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18 Cards in this Set
- Front
- Back
Consideration |
Consideration requires that there must be bargaining that leads to an exchanging between parties. "Bargaining" indicates that each side is obligating itself in some way to induce the other side to agree. |
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Promisor |
The person making a promise. |
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Promisee |
The person to whom the promise is made. |
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Adequacy of Consideration |
Courts seldom inquire into the adequacy of consideration. This is often referred to as the "peppercorn rule" as long as a tiny, measurable amount of consideration is present, the consideration is considered valid.
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Illusory Promise |
A promise that is not enforceable because it lacks a clear consideration. Statements such as "I'll give you $100 dollars if I feel like it" is an example of an illusory promise. |
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Requirements contract |
In a requirements contract, the buyer agrees to purchase 100% of her goods from one seller. |
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Output contract
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In an output contract, the seller guarantees to sell 100% of its output to one buyer, and the buyer agrees to accept the entire quantity. |
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Past considerations |
Past considerations is generally no consideration. Consideration requires the bargaining exchange between two parties, if one makes a promise based on something someone else has already done, there was really no consideration at all. |
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Preexisting Duty |
A preexisting duty, or a promise to do something the promisor is already obligated to do, is not consideration. |
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Additional Work |
An exception to the preexisting duty rule. If the promisor agrees to do something above and beyond what he is obligated to do, then there is consideration. |
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Rescinding a contract |
To cancel a contract |
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Unforeseen Circumstances |
Unforeseen Circumstances are an exception to the Preexisting Duty rule. |
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Liquidated Debt |
A debt which there is no dispute about the amount owed |
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Unliquidated debt |
A debt that is disputed because the parties disagree over its existence or amount. |
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Accord and Satisfaction |
A completed agreement to settle a debt for less than the sum claimed. |
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"Full Payment" Notations |
In most states payment by a check that has a "full payment" notation will create an accord and satisfaction unless the creditor is an organization that has notified the debtor that full payment offers must go to a certain officer. |
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UCC exceptions to Accord and Satisfaction |
If an organization notifies a debtor that any offer to settle for less than the debt claimed must be made to a particular official, and the check is sent to anyone else in the organization, depositing the check generally does not create an accord and satisfaction. |
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UCC exceptions to Accord and Satisfaction - 90 days rule |
If within 90 days of cashing a "full payment" check, the creditor offers repayment of the same amount to the debtor, there is no accord and satisfaction. |