Business Law CH 12 - Consideration
Legal detriment
(1) Doing an act that one is not legally obligated to do or (2) refraining from doing an act that one has a legal right to do
Promise to pay debt barred by the statute of limitations
A new promise by the debtor to pay the debt renews the running of tje statute of limitations for a second statutory period
Voidable promises
A new promise to perform a voidable obligation that has not beem previously avoided is enforceable
Moral obligation
A promise made to satisfy a preexisting moral obligation is generally unenforceable for lack of consideration
Requirement contract
Agreement to buy all of one's needs
Output contract
Agreement to sell all of one's production
Legal sufficiency
Benefit to the promisor or detriment to the promisee
Promissory estoppel
Doctirne that prohibits a party from denying his promise when the promisee takes action or forbearance to his detriment reasonaly based upon the promise
Consideration
Inducement to make a promise enforceable
Promise to pay debt discharged in bankruptcy
May be enforceable without consideration
Bargained-for exchange
Mutually agreed-upon exchange
Adequacy of consideration
Not required where parties have freely agreed to the exchange
Undisputed debt
Obligation whose existence and amount are not contested
Disputed debt
Obligation whose existence or amount is contested
Conditional promise
Obligations contingent upon a stated event
Legal benefit
Obtaining something to which one had no legal right
Substituted contract
Parties rescind ther original contract and enter into a new one
Settlement of a disputed debt
Payment of a lesser sum of money to discharge a disputed debt is legally sufficient consideration
Settlement of an undisputed debt
Payment of a lesser sum of money to discharge an undisputed debt does not constitute a legally sufficient consideration
Settlement of an undisputed debt
Payment of a lesser sum of money to discharge an undisputed dept does not constitute legally sufficient consideration
Preexisitng contractual duty
Performance of a preexisitng contractual duty is not consideration
Preexisting public obligations
Performance of public duties such as those imposed by tort or criminal law is neither a legal detriment nor a legal benefit
Promisor
Person making promise
Promisee
Person receicing a promise
Illusionary promise
Promise imposing no obligation on the promisor
Gratutious promise
Promise made without consideration
Exclusive dealing
Sole right to sell goods in a defined market
Statute of limitations
Time period within which a lawsuit must be initiated
Past consideration
Unbargained-for past events
Modification of preexisting contract
Under the common law, a modification of a preexisting contract must be supported by mutual consideration; under the Uniform Commercial Code a contract can be modified without new consideration
Contracts under seal
Where still recongnized, the seal acts as a substitute for consideration