ACCT 324 1st Edition Lecture 5 Outline of Last Lecture I. Implied in Fact vs. Implied in LawII. Classifications of ContractsIII. Interpretation of ContractsIV. Begin Chapter 14 (Case Example to Begin the Chapter)Outline of Current Lecture I. Ending Chapter 14 II. Starting Chapter 15: ConsiderationIII. Examples of ConsiderationIV. Rules for ConsiderationCurrent LectureI. Ending Chapter 14Chapter 14 ends with the following case example:Mrs. Alexander vs. Crime Stoppers: Mrs. Alexander was attacked by a serial killer, she survived, identified him in a line up, then went to crime stoppers where she tried to claim the award money offered for the serial killer… But the Crime Stoppers date was up on the case, and they also required that the information be given directly to crime stoppers; since she gave the information directly to the police and the FBI she lost the caseII. Starting Chapter 15: Consideration Consideration – something of value given in exchange for something else of value, that is the product of a mutually bargained-for exchange*In business the exchange is usually assumed to be moneyThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.III. Examples of Consideration - Benefit to Promisee – Professor Johnson wants to quit teaching, but says he’ll stay until they find a replacement. That benefits the university.- Detriment to Promisor – Football player promises to eat right, lift weights, and not drag-race in his car, but since he promised not eat junk food and go drag racing that was a detriment tothe promisor- Promise to do something – Boyfriend promises to take out the trash every night- Promise to refrain from doing something – Promise not to drink the night before an exam**In court they rarely look at the value of the consideration. Which means if you enter into a bad deal you cannot go to court and say you want out of the deal because you didn’t get what is fair.IV. Rules for Consideration- Rules for Consideration- For a promise to be legally enforced, there must be consideration- Exception – Promissory Estoppel:- One party makes promise knowing other party will rely on it- Other party relies on promise (‘actual reliance’)- Justice dictates enforcement of promise, even though it is not supported by consideration- Court rarely considers adequacy of consideration- Illusory promise does not constitute consideration- Past consideration does not constitute consideration for purposes of present contract- Promise to do something you are already legally obligated to do is not valid consideration (“Pre-existing duty rule”)Promissory Estoppel – Get a job in California, move out there, show up to work on start date, and then company does not have that position anymore and you’re out a job, so you’re going to sue on this rule ofpromissory estoppelIllusory Promise Example – Zack offers to sell his jeep, buyer says I’ll come by tomorrow and look at it maybe if I like it I’ll get it … Not promise has been made, cannot hold person to anything that they saidPast Consideration is NO consideration – Blackman vs. Iverson – Blackman said your nickname should be “The Answer” and Iverson said I really like so ill use it and give you 20% of endorsements and money he gets … so he goes off, gets famous, and Mr. Iverson does not pay Blackman, Blackman takes Iverson to court, Court says no Blackman you will not get paid because Pre-existing duty rule – if a police officer catches the criminal and then tries to collect reward they cant do that because they had a pre-existing duty to catch that