new consideration, written, signed, and delivered renunciations discharge a contract without consideration, and firm offers may not be revoked for lack of consideration