September 29, 2008
I. The Basic Concept
O + A + C = K
The C stands for these three things:
Consideration: Something for Something (quid pro quo)
The offer will always be a promise looking for an act or a promise that is
bargained for, looking for something in return.
C is 1) explicitly bargained for (get something for the promise) benefit to the
promisor or 2) explicitly bargained for detriment (value) to the promissee.
IS THERE CONSIDERATION?
Identify the promise to the enforced?
What act or promise is sought in return?
Was the act or promise bargained for?
Does the act or promise have value?
Just b and c.
Requirement of Exchange; Types of Exchange:
To constitute consideration, a performance or a return promise must be bargained for.
A performance or return promise is bargained for if it is sought by the promisor in exchange
for his promise and is given by the promise in exchange for that promise.
The performance may consist of:
An act other than a promise
A forbearance- do not do something which you had a legal right to do
The creation, modification, or destruction of a legal relation.
The performance or return promise may be given to the promisor or to some other person.
may be given by the promise or by some other person.
Hamer v. Sidway
Court of Appeals of NY, 1891
Law: Valuable consideration defined – “may consist either in some right, interest, profit, or benefit
accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered, or
undertaken by the other.”
Facts: William E. Story, Sr. (uncle) promised his nephew William E. Story, 2nd that he would pay
him $5000 if he refrained from drinking, using tobacco, swearing, and playing cards or billiards for
money until he became 21 years of age. The nephew agreed and fully performed. Acquired it through
assignment from William E. Story, 2nd and presented a claim of $5000 to ?. The claim was rejected
by the executor on the grounds that there was no binding contract due to the lack of consideration.
William, Jr. was only 8 years old at the time the promise was made.
P: By the uncle to give $5000 to the nephew
A or P: Forbearance, not smoking, drinking, swearing and playing cards or billiards
Bargained: Yes, promise that he would not do those things
Value: Yes, giving up a legal right has value