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11 Cards in this Set
- Front
- Back
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Consideration |
The inducement to enter into a contract; If no consideration, promise is not legally enforceable under contract law |
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2 Elements for Consideration |
1. Legal sufficiency 2. Bargained-for exchange |
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Legal Sufficiency |
A legal benefit to promisor or a legal detriment by promissee |
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Bargained-for Exchange |
An act done in the past (past consideration) is not consideration for a present promise |
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4 Situations where lack of Consideration makes Promise UNENFORCEABLE |
1. Gratuitous Promises (Gift) 2. Past Consideration 3. Promissee has a prior legal duty (under statute) to perform promise 4. Contract Modification (under contract) |
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Gratuitous Promise |
A promise to make a gift; No enforceable rights because no consideration |
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Past Consideration |
An act done before the contract is made is not consideration |
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Promissee has a prior legal duty (under statute) to perform its promise |
Ex: Joe will pay policeman $500 to catch guy who stole his TV. The policeman cannot accept this because there is no consideration. Policeman has a prior duty to catch criminals. (His job) |
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Contract Modification (Common Law) |
A contract modification must be supported by mutual consideration; i.e. both parties must be doing something new.
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Contract Modification (UCC) |
a contract modification can be modified without new consideration; i.e. both parties must be acting in GOOD FAITH |
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Promissory Estoppel (Consideration) |
Under modern contract law, the consideration requirement does not need to be satisfied if promissory estoppel applies |
