Chapter 12 Outline

Chapter 12 Outline - Chapter 12: Consideration 1)...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 12: Consideration 1) Consideration: defined as the value given in return for a promise or in return for a performance. a) Is broken down into two parts: i) Something of legally sufficient value must be given in exchange for the promise, and ii) Must be a bargained-for exchange 2) Elements of Consideration a) Legal Value i) Something of legally sufficient value may consist of: (1) A promise to do something that one has no prior legal duty to do so, (2) The performance of an action that one is otherwise not obligated to undertake, or (3) The refraining from an action that one has a legal right to undertake (forbearance) ii) In bilateral contracts, consideration normally consists of a promise in return for a promise iii) In unilateral contracts, consideration consists of a promise in return for a performance b) Bargained-for Exchange i) Must provide the basis for the bargain struck between the contracting parties ii) The promise given by the promisor (offeror) must induce the promise (offeree) to offer a return promise, a performance, or forbearance, and the promisee’s promise, performance, or forbearance must induce the promisor to make the promise. (1) This element distinguishes contracts from gifts. 3) Adequacy of Consideration a) Involves how much consideration is given; concerns the fairness of the bargain. b) Courts Typically Will Not Consider Adequacy i) In general, a court will not question the adequacy of consideration based solely on the comparative value of the things exchanged. (1) Something need not be of direct economic or financial value to be considered legally sufficient consideration.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(2) Under the doctrine of freedom of contract, courts leave it up to the parties to decide what something is worth and the parties are normally free to make bad bargains. c) Evidence of Grossly Inadequate Consideration i) When there is a gross disparity in the amount or value of the consideration exchanged, the inadequate consideration may raise a red flag for a court to look more closely at the bargain (1) Shockingly inadequate consideration can indicate that fraud, duress, or undue
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

Chapter 12 Outline - Chapter 12: Consideration 1)...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online