Disclaimer: This is a test on how the author will take study notes in the future and testing the lay-out of the website. Please do not use the below information or on this website for any subject matters or for use of examinations. Furthermore, the author is not rendered any service in accounting, taxation or similar professional services.
Contracts: Consideration
I. Overview
When the promise is not supported by consideration.
Mutuality of obligation.
Legal sufficiency (also known as legal value) and bargained-for-exchange.
If the promisor receives a legal benefit or the promise incurs a legal detriment.
The promisee must do or promise to do something that he or she is not legally obligated to do or not do or promise not to do something he or she is legally entitled to do.
The promise made by one party and the detriment incurred by the other.
When a promise suffers a legal detriment from the promisee, the promisor gains a directly related legal benefit.
The Restatement (Second) of Contracts.
- An act other than a promise.
- A forbearance to act.
- Formation, modification, or destruction of a legal relation.
- A return promise.
An illusory promise.
Note: Not constitute a consideration.
Past consideration.
Note: It is not a valid form of consideration.
When the federal statutory requirements are met.
A promise of an adult to pay a debt incurred when he or she was a minor.
If it is written.
Note: A written promise is not needed if partial payment has been made.
The pre-existing duty rule.
The part payment.
- Illusory promise.
- Nominal consideration.
- Past consideration.
- Moral consideration.
- Pre-existing legal duty.
- Part-payment of undisputed debt.
On the basis of a legal substitute for consideration.
- Promissory estoppel.
- Quasi-contract.
- Modification of contract for the sale of goods.
- Firm offer in the sale of goods.
- Promise to pay legal obligation barred by law.
- Public policy.
Promissory estoppel.
- A promise that the promisor should reasonably expect to induce action or forbearance by the promisee.
- The action of forbearance by the promisee is induced by the promise.
- Enforcement of the promise is the only means of avoiding injustice.
A quasi-contract.
- Impose obligations on a person to prevent unjust enrichment.
- The parties to a quasi-contract make no promise and reach no agreement.
- One of the parties is substantially benefited at the expense of the other.