Chapter 12 Consideration I Elements of Consideration a Consideration or a promise b Legal Value a legal value bargained for and given in exchange for an act i A promise can not be enforced unless the person who is getting the promise has given something up of value i Can be unilateral or bilateral contract ii Adequacy of Consideration promise satrisfies the legal value test the courts do not ask whether that act or promise was worth what the promisor gave or promised to give for return of it as long as the promisee s act or 1 Laissez faire mentality 2 it is their responsiblilty to makle a good promise a if they get screwed by a bad promise it is their own fault II Bargained for Exchange a III Exchanges that Fail to Meet Consideration Requirements Illusory Promises not really a promise just illudes to a promise a b Effect of Cancelation or Termination Clause i Just because they have the right does not mean that they are allowed to c Effect of Output and Requirements Contracts i One party agrees to supply all products to a supplier ii One party can only buy goods from a distributor iii Only enforceable under UCC d Effect of Exclusinve Dealings Contracts i Gives merchants exclusinve rights to sell product in a certain IV Preexisting Duties geographic area a Performing or agreeing to perform a preexisting duty is not consideration b Preexiting Public Duties i People have a duty to follow the law ii Cannot extort money from someone in exchange for hurting injuring them because that would be breaking the law c Preexisitng Contractural Duties and Modifications of Contracts under the Common Law i If you sign a contract then you do not have to pay more regardless of what the person says 1 Builder agrees to build for x and then asks for more you d Preexiting Duty and Agreement to settle Debt do not have to pay him more i Liquadated Debt no faith in dispute in how much it is worth a debt that is both due and certain parties have ii Unliquadaded Debt the amount of a debt a good faith dispute and either the existence ir 1 Accord and Satisfaction 2 Composition Agreements settlement of an unliquadated debt agreemetns between a debtor and 2 creditors who agree to accept as full payment a stated percentage of their liquidated claims against the debtor after the date which debts are due from pursuing legal action against a promisor can be valid consideration to support a return promise usually to pay a sum of money by a promisor an agreement by a promise to refrain 3 Forberance to Sue VI Promisory Estoppel V Past Considerttion not a consideration at all It is an act or other benefit given in the past that was not given in exchange for the promise in question a promise that the promisor should reasonably expect to induce reliance on the promise by the promissee and injustice to the promissee as a result of that reliance
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