LEB 320F Book Notes/Outline Chapter 13

LEB 320F Book Notes/Outline Chapter 13 - CHAPTER 13...

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Unformatted text preview: CHAPTER 13 CONSIDERATION HISTORICAL NOTE THE BASIC CONCEPT OF CONSIDERATION SPECIAL SITUATIONS CONSIDERATION is the second element ordinarily required in a contract. If agreement lacks Consideration, neither party can enforce it. Even if it is in writing. Historical Note Present-day requirement of Consideration center in part on the notion that one party to an agreement should not be bound by it if the other party is not similarly bound. Promises to make/give gifts are generally unenforceable. Consideration prevents on contracting party from exploiting another. The Basic Concept of Consideration The first determination is whether the promise e suffered a legal detriment (1. Doing (or promising to do) something that it was not obligated to do). Or (2. Refraining from doing (or promising to refrain from doing) something that it had a right to do. The second element of consideration is that the detriment must induce the promise that was not performed. The third element of consideration is that the promise must induce the detriment. When all three elements of consideration are present the contract is enforceable. Sometimes, the second and third elements are combined and referred to as a requirement that there must have been a bargained-for exchange . Means that parties must have bargained, or agreed, that each was giving something up in return for what the other party was giving up. Comment If a promisee incurs a detriment by giving up a legal right, the promisee has given consideration even though he or she may have received an incidental benefit at the same time. Even though the promisor typically receives some benefit from what the promisee gave up in return for the promisors promise, it is not a requirement that the promisor have received any such benefit, and the courts normally do not make any inquiry into whether the promisor received a benefit. Performance of Preexisting Obligations o GENERAL RULE: a promisee does not incur a detriment by performing, or promising to perform, an act that he or she was under a preexisting duty to perform. o One can be under a preexisting obligation because of the general law of a state or the federal government, or because a prior contract has not yet been carried out. Obligations Imposed by Law Example of the Policeman. If a local store owner gets robbed and promise the policeman $75 for catching the culprit the policeman is not entitled to the money because he is already under an obligation through his job to catch that person. because he is already under an obligation through his job to catch that person....
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LEB 320F Book Notes/Outline Chapter 13 - CHAPTER 13...

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