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