Business Law Chapter 13: Consideration

Unliquidated debt

amount of debt in not settled, fixed, agreed on, ascertained, determined and reasonable persons may differ over the amount owed

Illusionary promise

terms to contract express such uncertainty of performance that the promisor has not definitely promised to do anything

Liquidated debt

the amount has been ascertained, fixed, agreed on, settled, or exactly determined

Rescission

the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made

Estopped

Prevented

Doctrine of Promissory Estoppel

a person who has reasonably and substantially relied on the promise of another may be able to obtain some measure of recovery

Binding release

1) Agreement made in good faith 2) Release contract is in a signed writing 3) Contract accompanied by consideration

Requirements to a state claim

1) Clear and definite promise 2) Promisor should have expected that the promisee would rely on the promise 3) Promisee would have reaonably relied in the promise by acting or refraining from some act 4) Promisee reliance was definite and resulted in substantial detriment 5) Enforcement of the promise is necessary to avoid injustice

Agreements that lack consideration

1) Preexisting Duty 2) Unforseen difficulties 3) Rescission and new contract 4) Past consideration

Legally Sufficient Value for consideration

1) Promise to do something that no one has no prior legal duty to do 2) The peformance of an action that one is otherwise not obligated to undertake 3) The refraining from an action that one has a legal right to undertake (FORBEARANCE)

Promises enforced despite lack of consideration

1) Promises that induce detrimental reliance, under the doctrine of promissory estoppel 2) Promises to pay debts that are barred by a statue of limitations 3) Promises to make charitable contributions

Past consideration

bargain for something to take place now or in the future but not for something that has already taken place

Release

contract in which one party forfeits the right to pursue a legal claim against the other party

Accord and Satisfaction

debtor offers pay and the creditor accepts a lesser amount than the creditor originally claimed was owed

Bargained-for Exchange

distinguishes contracts from gifts

Covenant not to sue

parties simply substitute a contractual obligation for some other type of legal action based on a valid claim

option to cancel clauses

present problems in regard to consideration. illusionary when this is avail before performance