Prepare: Worksheet 13.1: What is Consideration?

Value includes _____________, _____________ and ________________

1) A promise to provide consideration in the future (promise to act or forbear); 2) Act (any action that a party was not legally required to take in the first place); 3) Forbearance (refraining from doing something that one has a legal right to do

_________________ is the inducement, price or ______________ that causes a person to enter into ____________ and forms the basis for the parties' exchange. If one side gets all the ____________ of the exchange, then the agreement is not an ______________ contract.

Consideration; promise; contract; benefit; enforceable

Consideration is a requirement for contracts to be enforceable, unless the parties agree otherwise in writing. T or F?

False

Pursuant to the "peppercorn rule", courts will refuse to enforce contracts that are economically unfair if the parties did not have equal bargaining power. T or F?

False

Which of the following are examples of a deal supported by consideration? 1) Martha promises to wash her sisters laundry the next time she washes her own 2) Carol lends her blender to her neighbor 3) Alexa donates her used books to the library and checks out a new book while she is there 4) Freya buys a gift certificate to a spa

Freya buys a gift certificate to a spa

The court in Hamer v. Sidway found for the which of the following?

In Hamer v. Sidway, the nephew refrained from "drinking liquor, using tobacco, swearing, and playing cards or billiards for money until his twenty-first birthday," because, on his 15th birthday, his uncle promised him he would pay him $5,000 if he did. The court found, that the nephew's promise to forbear from drinking, smoke, and gambling (all of which he was legally entitled to), qualified as consideration and that the nephew and the uncle had a contract.

In Hamer v. Sidway, if the court had agreed with the uncle that his promise was not supported by consideration, what would be legal consequence?

The nephew and the uncle would not have an enforceable contract.

A promise to act or forbear in the future counts as consideration. T or F?

True

Consideration includes _________ and _____________.

Value (legal benefit to the promisor or legal detriment to the promisee; something of measurable value. Ex money groceries, insurance, a promise not to sue) and Bargained-for Exchange (involves reciprocity; parties must have bargained for whatever was exchanged to strike a deal)

Which of the following are the two basic elements of consideration?

Value and Bargained-for exchange

Chandly forbears if he

agrees NOT to do something he had a legal right to do. A forbearance is, in essence, the opposite of an act. If a party promises NOT to do something illegal, it is NOT forbearance.

Consideration requires a legal benefit to the ______________ or a legal ___________ to the ____________. Legal benefit means receiving something ______________.

promisor; detriment' promisee; of measurable value

Camila commits an act that can be valid consideration when she does something _____________.

she was NOT legally required to do in the first place. For example, she might do a job, deliver an item, or pay money, for example. An act does not count if the party was simply complying with the law or fulfilling her obligations under an existing contract.

Something is bargained for if it is ___________.

sought by the promisor and given by the promisee in exchange for their respective promises

The case involving Tuppela and Embola demonstrates how courts

will enforce a contract that is supported by consoderation, regardless of the economic fairness of the contract's terms