Elements of consideration
The adequacy of consideration is the
"fairness" of the bargain, although courts do not generally contemplate this if the consideration is legally sufficient.
What are types of cases for settlement of claims?
1. accord and astisfaciton 2. release 3. covenant not to sue
What are special circumstances that contracts lack consideration?
1. pre-existing duty 2. past consdierations 3. illusory promises
What are forbaearance consideration?
1. promise of soemthing you don't have to do 2. a performace of soemthing tat you don't have to do
what are the two elements of considerations that are needed?
1. something of legally sufficient value 2. given in a bargianign-for-exchange (give-take) between the aprties
What are exceptions to pre-exisitng duty contracts?
1. unforeseen difficutlites 2. rescission
What is a convenant not to sue settlement claim?
Agreement to substitute some other type of legal action based on a valid claim with a contractual obligation.
What is the consideration forbearance case?
Hamer v. Sidway
What is are unforseen diffficulties for pre-existing duty contracts?
If a sitch arise, if there is a true unforeseen difficult. They can ask for more money and you are bound to pay.
What does it mean to be "bargained for?"
Must be sufficient to induce the offeree to incur a legal detriment and vice versus.
What is rescission of a pre-exisitng duty contract?
Where you're unmaking a contract b/c you both don't want to be bound to the promise But only works if executory!
If you don't have give-take in consideration, it is considered?
a gift
inadequate consdieration may also indicate?
a gift
Ginger spends money on high heels. I promise ot pay you for them at the end of the month. We made the promise but ginger already had them in her possession when she said that. Is that a contract or a gift?
a gift b/c she already has the shoes so she really doesn't have to pay that girl back.
What is forbearance?
a promise or refreiaing from doing something taht you are legally to do and getting soemthing in exchange to not do it
for accord and satisfaction agreements, what do you need to be filed in court to look back to what it is?
a written contract
If contruction contractor creates a contract with you to finsih a project, but then comes to collect more money to finish it, you?
are not obliaged to pay thte new price b/c you have a previous contract
I want to cup of coffee enough that I am willing to give up my $5. Is an exampling of?
bargained for
Just b/c you see the word consideration, it doesn't mean that there is legal consideration. You need to have?
both elements
what induces you to enter into a contract is called?
consideration
Because we assign different value to good and service, what do we need to be pushed into a contract?
enough incentive
under a convenant not to sue settlement claim, you ahve to?
fulfill an amount of money that goes on for all resulting damages from accident to give up the negligence claim. and if you fail to pay, you breach the CNS (can sue)
What is a gift tax?
if you give the amount of money, you have to pay dollars
What are past consideration contracts?
lack bargain for exchange
What are illusory promises contracts?
no promises at all b/c you have no idea that the person is going to follow through
what kind of settlemnt of claim do insurance compnaies like?
release b/c certainty and the quickness
What is consideration?
the value given in return for a promise
What is legal value?
value sparate from the distinct econmic value (if any) of the thing promised
by releasing a person from a claim, you will have to?
you pay for the fix amount of money to be relaesed form the lawsuit or for them to forego filing the suit.
What is the Hamer v. Sidway case?
§ William sotry Senior & William Story II. § If for the next 6 year until 21, if you refrain from drinking, smoking and gambling, he'll give him 5,000 (75,000). § He earns it and goes § He put the money in the bank account § Ask Mr. Sidway (executor) to pay him. □ Refuses to pay □ Not enough consideration b/c he didn't do anything □ Uncle didn't get anything, newphew benfited. § II owed money ot Mr. Hammer § Fight between Mr. Sidway and Mr. Hammer □ Nephew gave up a legal right on the bases of his uncle. Court said forbearance is consideration.
When will the court get involved with the legal sufficiency of a contract?
• Consideration must be something of legally sufficient value in the eyes of the law. 2. fairness of the bargain (not common) 3. if consideration is shockingly inadequate, they will strike down te contract as unconscionable
What is accord and satisfaction?
• Debtor offers to pay a lesser amount than the creditor claims to be owed. • Need to be a dispute of the amount that is owed.
What is a release from a claim?
• Forfeiting the right to pursue a legal claim against the other party in exchange for consideration.
What is a fair contract?
• This has to do with subjective valuation. Law is objective facts.
Why are pre-existing duty contracts lack consideration?
○ Already in a contract with somebody and another person comes and as says in need more or this and that. ○ You are not obliged to pay the new price b/c they are obligated under the prvious contract.
