BLAW Ch 15

consideration

(required in every contract) what the person will receive in return for performing a contract obligation - can be anything as long as it is the product of a bargained for exchange 1. benefit to the promisee 2. detriment to the promiser 3. promise to do something 4. promise to refrain from doing something

"rule 4" past consideration

-not consideration at all -must be bargaining in exchange for a contract to be enforceable -the promise cannot be based on consideration provided before the promise was made ~exception: enforceable "to the extent necessary to avoid injustice"

UCC Section 3-311

1. business organizations may notify debtors to send offers to settle that are less than the claim to a different address 2. if a business does inadvertently cash a "paid-in-full" check, it has 90 days to offer the debtor repayment in the same amount this DID create an accord and satisfaction effective in 30 states

when you get a "paid in full" check

1. cash it and accept the payment 2. do not cash it and sue

accord and satisfaction must meet

1. debt is unliquidated 2. creditor agrees to accept as full payment less than it claims is owed 3. debtor pays the amount they have agreed on - accord: the new agreement - satisfaction: debtor's payment - in 30 states if this is written and its cashed it creates and A and S... a common law rule

"rule 5" preexisting duty

1. performance of a duty you are obligated to do under the law is not good consideration 2. performance of an existing contractual duty is not good consideration (already obligated to do under a contract)

exceptions to preexisting duty

1. unforeseen circumstances: causes a party to make a promise regarding an unfinished project, that promise is considered an unfinished project, that promise is considered valid 2. additional work: if a party in a contract agrees to more work, the promise to do it is valid consideration 3. UCC article 2 (sale of gods) - does not require any other or additional consideration to a minor contract modification

contract under seal

10 states still allow a contract under without consideration to be enforced if it is under seal

"rule 2" adequacy of consideration

a "bad deal" or judgement will not be set aside, that is your responsibility to do the research ~exceptions: fraud

conditional payment

any form of payment sent to the creditor that is for less than the full balance and marked "paid in full"

promissory estoppel

exception to consideration, a way you can try to collect money even if it is not due to you. occurs when these three conditions are met. 1. one party makes a promise and either knows or should know that the other party will reasonably rely on it 2. the other part does reasonably rely on it 3. the only way to avoid injustice is to enforce the promise * not awarded regularly, but provides a remedy where none other exist

liquidated debt

no dispute that money is owed or how much - creditor's promise to accept payment less than owed, when the debtor is already obligated to pay the full amount is not binding ~ exception: when the debtor offers different performance

"rule 3" illusory promise

not a promise at all, not consideration "i'll look in the morning and if i like it i will pay you"

lack of consideration

one party's promise is enforceable only if the other party promised something in exchange

unliquidated debt

parties either disagree about whether money is owed or dispute the amount - can settle for less than full amount if they enter into an accord and satisfaction

unconciounability

people engaged into a contractual promise that shouldn't be allowed in society