blaw07a - Elements of Law Part One Part III Contract Law...

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Unformatted text preview: Elements of Law - Part One Part III Contract Law Unit 7 The Requirement of Consideration © 2007 Captus Press Inc. Module 1 Consideration © 2007 Captus Press Inc. © 2007 Captus Press Inc. 1 Elements of Law - Part One CONSIDERATION Consideration is the price paid in return for a promise © 2007 Captus Press Inc. Adequacy of consideration Generally the court will not examine the adequacy of consideration so long as each party has promised something of value. The court is reluctant to interfere in the bargaining process, and will not remake bad bargains. However, where consideration is grossly inadequate and there is fraud, undue influence or duress, the court may intervene and decide that there is inadequate consideration to validate the contract. © 2007 Captus Press Inc. 2 Elements of Law - Part One Past consideration Past consideration is no consideration To be valid, consideration must be received when the contract is made or must be received in the future. Examples of present, future and past consideration I give you a book in exchange for $10.00 from you, paid when you get the book—this is present consideration. I give you a book in exchange for $10.00 from you to be paid one week from now ---this is future consideration I give you a book as a gift. You accept it. Later you realize it’s very valuable and offer to pay me for it. Later yet, you change your mind and refuse to pay ---this is past consideration. The act of giving the book occurred before the promise to pay for it was made. © 2007 Captus Press Inc. 3 Elements of Law - Part One Existing Legal Obligations A promise made in an existing legal obligation cannot be consideration for an agreement currently being entered into A creditor agreeing to accept less than he or she is owed on a debt as full payment is an exception to the rule that an existing legal obligation cannot be consideration for a new contractual obligation. Module 2 Gratuitous Promises © 2007 Captus Press Inc. © 2007 Captus Press Inc. 4 Elements of Law - Part One Gratuitous Promises Gratuitous promises are generally not enforceable because they lack consideration A gratuitous promise of a large sum to a charity for a specific purpose may be enforceable. A gratuitous promise made under seal is enforceable. A statement on which another party relied to his or her detriment may be enforceable, even without consideration. The party making the statement may be estopped from denying the truth of the statement and may be bound by it. Five conditions need to invoke promissory estoppel 1. 2. 3. 4. 5. There must be an existing legal relationship between the parties at the time the statement on which estoppel is founded was made There must be a clear promise or representation made by the party against whom estoppel is raised, demonstrating that the person who made the statement intended to be bound by it. There must have been reliance on the statement or representation by the party who raises estoppel. The party to whom the representation was made must have relied on it, and acted on it to his detriment. The promisee must have acted equitably. © 2007 Captus Press Inc. 5 Elements of Law - Part One Module 3 Quantum Meruit Payments © 2007 Captus Press Inc. Quantum Meruit payments 1. 2. 3. Quantum meruit payments may be required where: There is an agreement to provide goods or services, but the price is unspecified The context of the contract or the customs of a trade indicate an expectation that a market price will be paid. © 2007 Captus Press Inc. 6 ...
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This note was uploaded on 01/16/2011 for the course ADMS 2610 taught by Professor Joshuasera during the Spring '10 term at York University.

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