Chapter 13 - Consideration
Adequacy of consideration
relates to how much consideration is given and whether a fair bargain was reached; courts only consider this when fraud, undue influence, duress, or the lack of a bargained-for exchange may be involved
Covenant not to sue
the parties substitute a contractual obligation for some other type of legal action based on a valid claim
Forbearance
the refraining from an action that one has a legal right to undertake
Rescission
the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made
Normally, courts evaluate the adequacy or fairness of consideration even if the consideration is legally sufficient.
False
Only a liquidated debt can serve as consideration for an accord and satisfaction
False
Past consideration is consideration.
False
Consideration is the value given in return for a promise
True
Promissory estoppel may prevent a party from asserting a lack of consideration as a defense
True
Rescission is the unmaking of a contract so as to return the parties to the positions they occupied before the contract was made
True
Release
a contract in which one party forfeits the right to pursue a legal claim against the other party
Accord and satisfaction
a debtor offers to pay a lesser amount than the creditor purports to be owed
Promissory estoppel (detrimental reliance)
a person who has reasonably and substantially relied on the promise of another may be able to obtain some measure of recovery; a court may enforce an unenforceable promise to avoid the injustice that would otherwise result
Past consideration
a promise made in return for actions or events that have already taken place; unenforceable
List the 2 elements of consideration
1. Legal value 2. Bargained-for-exchange
List the 3 situations of agreements that lack consideration
1. Preexisting duty 2. Past consideration 3. Illusory promises
List the 3 exceptions to the consideration requirement
1. Promises that induce detrimental reliance, under the doctrine of promissory estoppel 2. Promises to pay debts that are barred by a statute of limitations 3. Promises to make charitable contributions
List the 3 factors when releases will generally be binding:
1. given in good faith 2. stated in a signed writing 3. accompanied by consideration
A covenant not to sue always bars further recovery
False
A promise has no legal value as consideration
False
A covenant not to sue is an agreement to substitute a contractual obligation for some other type of action
True
A promise to do what one already has a legal duty to do is not legally sufficient consideration under most circumstances
True
Liquidated debt
one whose amount has been ascertained, fixed, agreed on, settled, or exactly determined; accord and satisfaction cannot take place