Business Law Chapter 8

Unliquidated claim.

Debt, amount of which is subject to an honest dispute.

For the consideration to be valid, the offeror's promise __________ the offeree to act.

Induce

Promisee

Person to whom a promise is made

Gift

Voluntary transfer of property without consideration.

Moral Obligation

A duty which one owes , and which he will perform. The obligation to be chargeable, which can never be enforced by law

Preexisting obligation

A legal concept relating to when the performance of a legal duty is classified as consideration.

The board of directors of Hill Haven, a home for the elderly, was accepting donations to build an additional dormitory at the home. Hogan promised in writing to donate $3,000 for the proposed addition. Relying on this and other pledges, the directors contracts for the construction of the dormitory. Is Hogan bound by the promise to donate $3,000?

A promise to make a gift a charitable, religious, educational, or scientific organization or to some other institute that depends on voluntary contributions is usually enforceable without consideration under modern court view. It would be unfair for Hogan to the Board of Hill Haven, the home for elderly to withdraw a pledge.Hogan promised in writing to donate $3,000 for the proposed addition and to this Hogan is bound by the promise to donate $3,000.

Legal detriment

Consideration that is a sacrifice by the offeree.

Discuss the differences amount adequate consideration, moral consideration, and past consideration.

Adequate consideration refers to a price that is the same value for an act or something in which it is given. A moral consideration is a past act or promise in which forms certain things for the future, to be given for moral or past consideration. Past Consideration is an act done before a contract is made. Something that has already been given or be already acted.

Composition of creditors

Agreement among creditors to accept a percentage of total owed by debtor in full settlement of debt.

Explain why the presence of consideration in an agreement is essential.

An agreement may not ripen into a contract without the presence of consideration. If no consideration is present, the contract may not be enforceable even if it contains a clause stating that is should be enforceable. Consideration is something of legal value that each value gives to the contract to bind the agreement.

Realize that past consideration is no consideration at all.

Consideration is something of value given by the offeror at the time of the promise made by the offeror, past consideration is therefore legally no consideration at all in most states. For consideration to be valid, the offeror's promise must induce the offeree to act.

Unconscionable

Contract so unfair or one-sided that it will not be enforced

Liquidated claim

Debt,amount of which is not in dispute.

Nominal consideration

Dollar or other small sum of money used to bind a contract

Promissory estoppel

Equitable doctrine applied by the courts to enforce a promise unsupported by consideration.

Discover that moral consideration is not more enforceable than any other promise not supported by consideration.

In most states, courts adhere strictly to the requirements of consideration considering moral obligations and would say that a moral promise is no more enforceable than any other promise unsupported by consideration.A court would conclude that the offeror intends to make a gift.

Indicate when courts when will question the adequacy of consideration.

In the past courts have not questioned whether the consideration received by each party was sufficient or fair in light of the consideration the other parties gave. Courts do not care as long as the promises suffers some detriment, no matter how small.

Dial owed Lake $300. On the due date, Dial asked for an extension of two months and Lake agreed. One week later, Lake sued for the full $300. What are Dial's rights?

Lake gave no consideration for Dial's promise to extend the time of payment by two months, Lake's promise is not legally enforceable.

A sacrifice made by the offeree is also known as ___________

Legal detriment..

Statute of limitations

Legally preventing a creditor from collecting a debt after a certain period of time, depending on the state

Determine the need for consideration in special contexts.

Many problems involving consideration arise during the performance of a contract. Courts often deal with these problems on an individual basis. One common problem involves the preexisting legal obligation.

Moral Promise

More enforceable than any other promise unsupported by consideration.

Does consideration need to be monetary?

No it can be forfeited by the offeree

Does consideration have to be for equal value?

No it doesn't they just have to exchange something of value.

Identify circumstances under which a court will enforce an agreement despite the absence of consideration.

On situations in which consideration was required for promises to be enforced. There are exceptional situation, however, in which promises can be enforced without consideration. Courts base their decisions to enforce such promises on principles of equity.

Promisor

One who makes a promise

Past consideration

Promise made for an act that has already taken place

Pledge

Promise to make a gift to charitable, religious, educational, or scientific institution; bailment created when personal property is deposited as security for repayment of a debt.

Forbearance

Refraining from doing something one has a legal right to do.

Consideration

Something of value given by each party to bind an agreement

Discuss what form consideration can take.

The consideration may consist of a sacrifice by the offeree. This sacrifice is called legal detriment. Legal detriment is consideration when the offeree, at the request of the offeror: Doing something he or she is not legally bound to do. Refrains or promises to refrain from doing something she or he has a legal right to do.

A promise to make a gift is ____________

Unenforceable

Visca, while visiting a friend's house, was injured when some heave ceilings tiles in the bathroom came loose, fell, and hit her squarely on the head She suffered a slight concussion. Her friend gave her money to see a doctor and to pay for the prescriptions ordered by the doctor. In turn, Visca agreed orally not to sue her friend for the injury she received. Several weeks later, because Visca complained of severe headaches and had to make several more visits to a doctor and continue with mediation, she decided to sue her friend for additional expenses and pain and suffering. Can Visca recover the additional money?

Visca can recover the additional money.The issue being the past consideration. Rule is past consideration is considered no consideration. She provided money for doctors as consideration. Her friend agreed not to sue for her consideration. Visca complained of several headaches and had to make several more visits to a doctor and continue with mediation. As a follow up she decided to sue her friend for additional expenses and pain and suffering. The legal rule would be past consideration because the act was being done. In the scenario, Visca cannot recover the additional money by the incident occurring and all the symptoms leading up to everything.

While Holt was out of town, Wills took care of Holt's garden. When Holt returned, she promised to pay Wills $75. Is Holt's promise enforceable?

Will's performance gives no consideration for Holt promise to pay money. He cannot gain privately from this obligation. Past Consideration.