Chapter 12 Outline - Chapter 12 Consideration Consideration the value given in return for a promise or performance Something of legally sufficient value

Chapter 12 Outline - Chapter 12 Consideration Consideration...

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Chapter 12 Consideration Consideration: the value given in return for a promise or performance Something of legally sufficient value must be given in exchange for the promise o Legal value: promise to do something that one has (1) no prior legal duty to do or (2) is obligated to do (3) Forebearance- refraining from an action that one has a legal right to undertake There must be a bargained for exchange the item of value must be given or promised by the promisor in return for the promisee’s promise, performance, or promise of performance i.e. provides the basis for the bargain struck Case 12.1 Hamer vs. Sidway Background: William E. Story promised to pay his nephew $5,000 ($72,000 in today’s dollars) if he would refrain from drinking, tobacco, swearing, and playing cards or billiards for money until he turned 21. Note: In 1860 at the time of the case drinking and gambling was legal for people under the age of 21 Nephew fulfilled his part of the bargain and when turned 21 he asked for the money. Uncle replied with letter stating that that the money was in the bank, gaining interest, and that his nephew “shall have the money certain” Money remained with uncle=> uncle died 12 years later without paying Executor of uncle’s estate claimed there was no valid consideration for the promise and refused to pay to Hamer, the third party to whom the nephew had given transferred his rights in the note Court reviewed the case to determine whether the nephew had given valid consideration under the law Decision and Remedy Court ruled in favor of nephew and that he was entitled to the funds on the grounds that the nephew had provided legally sufficient consideration by giving up smoking, drinking, swearing, and playing cards “in general a waiver of any legal right at the request of another party is a sufficient consideration for a promise” Impact today
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