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Batsakis v. Demotsis

Batsakis v. Demotsis - – in ascertaining the presence of...

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Contracts 9/10 Bargain Theory of Consideration Batsakis v. Demotsis, Texas Court of Civil Appeals, 1949 Facts : Demotsis wrote a letter to Batsakis saying she had received 500,000 drachmae and promised to repay $2,000 with 8% interest. Later, the defendant now claims that the 500,000 drachmae were only worth $25 and thus there is want and failure of consideration. Procedure : plaintiff sued defendant to recover $2,000 with 8% annual interest from April 2, 1942. Trial court (no jury) resulted in judgment for plaintiff of $1,163.83. Plaintiff has appealed. Issue : whether inadequate consideration voids a contract for want of consideration. Holding : There was no “want of consideration” nor was there “failure of consideration.” This court reformed and affirmed the judgment. It should’ve been $2,000 plus interest and not $750.00 plus interest. *Rule : mere inadequacy of consideration will not void a valid contract (classical standard) Class Notes : Adequacy of Consideration
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Unformatted text preview: – in ascertaining the presence of consideration, the courts will not weigh the consideration, or insist on a “fair” or “even” exchange. Roy Notes : Nominal consideration v. adequacy of consideration – inadequate consideration still has a bargained for exchange. Nominal consideration isn’t a quid pro quo. It didn’t induce the promise. Classical Theory – not concerned with “fairness” Restatement (Second) §79 – no requirement or “equivalence in the values exchanged.” (However, gross inadequacy of consideration may be relevant). If the requirement of consideration is met, there is no additional requirement of (a) a gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promise; or (b) equivalence in the values exchanged (Batsakis); or (c) “mutuality of obligation” Mutuality of Obligation – there is no such thing; it is not a requirement we still recognize...
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Batsakis v. Demotsis - – in ascertaining the presence of...

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