Chapter 7-contact formation- consideration and intention .docx

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Chapter 7: contact formation- consideration and intention The meaning of consideration-accepted offer is NOT enforceable unless it has consideration-an accepted offer must for a bargain- each party must pay a price for the promise-Consideration: the price for which the promise of the other is bought-Ex. some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by anotherRules for consideration1. Benefit can flow from a third party2. Exchange must be for some value, but it does not have to be equal value3. Consideration must be agreed uponGratuitous promises-a person can make a promise to another without bargaining for anything in return-a promise made without bargaining for anything or accepting anything in return is called a gratuitous promise-even if an offer is accepted by the offeree, the promise is not enforceable in law (there is no contract)->the law will do nothing to help the promise enforce the promise and he cannot seek compensation for the benefit he would have received -if the promise is performed, it is considered a gifAdequacy of consideration-consideration must have some value, it does not have to be equal or adequate->the courts will not ensure that the parties have come to a fair bargain-however, adequacy of consideration may point to fraud duress or undue influence

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