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stonybrook-chapter12guide - Chapter 12 Consideration...

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Chapter 12: Consideration Elements of Consideration Consideration has two elements: o There must be a bargained-for exchange between the parties (if a party intends to make a gift, he or she is not bargaining) o What is bargained for must have legal value Legal Sufficiency of Consideration Something of legal value must be given in exchange for a promise. The “something” may be a promise to do something, performance of an act, or refraining from doing something that one could otherwise do. Adequacy of Consideration Adequacy of consideration refers to the fairness of a bargain. Normally, a court will not question adequacy unless it is grossly inadequate or absent, which indicates fraud, duress, incapacity, undue influence, or a lack of a bargained-for exchange. Agreements that Lack Consideration Situations in which promises or acts do not qualify as consideration include the following: o Preexisting Duty A promise to do what one already has a duty to do is not consideration. For example, if a builder contracts to build something, that duty cannot be consideration for a second contract to raise the price. Exception- Unforeseen Difficulties o When a party runs unto extraordinary difficulties that were unforeseen at the time the contract was formed, some courts will enforce an agreement to pay more. Unforeseen difficulties often arise under construction contracts and relate to soil conditions.
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