Consideration (Business Law)

1.Legal Sufficiency 2. Bargain for exchange

2 basic elements of consideration are?

public duty

A ___________ such as those imposed by tort or criminal law is neither a legal detriment nor a legal benefit and does not arise out of contract.

promise to perform a voidable obligation

A new __________ that has not been previously avoided is enforceable, i.e., a promise to pay an antecedent debt by a minor who has attained the age of majority

enforceable by various statutes

Certain gratuitous promises are made __________ particularly the UCC.

Consideration

It is one element that separates contractual promises from non- contractual promises

3 years

The general statute of limitations in Mississippi is

pre-existing legal duty

The law does not regard the performance of, or the promise to perform, of a____________, public or private, as either a legal detriment or a legal benefit.

pre-existing contractual duty

The performance of ___________ or obligation is not consideration. The doing of what one is already legally bound to do is neither a detriment to the promisor nor a benefit to the promisee.

mutuality of obligation

The relationship under a bilateral contract is referred to as a

promissory estoppel

This doctrine prohibits a party from denying his or her promise when the promisee takes action or forbearance to his detriment reasonably based upon the promise.

modification of a pre-existing contract

Under common law a___________must be supported by mutual consideration to be enforceable. Under the UCC, a contract can be modified without new consideration, however, the modification is subject to good faith.

pe-existing moral obiligation

Under common law, a promise made to satisfy a _________ is generally unenforceable for lack of consideration.

Consideration

exchanged for a promise may be an act, a forbearance to act, or a promise to do either of these.

exclusive dealing contract

grants an exclusive right to a distributor, franchisee or licensee by a manufacturer of the sole right to sell goods in a defined market.

Illusory Promises

impose no obligation whatsoever on the promisor. His or her performance is entirely optional. It is a statement that is in the form of a promise but imposes no obligation upon the maker of the statement, and it is not consideration for a return promise.

a promise to pay a debt barred by the statute of limitations

is a new promise by the debtor to pay the debt renews the running of the statute for a second statutory period. Every state has statutes of limitation which provide that legal actions must be initiated within a prescribed period of time after the claim arose.

conditional promise

is a promise, the performance of which depends upon the happening or non-happening of a stated event or condition.

requirements contract

is a purchaser's agreement to buy from a particular seller all of the materials of a particular kind that he or she needs.

output contract

is a seller's agreement to sell all of his or her production to a single buyer. It provides a seller with an assured market for their product.

unliquidated debt

is an obligation disputed as to either its existence or its amount. The settlement or discharge of an unliquidated or disputed debt by payment of a lesser sum of money is legally sufficient consideration.

liquidated debt

is an obligation, the existence or amount of which is not disputed. Settlement or discharge of a liquidated or undisputed debt by payment of a lesser sum of money does not constitute legally sufficient consideration

Consideration

is defined as the inducement to enter into a contract

Past consideration

is not consideration. Consideration to support a promise may be given to a person other than the promisor (third- party) if the promisor bargains for that exchange.

Legal Benefit

is obtaining by the promisor something to which he or she had no prior legal right to obtain

Legal detriment

is the doing of an act the promisee is not legally obligated to do or not doing an act that the promisee has a legal right to do.

Consideration

is the primary basis for enforcing promises in our legal system.

unilateral contract

is where a promise is exchanged for a completed act or a forbearance to act.

bilateral contract

is where the parties exchange promises, making each party a promisor and promisee.

Legal Sufficiency

means that the consideration exchanged must consist of either a legal benefit to the promisor or a legal detriment to the promisee.

firm offers

offers signed by a merchant to keep open an offer to buy or sell for a stated period of time, not to exceed 3 months, or if no time is stated, for a reasonable time.

substituted contract

results when the parties mutually agree to rescind their original contract and to enter into a new one. This situation involves separate contracts - the original contract, the agreement of rescission, and the new contract. Each of these separate agreements is supported by consideration.

written renunciations

waivers by the aggrieved party