Chapter 11Contracts Consideration Capacity And LegalityConsideration
Chapter 11……….Contracts, Consideration, Capacity and Legality
Consideration: Value given in return for a promise. Consideration must be (1) legally sufficient and (2) bargained for by the party receiving it.
Legally sufficient consideration may take the form of:
(1) promising to do something that the promisee has no prior legal duty to do (e.g., promising to pay money for the promisor’s goods); Regular consideration
(2) performing an action that the promisee is not otherwise obligated to undertake (e.g., painting the promisor’s house); also Regular Consideration, or
(3) refraining from exercising a legal right that the promisee is otherwise entitled to exercise (e.g., dismissing a viable lawsuit against the promisor). Forebearance.
Consideration is bargained for if promisor sought it in exchange for the promisor’s promise and the promisee gave it in exchange for the promisor’s promise.
Courts will generally not inquire into the adequacy of the consideration, as long as the promisor bargained for it.
We are looking for mutuality of risk…something for something…
INSUFFICIENT CONSIDERATION
Preexisting Duty: A promise to do (or refrain from doing) what one already has a legal duty to do (or refrain from doing) generally does not constitute legally sufficient consideration.
However, under the “unforeseen difficulties” doctrine, an existing contract may be modified to account for unforeseen difficulties that arise during the course of performance. In such a case, the promisee’s obligation under the modified contract is new consideration.
Likewise, if the parties agree to replace an existing contract with a new, superseding contract, the promise to perform the new contract is a new promise; and, thus, not a promise to perform a pre-existing legal duty.
Past Consideration: Promises made in return for acts or events that have already taken place are unenforceable for lack of sufficient consideration.
Illusory Promise: If the terms of a
Consideration: Value given in return for a promise. Consideration must be (1) legally sufficient and (2) bargained for by the party receiving it.
Legally sufficient consideration may take the form of:
(1) promising to do something that the promisee has no prior legal duty to do (e.g., promising to pay money for the promisor’s goods); Regular consideration
(2) performing an action that the promisee is not otherwise obligated to undertake (e.g., painting the promisor’s house); also Regular Consideration, or
(3) refraining from exercising a legal right that the promisee is otherwise entitled to exercise (e.g., dismissing a viable lawsuit against the promisor). Forebearance.
Consideration is bargained for if promisor sought it in exchange for the promisor’s promise and the promisee gave it in exchange for the promisor’s promise.
Courts will generally not inquire into the adequacy of the consideration, as long as the promisor bargained for it.
We are looking for mutuality of risk…something for something…
INSUFFICIENT CONSIDERATION
Preexisting Duty: A promise to do (or refrain from doing) what one already has a legal duty to do (or refrain from doing) generally does not constitute legally sufficient consideration.
However, under the “unforeseen difficulties” doctrine, an existing contract may be modified to account for unforeseen difficulties that arise during the course of performance. In such a case, the promisee’s obligation under the modified contract is new consideration.
Likewise, if the parties agree to replace an existing contract with a new, superseding contract, the promise to perform the new contract is a new promise; and, thus, not a promise to perform a pre-existing legal duty.
Past Consideration: Promises made in return for acts or events that have already taken place are unenforceable for lack of sufficient consideration.
Illusory Promise: If the terms of a