BLAW FINAL - Chapter 12

Something of legally sufficient value may consist of:

1. *A promise to do something that you otherwise have no prior legal duty to do (ex. to pay a supplier upon receiving goods)* 2. *Performance of an action that you are otherwise not obligated to undertake (ex. provide accounting services)* 3. *Forebearance - refraining from an action that you have a legal right to undertake (ex. not purchasing goods from another supplier [exclusivity])*

Consideration can be broken down into what 2 parts?

1. Something of *legally sufficient value* must be given in exchange for the promise 2. There must be a *bargained-for exchange*

Preexisting Duty

A promise to do what one already has a legal duty to do does not constitute legally sufficient consideration. (just because you agreed to build one building doesn't mean you will do the one next to it)

Rescission

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made. can be done up until full completion.

Illusory Promise

A statement that is uncertain and vague, that isn't considered a definite promise. A statement that looks like a promise but is actually only an illusion of a promise due to its conditional nature or its otherwise lack of a firm commitment.

The basis for a bargain struck between or among the contracting parties

Bargained for Exchange

T/F A consumer's signature on a contract always guarantees that the contract will be enforced

F

Is there bargained for exchanged if a father says, "in consideration that you are not as wealthy as your brothers, I will give you $5,000."

No because the son doesn't need to give his father something of legal value in return for his father's promise

When voluntary consent may be lacking:

Preexisting Duty Rescission Past Consideration Illusory Promises

When you ask someone to paint your garage, what is the consideration?

The act of painting the garage is the consideration that creates a contractual obligation to pay for it

bargain for exchange

There must be an exchange of value, separates a contract from a gift.

Past Consideration

promises made in return for actions or events that have already taken place are unenforceable. (ex. bargained for exchange is missng) (Ex. companies that attempt to impose a non compete)

Adequacy of Consideration

refers to fairness of the amount of consideration for what is received in exchange (more in notes)